Chapter 7 Evaluating Jobs - The Job Evaluation Process PDF

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Chapter 7

EVALUATING JOBS: THE JOB EVALUATION PROCESS

Chapter 7 – Part 1: Intro to JE & Job Analysis Chapter 7 – Part 2: Job Evaluation Methods and Process Chapter Learning Objectives • Explain the purpose of job evaluation and the main steps in the job evaluation process. • Understand job analysis and the key steps in that process. • Prepare useful job descriptions. • Identify and briefly describe the main methods of job evaluation. • Describe the key issues in managing the job evaluation process. • Understand the key reasons for pay equity and the general process for conforming to pay equity legislation. Effective Job Evaluation How do you compare apples and oranges? Determining Pay Determining what each employee should be paid is a function of 3 key factors: 1. The relative importance of the employee’s job to the organization. 2. The value placed on that job by the labour market. 3. Performance of the employee doing that job. Job Evaluation – Key Objectives • Ensure that all jobs in the organization are compensated equitably and are perceived by organizational members as being compensated equitably. • Ensure that jobs are not underpaid and not overpaid. Job Evaluation – Output • The output of job evaluation is a hierarchy of jobs, where all jobs of a similar value to the organization, however different they may be from one another in other respects, are located at the same level on the jobs hierarchy. • The jobs hierarchy provides the foundation for the development of pay grades and pay ranges. Job Analysis • Job analysis: The process of collecting information on which job descriptions are based • Job description: A summary of the duties, responsibilities, and reporting relationships pertaining to a particular job • Job specifications: The employee qualifications deemed necessary to successfully perform the duties for a given job • Nature of Required Information • What information is needed? • If job descriptions are accurate and up to date, they may provide all the necessary information • This is relatively rare, even though many organizations expend considerable effort on developing job descriptions Nature of Required Information “More time, money, and patience are wasted on job or class descriptions than on any other aspect of personnel administration. Yet in almost twenty five years of consulting, my firm has never had a client lay claim to an up-to-date and complete set of job descriptions. Moreover, job descriptions never contain all the information required to evaluate jobs for compensation.” Methods of Job Analysis • Observation • Interviews • Questionnaires • Functional job analysis

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Observation: Watching the employee as the job is performed Interviews: – Can be conducted with a sample of employees, or their supervisors, or both – Interviewing only one or the other of these groups has drawbacks

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Questionnaires: – May vary on two dimensions – Open-ended or closed-ended – Firm-specific or proprietary – Can be open-ended or closed-ended • Open-ended: A series of questions, such as the purpose and main duties of the job • Closed-ended: Select from a list the phrases that best describe the job

Functional Job Analysis (FJA) • Who performs what • To whom or what • With what tools, equipment, or processes • To achieve what purpose or outcome

Identifying Job Families • Administrative purposes • Identify jobs that are related to one another and cluster them in “job families” – For example, a chemical plant job families for non-managerial staff: • Clerical (clerks, receptionists, secretaries) • Trades (plumbers, electricians, welders) • Technical (lab technicians, instrumentation technicians) • Many organizations will find that all of their jobs can actually be slotted into eight job families or less: – Executives – Managers – Professionals – Technical Staff – Sales Staff – Production / Operations Workers – Trades – Support Staff Pitfalls in Job Analysis • Risk of analyzing the jobholder instead of the job – For example, the jobholder being interviewed may go above and beyond the call of duty, doing much more than the job calls for – Conversely, some jobholders may perform only a portion of the intended job duties • The analysis of the job should not be unduly influenced by either case • Can be subject to gender bias • Technical jargon is an impediment to effective understanding of jobs • Avoid over simplifying job duties • Issues with jobs that are dynamic, particularly in high-involvement organizations Job Evaluation Methods • Ranking/ Paired • Classification/ • Grading • Factor Comparison • Statistical/ Policy • Point

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Ranking: Relative values of different jobs are determined by knowledgeable individuals Paired Comparison:Every job is compared with every other job, providing a basis for a ranking of jobs Factor comparison method: Assigns pay levels to jobs based on the extent to which they embody various job factors Classification/ Grading: Generic grade descriptions for various classes of jobs to assign pay grades to specific jobs Point method: Establishes job values by the application of points to each job, based on compensable factors

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Ranking – Asking a group of “judges” (e.g., managers, human resource specialists) to examine a set of job descriptions and to rank jobs according to their overall worth to the organization Paired comparison – Each job is compared with every other job, one pair at a time – The number of times each job is ranked above another job is recorded, and these pair rankings are used as the basis for ranking the entire set of jobs Classification/grading – Establishes and defines general classes of jobs (e.g., managerial, professional, technical, clerical) and then creates series of grade descriptions for each class – Different grades possess different levels of knowledge and skills, complexity of duties, supervision, and other key characteristics – Organizations compare jobs using these grade descriptions within the appropriate job class and then select the pay grade that best matches them Factor comparison – Complex – Used less often than other methods – Identifies several major factors against which all jobs in a job class can be assessed and then rates the extent to which each factor is present in each of a large set of “key jobs” thought to be properly compensated at the present time Statistical/Policy capturing – Most complicated method – Uses questionnaires to gather information about the task elements of each job, the typical time spent on each task, and the relative importance of each task – Information is also collected regarding the level of skill or education required for each job, and possibly data on the quantity and quality of output expected for each job Point method (sometimes known as the “point-factor method”) – Most widely used – Identifies key job characteristics (known as “compensable factors”) that differentiate the value of various jobs, weights these factors, and then determines how much of each factor is present in a given job by assigning a certain number of points to each job for that factor

Conducting and Managing the Job Evaluation Process • Who conducts the job evaluations? • Communicating the job evaluation process • Applying job evaluation results • Developing appeal/review mechanisms • Updating job evaluations

Updating Job Evaluations • The job itself changes significantly • The strategy of the organization changes • Signs that the job evaluation system is no longer working effectively • Legislative conditions require it

Conforming to Pay Equity Requirements • Ontario Pay Equity Commission 1. Determine what rules apply 2. Identify female and male job classes 3. Establish a body to conduct pay equity 4. Select a gender-neutral job comparison system 5. Collect job information 6. Compare jobs 7. Check for permissible differences 8. Adjust compensation 9. Communicate the results 10. Maintain pay equity

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Compare Jobs – Job-to-job method • Comparing a female job class to a male class that is comparable in terms of job evaluation criteria – Proportional value method • Where no comparator male job class exists • Extrapolating a hypothetical male comparator job class based on other male job classes – Proxy comparison method • Establishes pay equity in public sector organizations where neither the job-to-job method nor the proportional value method can be used

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Check for permissible differences – Pay differences between female and male job classes that are not considered inequitable because they stem from certain specified allowable circumstances, such as seniority

Discussion Questions 1. Discuss the purpose of job evaluation and the main steps in conducting job evaluation. 2. Discuss the advantages and disadvantages of job analysis. 3. Discuss the key issues in managing the job evaluation process. 4. Discuss the issue of red-circled employees and they way they should be handled. Assume that your current or most recent employer has developed a new pay structure and that 20% of current employees are above their new maximum pay ranges. How would you deal with this problem? 5. Discuss the general process for conforming to pay equity legislation. Does legislating pay equity seem like a good idea to you?...