Moule 1 - Strategic Overview 14% Flashcards
(185 cards)
1
Q
What are the Elements of Compensation?
A
Fixed Pay & Variable Pay
2
Q
nondiscretionary compensation that does not regularly vary according to
performance or results achieved.
A
Fixed Pay
3
Q
compensation that is contingent on discretion, performance or results achieved. It
may be referred to as “pay at risk.” Much of the innovation in compensation occurs in the variable
pay element.
A
Variable Pay
4
Q
statement of what the
organization believes about how people should be paid. It should support the business strategy and
be a good fit with the organization’s culture. A key component is how the organization intends to pay
relative to its competitors for people – i.e., the desired market position.
A
compensation philosophy
5
Q
the principles that guide the design,
implementation and administration of a compensation program in an organization. It may also
specify what programs will be used and how they will be administered.
A
Compensation strategy
6
Q
Compensation Program Objectives
A
• Internally equitable • Externally competitive • Affordable • Understandable • Legal / defensible • Efficient to administer • Capable of being reshaped for the future • Appropriate for the organization • Attract, motivate, engage and retain employees • Create alignment of employee efforts and business objectives
7
Q
provides key information about the nature and level of work performed
A
Job analysis (ADEWH - TEST)
Job Analysis
Job Documentation
Job Evaluation
Job Worth Hierarchy
8
Q
includes written information about job content or the functions of the job
and required knowledge, skills and abilities (KSAs)
A
Job documentation (ADEWH - TEST)
9
Q
creates a job worth hierarchy using a market data or job content approach
A
job evaluation (ADEWH - TEST)
10
Q
illustrates where each job fits, relative to other jobs
A
job worth hierarchy (ADEWH - TEST)
11
Q
After the job worth hierarchy is built, a base pay structure can be created
and utilized as a framework for pay decisions
A
base pay structure
12
Q
A generalized job or job family common to multiple industries / organizations.
A
Occupation
13
Q
A group of jobs having the same nature of work (e.g., engineering) but requiring different levels
of skill, effort, responsibility or working conditions (e.g., entry-level vs. senior engineer).
A
job family
14
Q
The total collection of tasks, duties and responsibilities assigned to one or more individuals
whose work is of the same nature and is performed at the same level.
A
job
15
Q
A standard job used for making pay comparisons to develop or validate a job
worth hierarchy. Pay data for these jobs are readily available in published surveys.
A
Benchmark Job (TEST)
16
Q
The total work assignment of an individual employee, comprised of a specific set of duties /
responsibilities. The total number of ___ in an organization equals the number of employees
plus vacancies.
A
Positions
17
Q
Employees + Vacancies (TEST)
A
Positions
18
Q
A duty or group of duties which describes the (major purpose or reasons for the existence of a job)
A
Job responsibility
19
Q
A group of tasks that constitutes one of the distinct and major activities involved in the work
performed.
A
Job Duty
20
Q
One or more elements constituting a distinct activity that forms a logical and necessary step in
the performance of work by an employee.
A
Task (Check vital signs (blood pressure, pulse, temperature)
21
Q
The smallest step into which it is practical to subdivide any work activity without analyzing
separate motions, movements or mental processes.
A
Task elements (TEST) (Place blood pressure cuff on patient, Record blood pressure reading)
22
Q
Job Specifications - KSABs
A
Knowledge + skills + abilities + behaviors
23
Q
Defines mental aspects of job, What employee must know (through education, training or experience), Example: Accounting principle
A
knowledge
24
Q
Defines manual and/or applied mental aspects of job, What employee must be
able to do (typically experience or training), Example: Maintain general ledger
A
skill
25
```
Natural talents
or developed
proficiencies, Defines aptitudes
normally present
at birth in job
incumbent,
but may in
some cases be
acquired, Example:
Balance multiple
priorities
```
abilities
26
```
Behaviors
required for
performing
the job, Defines how
the employee
should act
in support of
organizational
goals, Example:
Positive
interaction with
members of
organization
```
Behaviors
27
Define and explain the steps that must be completed before building a base pay structure. (ADEWH)
Job analysis
Job documentation
job evaluation
job worth hirearchy
28
When is the base pay structure created?
After the job worth hierarchy is built
29
The phrases “lifts cover, lays paper on glass, closes cover and presses start button” are examples
of which of the following?
Task elements
30
An operations team has five data entry clerks, one proofreader and one supervisor. How many
jobs are in the unit?
3
31
What job specification describes what the employee should be able to do based on his or her
experience or training?
skills
32
```
Develop job worth hierarchy
• Document work methods
• Provide basis for performance appraisal
• Identify job families
• Identify qualifications
• Provide basis for legal and regulatory compliance
• Determine if a job should exist
• Identify design elements
```
Job Analysis
33
Incumbents – have the most detailed information about their own duties and responsibilities
■ Analysts – can provide a more objective and consistent approach to analyzing job content
■ Supervisors – can provide important validation of incumbent input
■ Local or centralized staff – depends on company policy
■ Employee representatives – useful but not mandatory
Who should be involved in job analysis (TEST)
34
■ Determine the level of participation according to management philosophy and/or current
contractual agreements
■ Describe the project to any third-party representatives prior to the general announcement
to employees
■ Emphasize the role of job analysis in providing third-party representatives and management with
data on which to base pay decisions
■ Discuss the various approaches to job analysis
■ Discuss where joint participation would be appropriate.
Working with Unions / Employee Representatives (TEST)
35
___ needs to be collected about the jobs (based on the type of job evaluation plan used)
To establish relative internal job worth, it is necessary to identify, collect and analyze critical data
about the job. Critical data fall into two major categories:
■ Nature of work
• Duties
• Responsibilities
■ Level of work
• Skill
• Effort (mental, physical)
• Responsibility (i.e., accountability)
• Working conditions
Job Analysis Process (TEST)
• Plan
- Identify information (critical data)
36
```
Information obtained from sources other than incumbent or supervisor
INTERNAL
work flow studies
policies and procedures manuals
org charts
existing job docs
org goals and objectives
EXTERNAL
industry association materials
commercially available materials
salary surveys
government publications
```
secondary sources of job information
37
Direct observation – observing one or more cycles of work to learn where the work comes from,
what is done with it and where it goes after the operation is complete
■ Individual interviews – includes an in-depth discussion with job incumbent to provide
information about what he/she does, how and why
■ Group interviews – process of interviewing several incumbents at the same time
■ Technical consultation – process of interviewing technical experts to obtain information
■ Questionnaires – Often replace interviews as a source of gathering data when there are many
jobs to be analyzed. Questionnaires attempt to capture the same information as a one-on-one
interview. (TEST)
• Open-ended – Questions are structured to allow job incumbents increased latitude
in responding.
• Highly structured – Questions limit responses and focus mainly on the frequency of tasks or
responsibilities.
Primary sources of job information
38
Description
• Observing workers in order to understand job duties, responsibilities, tasks and
task elements
■ Application
• Most appropriate for manual and repetitious work that occurs in short cycles
■ Procedure
• Gather information from the appropriate secondary sources
• Identify desired work activities to observe
• Explain the process to the employee before observing
• Be as unobtrusive as possible and observe through the entire work cycle
• Conduct a follow-up interview with the incumbent to understand work observed
• Verify results with the supervisor
■ Advantages
• For short-cycle work, observations can be done fairly easily to identify tasks and
confirm behaviors
■ Disadvantages
• Can be a time-consuming and costly process in terms of resources used (i.e., manual labor to
observe job duties)
• May not be sufficient enough information to write a job description
• May intimidate employees by creating a “big brother” atmosphere
• Not as useful in higher level jobs
Direct Observation
39
Application
• When an individual interview with all incumbents is impractical
• When a sample of incumbent responses is desirable
• When the information indicates the jobs are basically the same in terms of the nature and
level of work (or only minor differences)
Group Interview
40
Description
• A structured review of job content between a job analyst and several experts
■ Application
• For a newly created technical position, best understood by people other than incumbents
• For jobs in a new or emerging field
• Typically used when the job has no incumbents
Technical Consultation
41
Description – A written set of questions regarding job content that requires a narrative response
■ Application
• For most job families, except production and maintenance jobs. Best for those jobs that are
professional, managerial and executive level.
• When the organization lacks the internal resources for individual interviews
• When the time frame is too short for individual interviews
• A useful supplementary tool to be used in conjunction with individual interviews
• To gather information to determine legal compliance
Open-Ended Questionnaires
42
• May require a follow-up if the questions are not clearly defined / answered
• Variations in incumbent writing skills can be misleading and can produce
inconsistent results.
• Assessment of questionnaire output can be time-consuming and tedious.
• A poor command of the language could limit the ability to communicate effectively.
Disadvantages of Open Ended Questions
43
■ Description
• A written set of questions regarding job content that limits responses to a predetermined set
of answers (e.g., behavioral and task)
■ Application
• All job families, although typically not used for lower-level, production-type jobs
• When highly detailed data on job tasks, skills or behaviors are desired for multiple human
resources purposes
• When organizations have sufficient computer capabilities, personnel and financial resources
■ Procedure
• Develop the questionnaire
• The questionnaires are completed by the incumbents, approved by supervisors and returned
to human resources.
• Responses from multiple incumbents of the same job are reconciled to a common set
of answers.
• The responses are entered into the computer and scored.
Advantages
• Flexibility; can be tailored to the job group being analyzed
• Consistency; everyone answers the same questions
• Can cover a large number of jobs
• Database of responses can have multiple uses
■ Disadvantages (TEST)
• Time-consuming and expensive to develop
• Often lengthy and time-consuming to complete
• Questions usually need to be validated first
• If too long, individuals may complete without care
Highly Structured Questionnaire
44
the most common method for collecting job
analysis information.
• The questionnaires are generally completed by the incumbent without the job
analyst present.
• The principal advantages are speed, minimal cost of collecting data and the incumbents’
detailed knowledge of duties.
Open-ended questionnaires
45
Used most frequently in conjunction with job evaluation programs which use
statistical methods
• Ask very specific questions and have a predetermined set of responses
• Often requires the job analyst to complete the document using an interview format with
the employee (TEST)
Highly structured questionnaires
46
(TEST)
Sampling errors – example: selecting the first ten job incumbents from a list arrayed by hire date,
so that the sample represents incumbents with the shortest tenure
■ Incumbent bias – an individual in the job may not accurately represent all facets of the work
Inadequate communication – example: failure to explain what the information will be used for
■ Misinterpretation of questions – example: failure to explain the level of responsibility associated
with “budget accountability”
■ Bias in recording or coding information – example: job analyst, incumbent or supervisor
■ Misuse of statistical procedures – example: construction of questionnaires. It is important
to account for the entire job group being evaluated before constructing the questionnaire. If
the questionnaire is constructed based on the input from too small a sample of the group, the
questionnaire will be non-representative of the group and the results could be skewed.
Possible Sources of Error in Job Analysis
47
Describe the purpose of job analysis and the people who may be involved
to define the most desirable KSAB required to perform a job. Incumbents and supervisors are involved
48
Explain the process of getting to the job worth hierarchy
Job analysis > Job documentation > job evaluation > Job worth hierarchy
49
Plan
• Identify what information (critical data) needs to be collected about the jobs (based on the
type of job evaluation plan used)
• Determine the sources of information to be used and who will conduct the data collection
• Develop a communication plan
■ Action
• Communicate what you are doing and why
• Collect critical data on the actual nature and level of work
• Verify the data and augment it through management review
• Revise and reconcile the data as required and inform the job incumbent of any revisions
Job Analysis Process
50
Identify and explain the various sources of job information.
Secondary Sources
Secondary sources of job information include the following:
Internal sources
■ Work flow studies may have been conducted in an attempt to analyze which jobs can be
automated. Incumbents may prepare diaries or logs.
■ Policies and procedures materials of the group can sometimes be an indication of the work
process, training and knowledge requirements of the various jobs in the group.
■ Organizational charts can provide some indication of the level of the job and reporting
relationships.
■ Existing job documentation is an effective way to obtain background information on the job.
■ Organizational goals or objectives discuss the responsibilities and the achievements which are
measured for performance purposes.
External sources
■ Industry association materials – Some associations have standard job descriptions to provide
benchmark information.
■ Commercially available materials – Many books are available for purchase that include sample
job descriptions.
■ Salary surveys have some generic job descriptions in the survey materials. These typically are
benchmark jobs.
■ Government publications are generally inexpensive and comprehensive in sampling a large
number of jobs.
Primary Sources
■ Direct observation – observing one or more cycles of work to learn where the work comes from,
what is done with it and where it goes after the operation is complete
■ Individual interviews – includes an in-depth discussion with job incumbent to provide
information about what he/she does, how and why
■ Group interviews – process of interviewing several incumbents at the same time
■ Technical consultation – process of interviewing technical experts to obtain information
■ Questionnaires – Often replace interviews as a source of gathering data when there are many
jobs to be analyzed. Questionnaires attempt to capture the same information as a one-on-one
interview.
• Open-ended – Questions are structured to allow job incumbents increased latitude
in responding.
• Highly structured – Questions limit responses and focus mainly on the frequency of tasks or
responsibilities.
51
Explain considerations related to job analysis communication
```
Audience
• Who has to be informed?
■ Media
• What media should be used?
■ Message
• What message will be communicated?
■ Timing
• When should various elements of communication take place?
```
Process
• Design a communication plan
– Who, what, where, when, why, how
– Identify responsible parties
■ Methods
• Group meetings
– Conduct group meetings with managers and supervisors
– Arrange and conduct information sessions
• Written communication
– Send a general announcement letter to employees from senior management
– Publish article(s) in employee newsletters
• Feedback
– Provide participant feedback at the appropriate intervals
– Send a letter of thanks from senior management to participants and committee members
52
■ Identify and describe possible sources of error in job analysis.
Sampling errors – example: selecting the first ten job incumbents from a list arrayed by hire date,
so that the sample represents incumbents with the shortest tenure
■ Incumbent bias – an individual in the job may not accurately represent all facets of the work
■ Incomplete information – where incumbent leaves blank or insufficient responses to questions
for a variety of reasons, particularly illiteracy (i.e. inability to understand what is written)
■ Illogical question order and sequence – where the incumbent is confused or misled by the order
of the information and therefore provides inaccurate data
Inadequate communication – example: failure to explain what the information will be used for
■ Misinterpretation of questions – example: failure to explain the level of responsibility associated
with “budget accountability”
■ Bias in recording or coding information – example: job analyst, incumbent or supervisor
■ Misuse of statistical procedures – example: construction of questionnaires. It is important
to account for the entire job group being evaluated before constructing the questionnaire. If
the questionnaire is constructed based on the input from too small a sample of the group, the
questionnaire will be non-representative of the group and the results could be skewed.
53
What best describes one of the purposes of job analysis?
To document work processes for training purposes
54
Prior to conducting a job analysis interview, where might one obtain secondary job information?
Organizational charts
55
Which job analysis technique is best suited to assembly line workers?
Direct observation
56
Which of the following would be the best source of job information for a job in a new or
emerging field?
Technical consultation
57
How could sampling error affect the potential outcomes of a job analysis?
The results may not be representative of the entire group.
58
Types of Job Documentation
■ Job analysis questionnaires
• In many cases, questionnaires completed by incumbents and/or supervisors, may contain
more specific and extensive data about a particular job than a formal job description.
■ Job family matrices (TEST)
• Information on multiple levels within the same job family.
■ Job descriptions
• A formal documentation of duties and responsibilities as well as job specifications.
59
Job Descriptions
(TEST)
Important features included on a job description:
■ The general nature of the work
• Duties
• Responsibilities
■ The level of the work performed
• SERWC (skill, effort, responsibility, working conditions)
■ The specifications for the job
• Employee characteristics required for competent performance of the job.
60
```
Developing a job worth hierarchy
■ Identification of performance standards
■ Organizational design uses
■ Salary survey exchanges
■ Legal defenses
■ Job assignments
■ Selection / recruitment
■ Establishment of career paths and succession planning
```
Role of Job Descriptions in Pay Programs
61
If a job is occupied by more than one person (if there are two or more positions), there may be some
differences between the way in which incumbents perform the work. In this case, incorporate
principal elements of the job into a single description. (TEST) Ignore those minor differences in the way work
is performed which may be inappropriate for all job incumbents.
Job Description format
62
Reflect nature / level of work
• Are “politically correct”
• Avoid unnecessary inflation
• Avoid discrimination
• Consider internal and external status issues
• Consider HRIS Capabilities – and/or Limitations
job titles
63
Use titles which describe the general nature and level of work performed.
• Titles such as “Clerk,” “Instructor,” “Analyst” and “Mechanic” indicate the general nature of
the work (that is, the principal duties and responsibilities of the incumbents).
• Other components of the job title such as “Senior,” “Specialist” and “Lead” indicate the level
of the work.
job titles
64
(TEST) ______ to ensure that the nature and level of work is easily understood.
• Titles which overstate the importance of the job can contribute to difficulty in matching jobs
to surveys and create pressure to change titles among other job families.
Refrain from inflating titles
65
A job description typically indicates whether the job is exempt from, or not exempt from overtime
requirements.
Criteria for exemption – When classifying jobs into a job group category in the U.S., it is
important to consider the primary duties of the job, as well as other criteria specified by the Fair
Labor Standards Act (FLSA) and the Department of Labor (DOL).*
66
(TEST)
Indicate the job title of the supervisor to whom this job reports.
■ Indicate the title(s) of any employees directly supervised by this job.
■ Address dotted-line reporting relationships and informal “lead” duties in the duties and
responsibilities section.
Reporting relationships
67
The general nature and level can sometimes be indicated by starting
the summary with a phrase like “under the direction of...” Because this is a summary, it is usually
easier to write after completing other sections of the description.
general summary
(TEST)
The general summary states the general nature, level and purpose of the job.
68
Principal Duties and Responsibilities
(TEST)
Include current duties and/or responsibilities which account for more than 5% of the
incumbent’s time or are critical to the successful performance of the job.
69
(TEST)
| Identify essential functions in the job to meet legal requirements could include:
The reason the job exists
• A limited number of employees available to perform the function
• Functions are highly specialized and require expertise.
Example: When reviewing return to work situations after someone has been on short-term
disability
70
Level Cutters
When describing jobs having a similar nature but a dissimilar level of work, indicate the different
levels through the use of appropriate modifying words or phrases. Sometimes a table referred to as a
“level cutter” is prepared to assist in the writing of job descriptions. A level cutter usually indicates a
change in compensable factors from the lowest job level to the highest.
71
(TEST)
This section of the job description identifies the minimum job specifications required to
perform the job.
■ Identify the knowledge, skills and abilities (KSAs), and behaviors necessary to perform the job
competently.
Job Specifications
72
An employer may not refuse to hire an individual
because of his or her religion, sex or national origin unless that limitation is reasonably necessary
to the normal operation of the employer’s business. Race can never be a BFOQ.
Bona fide occupational qualifications (BFOQs)
73
Working Conditions
■ Describe the physical environment in which the work is performed:
• Hazardous or dangerous environment (i.e., working with chemicals)
• Adverse conditions (i.e. temperature extremes)
• Unpleasant environment (i.e. strong or unpleasant odors)
■ Describe working conditions in the following terms:
• Level / intensity
• Frequency
• Duration
(TEST)
Most professional and executive job descriptions do not include this section
because work is assumed to be performed under normal office conditions.
74
TEST
Some additional nonessential functions may be covered by disclaimer statements.
Examples:
• “May perform other duties as assigned.”
• “The above statements are intended to describe the general nature and level of work being
performed by people assigned to this job. They are not intended to be an exhaustive list of all
responsibilities, duties and skills required.”
Disclaimer Statement
75
(TEST)
| Who should write job descriptions?
Job analyst from human resources
• Incumbent in job / team members
• Supervisor of job
76
Identify the principal types of job documentation.
JAQs, Job family matrices, job descriptions
77
Identify and describe common uses for job descriptions in pay programs.
```
Developing a job worth hierarchy
■ Identification of performance standards
■ Organizational design uses
■ Salary survey exchanges
■ Legal defenses
■ Job assignments
■ Selection / recruitment
■ Establishment of career paths and succession planning
```
78
Describe the types of information that should be included in job descriptions and the importance
of each component.
Important features included on a job description:
■ The general nature of the work
• Duties
• Responsibilities
■ The level of the work performed
• SERWC (skill, effort, responsibility, working conditions)
■ The specifications for the job
• Employee characteristics required for competent performance of the job.
79
Identify appropriate job description formats for different job levels and guidelines for preparing
effective job descriptions.
If a job is occupied by more than one person (if there are two or more positions), there may be some
differences between the way in which incumbents perform the work. In this case, incorporate
principal elements of the job into a single description. (TEST) Ignore those minor differences in the way work
is performed which may be inappropriate for all job incumbents.
80
What are the principal types of job documentation?
Job analysis questionnaires, job family matrices and job descriptions B
81
Which of the following is the most appropriate use for a job description?
To evaluate job content C
82
What would typically be included under “nature of work” on a job description?
Duties and responsibilities C
83
Which of the following best characterizes job descriptions?
A summary of the most important features of a job A
84
How should duties and responsibilities be described on a standard job description?
With generic terms rather than proprietary names D
85
What best describes a useful guideline for the development of job descriptions?
They should be kept up to date. C
86
There are two basic
approaches to job evaluation: Market data and job content. The major difference between the two is
emphasis. Regardless of which approach is taken, data collection and analysis is an important part of
the process.
Building a Base Pay Structure
87
Job descriptions are used to match survey data.
• Market data are analyzed and benchmark jobs are arranged into a hierarchy.
• Jobs with no market data are slotted using job content to determine relative worth.
• Problem areas are analyzed and discrepancies reconciled to develop the job worth hierarchy.
Market data emphasis
88
The method of pricing base pay is essentially the same for both executive and
non-executive jobs. (TEST)
Evaluating executive & non-executive jobs
89
When pricing executive jobs, however, determining competitive base pay is only the first
step. The focus then shifts to pricing other elements of the executive compensation package,
which could include short-term and long-term incentives, perks and executive benefits. In
many cases, looking at STI and LTI extends below the executive level. Especially in the U.S.,
candidates are looking at the competitiveness of the overall compensation package when
making a decision whether to join an organization.
Evaluating executives
90
For both executive and non-executive jobs, the most frequently used method of job
evaluation is the market data approach, based on market pricing of base pay.
most frequently used method of job
| evaluation
91
* Price jobs
* Analyze pay trends
* Identify pay practices
* Establish job worth hierarchy
Reasons to collect market data
92
Purchase published surveys
• There are thousands of published surveys available for purchase.
• Purchase price varies by survey scope, type of analysis and overall sophistication of the
final product.
• Most survey providers give a substantial discount to survey participants.
■ Sponsor custom third-party survey
• A third party conducts the survey to meet your needs and specifications.
• The third party can be a professional association, graduate students from a local university
or a consultant.
• In many cases, participants in a survey sponsored by an individual company pay nothing to
receive a copy of the survey results.
■ Complimentary sources
• Trade and industry associations
• Internet sources
• Periodicals and publications
• Professional recruiters
Data collections options
93
TEST (C-TRAD)
The data should be
reliable, include reliable statistical analysis and be focused on the appropriate market.
■ Cost – Does the survey provide enough benefit to justify the expense?
■ Time – How much time will it take to gather survey data? How quickly must survey data be
obtained and analyzed?
■ Reliability – Is the survey sponsor reputable? Has data been verified for accuracy?
■ Availability – Is current data available in time to meet the organization’s needs?
■ Data format – Is data formatted to provide specific information? Are data reported by industry,
by geographic area, number of employees?
o Survey data source decision reason/factors
94
used for making pay comparisons to develop or validate a job worth
hierarchy.
TEST
internal jobs that can serve as market anchor points because they closely
resemble jobs performed in other organizations or industries (at least 70% match of duties).
Easily defined and found in other organizations important to your organization. It is
important to look at the job description and match to survey jobs based on the content of the
job, not the title. Survey data firms can provide mapping guides to help level jobs between
one survey and another.
Benchmark Jobs
95
At least 50% of jobs in the organization should be benchmarked when using the _____market-based
job evaluation method.
market-based
| job evaluation method.
96
The relevant labor market can be described as the
market(s) from which the organization draws its employees and/or the market(s) to which it loses
employees. Labor markets are generally defined in terms of:
• Industry
• Organization size
• Geographic location
Employee sources and destinations
97
Markets typically differ by job groups
Relevant Labor Markets
98
Differentiate between job evaluation with a market data emphasis and job evaluation with a job
content emphasis.
Market data emphasis
• Job descriptions are used to match survey data.
• Market data are analyzed and benchmark jobs are arranged into a hierarchy.
• Jobs with no market data are slotted using job content to determine relative worth.
• Problem areas are analyzed and discrepancies reconciled to develop the job worth hierarchy.
Job content emphasis relies more one the content of a job rather than the market data, but still uses market data in organizing a hierarchy and defining the KSABs required of a job
99
Identify data collection options and describe considerations related to each option.
Purchase published surveys
• There are thousands of published surveys available for purchase.
• Purchase price varies by survey scope, type of analysis and overall sophistication of the
final product.
• Most survey providers give a substantial discount to survey participants.
■ Sponsor custom third-party survey
• A third party conducts the survey to meet your needs and specifications.
• The third party can be a professional association, graduate students from a local university
or a consultant.
• In many cases, participants in a survey sponsored by an individual company pay nothing to
receive a copy of the survey results.
■ Complimentary sources
• Trade and industry associations
• Internet sources
• Periodicals and publications
• Professional recruiters
100
Which of the following statements is most accurate regarding the market-based job
evaluation method? TEST
C. Jobs may be slotted using job content if there is insufficient market data
101
Which of the following best describes the relevant labor markets in which organizations compete
for employees? TEST
They differ by job groups / levels A
102
What method is used most frequently to evaluate executive level positions? TEST
Market pricing
103
2 methods of non-quantitative (whole-job) job evaluation
Ranking and classification (Job content emphasis of job evaluation)
104
There are four primary methods of job content evaluation
ranking, classification, job component
| and point factor
105
what are the 2 types of Ranking method?
Simple ranking and paired-comparison ranking
106
what are the 3 steps of simple ranking?
1. analyze / document job content
2. ID selected group of jobs (job set)
3. Rank order jobs within the set
- high to low
- low to high
- both ends to middle
107
For example, in a small company with only 20 jobs, all the jobs may be the job set, and could be
ranked all at once. However, if there were 60 jobs, it may be necessary to break the ranking into job
sets, such as management jobs, professional jobs and administrative jobs. Sets could be created
by functional areas or broken into sets by exempt or nonexempt. The job sets depend both on the
number of jobs to be ranked and on what seems to make logical sense for the company
job sets
108
Ranking a larger number of jobs
• Compare every job to every other job
• Job hierarchy developed by number
of times selected
Paired-Comparison Approach
109
____ is more effective than simple ranking when evaluating a larger
number of jobs.
• When a larger number of jobs are involved and it’s conceptually too difficult to conduct a
simple ranking,
Compare every job to every other job.
• Each job is individually compared to every other job.
• The job of most value from each pairing is noted.
Job hierarchy is developed based on the number of times a job is selected.
• It is likely and acceptable that some jobs may have the same ranking.
Paired-comparison ranking
110
What are the 4 steps of the paired comparison ranking approach?
1. Determine the number of pairs required
number of pairs=N(N-1)/2 .... (TEST)
N = number of jobs
2. compare each pair and select the stronger job
3. Determine the number of times each job was selected
4.Rank order the jobs
111
What are the adv and disadv of the ranking method?
Advantages
• Simple to administer
• Inexpensive
• Quickly implemented
• Little training required
■ Disadvantages
• Inconsistency; evaluators bring different judgment criteria to the table.
• No detail / documentation to justify evaluation internally or to third parties.
• May be superficial if important aspects of the job are not considered.
• Incumbent characteristics, performance or salary may unduly influence evaluation.
112
compares jobs on a whole-job basis.
■ Predefined class descriptions are established for a series of job grades. (TEST)
■ A job is placed in the classification which best describes it.
■ This method is frequently used in the public sector.
Classification Method
113
5 steps of the classification method
Step 1 Analyze and document job content.
Step 2 Identify and cluster benchmark jobs that appear to be similar in terms of their nature,
scope or level.
Step 3 Develop preliminary generic definitions for each cluster to form classification levels (grades).
Step 4 Compare benchmark job descriptions to preliminary classification definitions and modify
definitions if necessary.
Step 5 Assign all remaining jobs to classification levels (grades) that most closely match the nature
and level of work performed.
114
```
Advantages
• Simple to administer
• Inexpensive
• Quickly implemented
• Little training required
• Evaluation reference points defined
```
Disadvantages
• Jobs may be forced into classifications that may not fit.
• Descriptions can be inflated (or deflated) to fit a classification. (TEST)
Classification Method
115
Identify the two nonquantitative job evaluation methods
ranking
- simple ranking
- paired-comparison N(N-1)/2=Number of pairs, N=#of jobs
Classification
116
Define ranking and describe the two types of ranking, the steps involved and its advantages and
disadvantages.
ranking
- simple ranking
- paired-comparison N(N-1)/2=Number of pairs, N=#of jobs
Advantages
• Simple to administer
• Inexpensive
• Quickly implemented
• Little training required
■ Disadvantages
• Inconsistency; evaluators bring different judgment criteria to the table.
• No detail / documentation to justify evaluation internally or to third parties.
• May be superficial if important aspects of the job are not considered.
• Incumbent characteristics, performance or salary may unduly influence evaluation.
117
Define classification, describe the steps involved and its advantages and disadvantages.
compares jobs on a whole-job basis.
■ Predefined class descriptions are established for a series of job grades. (TEST)
■ A job is placed in the classification which best describes it.
■ This method is frequently used in the public sector.
Step 1 Analyze and document job content.
Step 2 Identify and cluster benchmark jobs that appear to be similar in terms of their nature,
scope or level.
Step 3 Develop preliminary generic definitions for each cluster to form classification levels (grades).
Step 4 Compare benchmark job descriptions to preliminary classification definitions and modify
definitions if necessary.
Step 5 Assign all remaining jobs to classification levels (grades) that most closely match the nature
and level of work performed.
```
Advantages
• Simple to administer
• Inexpensive
• Quickly implemented
• Little training required
• Evaluation reference points defined
```
Disadvantages
• Jobs may be forced into classifications that may not fit.
• Descriptions can be inflated (or deflated) to fit a classification. (TEST)
118
What are the two nonquantitative job evaluation methods?
Ranking and classification
119
Which of the following best describes the ranking method of job content evaluation?
It is a whole-job rather than a factor-based job evaluation method. C
120
When would the paired-comparison approach be preferred over the simple ranking approach?
When evaluating a larger number of jobs A
121
What is one of the steps in the classification method of job content evaluation?
Identifying and clustering benchmark jobs that appear to be similar C
122
What is one of the advantages of the classification method?
It is relatively simple and inexpensive. A
123
What are 2 quantitative (factor) methods of job evaluation
job component and point-factor
- use points or monetary units to determine a numerical score for each job
124
Selecting compensable factors is the first step when using the job component or point factor
methods of job evaluation.
A compensable factor may be described as:
• Any criterion used to provide a basis for judging job value in order to create a job
worth hierarchy
• The elements used to measure job worth
• Intrinsic elements in jobs that add value to the organization and for which it wants to pay
compensable factors
125
The generic compensable factors are . . . (TEST)
Skills
Effort
Responsibility
Working Conditions
126
Skill factors require a short description when used in a job evaluation plan.
Examples of skill factors:
```
- Experience
– Knowledge
– Manual dexterity
– Analytical ability
– Creativity / ingenuity
– Interpersonal
communications
– Job complexity
```
127
Effort factors
- Physical demands (i.e., lifting)
– Mental exertion (i.e., concentration)
- Eye strain
128
Responsibility factors
| Examples:
Impact on the organization
– Directing the work of others
– Independent action / decision making
129
Working conditions
Hazardous or dangerous environment (i.e., working with chemicals)
– Adverse conditions (i.e., temperature extremes)
– Unpleasant environment (i.e., strong or unpleasant odors)
130
individual component aspects of job content within generic factor groups. (i.e., the
components within the factor group “skill” include experience and knowledge, among others).
Factors
131
measurement scales or yardsticks which identify specific levels of a factor. (TEST)
Degrees
1st degree – less than three months
• 2nd degree – three months, up to and including 12 months
• 3rd degree – more than one year, up to and including three years
• 4th degree – more than three years, up to and including five years
• 5th degree – more than five years
132
Generic factor group: skill
■ Specific factor name: experience
■ Specific factor description
This factor measures the time normally required on related work and on-the-job training for the
job being evaluated for an individual to attain satisfactory performance standards under normal
supervision.
Example of terms
133
■ Identify the organization’s internal values (TEST)
• Formal documentation – mission statement, business strategy, HR philosophy
• Discussions with senior management
Selecting Compensable Factors (TEST)
134
```
Review the job content of the work group to be covered by the plan
• Common characteristics
• Diverse characteristics
• Industry-specific considerations
• Unique aspects
```
Selecting Compensable Factors
135
Identify five to 12 potential factors for consideration by management
• Committee process
• Individual interviews with key managers or employees
• Statistical analysis
• Combination of the above
Selecting Compensable Factors
136
Obtain key management’s support and stakeholder acceptance
Selecting Compensable Factors
137
Determine factors to be used
• Select effective factors – Factors should:
– Differentiate job value; avoid measuring the same or similar job characteristics more
than once
– Have a logical relationship to overall job value
– Be common to all jobs being evaluated
– Cover all major aspects of job requirements for which the organization is willing to pay
– Be manageable; limit factors used to a reasonable number
Failure to do the above increases administrative time without adding meaningful
information and may create systematic bias for or against certain jobs.
• Include all important factors – Failure to do this may inadvertently discriminate for or
against certain jobs, or may produce a job worth hierarchy inconsistent with internal values.
Selecting Compensable Factors
138
■ Develop a clear and comprehensive definition for each factor
■ Define the highest and lowest levels of each factor present in the work group to be covered
by the plan
■ Create intermediate levels from lowest to highest by defining a logical progression that reflects
reasonable differences
Defining Compensable Factors
139
What to Consider When Defining Compensable Factors
Create a job worth hierarchy consistent with management’s perception of relative job worth
TEST
■ Establish proper number of levels
• Too many levels
– Forces artificial distinctions between degree levels
– Requires highly detailed job documentation
– Increases administrative time
– Encourages requests for re-evaluation which results in “grade creep”
• Too few levels
– Does not adequately differentiate important aspects of job value
– May not fully cover the range of work performed
• Overlapping levels
– Difficult to select the appropriate level
– Adjacent level descriptions are too similar
140
Weighting Compensable Factors
■ Consider the nature of the work performed by job group(s) covered under the plan (TEST)
■ Rank the factors selected in order of priority for the organization
■ Develop initial factor weights as a percentage, derived by statistical analysis, management
judgment, or a combination of the two
■ Review with key management and other stakeholders, as appropriate
141
Job Component Method
The job component method is a statistical job evaluation method that uses multiple factor regression
analysis
Statistically developed – As opposed to the simpler ranking methods described earlier, the job
component method uses statistical analysis to determine job value.
(TEST)
■ Identifies factors / factor weights that explain market levels – The job component method is
used to identify the specific factors and factor weights that help to explain the market pay levels
of benchmark jobs.
■ May be used to evaluate nonbenchmark jobs – Once a statistical model has been developed
under the job component method, nonbenchmark jobs can then be evaluated using the model.
142
Steps of the Job Component Method
-Step One Select and define compensable factors and job content to be measured
-Step Two Develop a structured questionnaire to collect data on independent factors, such as
work experience, level of education, budget, duties and responsibilities. The factors
chosen must be able to be expressed in a quantitative, numerical format, so that they
can be used in a regression analysis calculation.
-Step Three Administer and evaluate questionnaires
-Step Four Collect market data for benchmark jobs
-Step Five Input the data from questionnaires and/or organizational records on selected
benchmark jobs along with market data into computer.
-Step Six Conduct a multiple factor regression analysis on the data to determine which factors
should be included in the initial compensation model. (This step typically is done in a
spreadsheet.)
-Step Seven Test the model using the formula created from selected benchmark jobs, input
additional benchmark data to verify results; adjust the model if necessary to produce
the desired job worth hierarchy.
-Step Eight Run all jobs for which there is no pay data through the final model to produce the
complete job worth hierarchy.
143
standard multiple regression formula
The standard multiple regression formula is:
Base pay = constant + coefficient(experience) + coefficient(education) + coefficient(budget)
144
Disadvantage of the job component method
- Time consuming front-end question dev
- Complex therefor difficult to communicate (Test)
- expensive
145
point factor method
The point factor method of job evaluation uses defined factors and degrees to establish job value. (TEST)
■ Job descriptions are compared to the definitions of degrees in order to determine the most
appropriate level.
■ The corresponding points for that level are then awarded to the job and combined for all factors
to derive a total score.
146
Steps of point-factor method
Step 1 Select compensable factors to be used to evaluate the jobs
Step 2 Define factors and degree levels within each factor – weight each factor as a percent of 100
Step 3 Assign points to each degree level
Step 4 Analyze and describe jobs in terms of the compensable factors
Step 5 Determine which degree level of each factor best fits the job and assign respective
point values
Step 6 Total points for each job and arrange a job worth hierarchy based on total points
147
compensable factors have weights and are reflected by points
point-factor method
148
```
Step 3
Assign points (point-factor)
```
A point factor plan can be set up in several ways.
■ Dimension (TEST)
• Single – used when the factor is dependent on only one variable (e.g., years of experience)
• Multiple – used when the factor is dependent on multiple variables (e.g., business judgment
is dependent on both decision making / impact and scope / complexity)
– To accurately judge this factor, each subfactor must be evaluated as it relates to the
main factor
Progression
• Arithmetic – Typically used in a single-dimension approach. Assigns a point score factor to
each level of the dimension.
• Geometric – Typically used in a multiple-dimension approach. Assigns a percent increase
to each level of dimension. As a percentage, the points assigned to each dimension
progressively increase. For example, page 150 shows an increase of 9 points between level
1 and 2, and an increase of 24 points between level 7 and 8. The result allocates more points
for increasing knowledge.
149
Step 4
| Analyze and describe jobs in terms of compensable factors
Select an appropriate job analysis technique that will describe jobs in terms of their
compensable factors.
150
Step 5
| Degree definition and value
Compare job documentation to degree definitions
■ Determine which degree definition of each factor best fits the job and assign respective
point values
151
Step 6
| Job worth hierarchy
```
Total the points for each job and arrange a job worth hierarchy based on total points
For example
Job A 950 points
Job B 600 points
Job C 500 points
Job D 350 points
```
152
Point Factor Method
Advantages (TEST)
■ Relatively reliable
■ Relatively objective
■ Easy to evaluate new or revised jobs (TEST)
■ Compensable factors can be tailored to company
■ The degree of difference between jobs is apparent
■ Responsive to pay equity laws and comparable worth parameters
Disadvantages
■ Expensive to develop or purchase
■ Time-consuming to design and implement
■ Cumbersome if many jobs are to be evaluated
■ Creates inflexible hierarchy
■ Ability to evaluate and score the job to achieve a specific level
153
For market pricing it is important to document the sources and process used to price the jobs
Documenting the Job Evaluation Process
154
For market pricing it is important to document the sources and process used to price the jobs.
■ Specific surveys and why they were used
■ Measure of central tendency used
■ Practice of selecting the most representative survey number to serve as the going market rate
(may vary from job to job, depending on whether averages are skewed)
■ Method of aging the data from multiple surveys to common point in time
■ Method for developing market composite for each job
Documenting the Job Evaluation Process
155
For internal job evaluation methods it is important to document the process used to evaluate the jobs
■ Methodology used
■ Names of evaluators
■ Date of evaluations
■ Any thought process used to evaluate the positions
Documenting the Job Evaluation Process
156
Identify the two quantitative job evaluation methods.
Point-factor and job component
157
Define the terminology associated with compensable factors and describe the process involved in
selecting, defining and weighting them.
```
S-kills
-analytical ability
-YOE
E-ffort
-Mental strain
-eye strain
-lifting/pushing
R-esponsibility
-supervising
-decision making
W-orking Conditions
-cold/hot
-dark
-wet
-comfortable
```
158
■ Name the generic compensable factor groups and identify commonly used evaluation
factors for each.
```
S-kills
-analytical ability
-YOE
E-ffort
-Mental strain
-eye strain
-lifting/pushing
R-esponsibility
-supervising
-decision making
W-orking Conditions
-cold/hot
-dark
-wet
-comfortable
```
159
What are the two quantitative job evaluation methods?
Job component and point factor B
160
What should one do when selecting compensable factors?
Identify the organization’s internal values A
161
Which of the following is considered one of the generic compensable factor groups? (TEST)
Working conditions D (SERWC) (TEST)
162
Which method of job evaluation uses multiple factor regression analysis that may be used to predict
salary or grade levels for nonbenchmark jobs?
C. Job component (TEST)
163
What is one of the steps in the point factor job evaluation method?
B. Define the degree levels within each compensable factor
164
What is one of the advantages of the point factor job evaluation method?
C. It is responsive to pay equity laws. (TEST)
165
e job evaluation plans presented in this course can be successfully implemented under
the right circumstances.
Plan selection requires careful consideration of organization issues, such
as business environment, culture, organization structure, management support and compensation
resources in addition to characteristics of potential plans.
166
A successful implementation strategy enhances the credibility of the plan and promotes acceptance
by managers and employees.
selection and implementation of a job evaluation plan
167
Selecting a Job Evaluation Strategy
■ Business environment – the key HR and business factors that contribute to the success of the
organization, including
• Labor supply
• Union influence
• Ability to offer competitive pay
■ Organizational culture – the structure, processes, style and history of an organization, including
• Decision-making mode (centralized or decentralized)
• Demand for quick re-evaluation due to changes in job content
• Management style
• Level of overall support for the HR function and compensation specifically
• Degree of openness in compensation communication
• Relative emphasis on either internal equity or external competitiveness
■ Organizational design – the way work is structured
• Job-based or team-based, or a combination
• Flat (broadbanded) or hierarchical management structure
• Relatively stable or rapidly changing
■ Top management approval and support – senior management decisions and direction
• Budget for staffing and training in job analysis, job documentation and job evaluation
• Use of outside instead of inside consultants
• Level of commitment to final results
• Communication style
■ Compensation function – the structure, size and competency
• Centralized versus decentralized
• Size of compensation staff
• Technical competence in job analysis, job documentation and evaluation
• Availability of labor market data
168
market pricing is easy to communicate (TEST)
Market Data Emphasis - Job evaluation method
169
ranking method
requires little training and low cost
170
Job Evaluation Plan Characteristics
Emphasis / focus – Does the plan focus more on internal equity or external competitiveness?
■ Communication – How easy is it to communicate how the plan works?
■ Technical complexity – What is the degree of technical complexity inherent in the plan?
- Time required – How long does it take to develop and implement? (TEST)
--FAST, ranking, market pricing/classification, point-factor, job-component, SLOW
■ Cost – What is the development and implementation cost relative to other plans?
--CHEAP, ranking, market pricing/classification, point-factor, job-component, EXPENSIVE
171
Implementation Issues
Committee vs. non-committee approach
• A job evaluation committee may be used to assist the human resources department in
evaluating some or all jobs to be covered by the plan.
172
Implementation Issues
Cost of development
• Limited budgets may preclude complicated systems
• Cost of lost productivity may be prohibitive
• Cost of gathering data for the evaluation
173
Implementation Issues
Communicating job evaluation results
• Implementing a new job evaluation plan requires decisions on how the results will be
communicated throughout the organization. Plan administrators must be able to address the
following issues:
• Level of detail regarding individual evaluation
• Appeals process when employee challenges evaluation result
• Procedures established to evaluate new and revised jobs in the future
174
Implementation Issues
■ Centralized or decentralized
• Determine whether there is a greater need for standardized results or divisional flexibility
• Complicated or highly complex systems are difficult to decentralize.
• For organizations with multiple locations, will implementation be handled by the corporate
office or be delegated to each division location?
175
Implementation Issues
Effect on jobs and individuals
• Consider how resulting changes in the pay hierarchy will affect the pay rate for specific jobs
• Consider how individual pay will be adjusted based on changes to job hierarchy and base
pay structure
176
Job Evaluation Committee Members TEST
TEST
Successful job evaluation committees typically include members who:
■ Represent major functional areas throughout the organization
■ Are well respected and perceived as knowledgeable about the jobs to be evaluated
■ Represent comparable levels of power and influence
■ Understand the importance of the job evaluation process and are committed to making it work
■ Will be open-minded and respect the opinions of others on the committee
■ Will work to support the integrity and credibility of the system, as opposed to potential
“horse trading.”
177
Job Evaluation Committee
Advantages
■ They can clarify job content information found in job documentation.
■ They can improve the accuracy of job evaluation ratings.
■ They can substantially enhance the credibility of job evaluation results.
Disadvantages
Careful selection and training of job evaluation committee member can minimize the
potential problems.
■ It may be difficult to gain the commitment of time necessary to complete evaluations within a
reasonable time frame.
■ Turf issues and territorial bias can be difficult and time-consuming to resolve. (TEST)
■ Judgments may be more incumbent biased.
178
Implementation Tips for success
Confirm final evaluation results with senior managers
■ Utilize communication tools such as manager information kits and FAQs (frequently asked
questions)
■ Anticipate concerns by identifying jobs and incumbents most impacted by the new program
before announcing the results
■ Create a feedback loop in the process to uncover issues as quickly as possible
179
Introducing a New Job Evaluation Plan (TEST)
■ Fit with organization, culture and strategy
■ Selection of appropriate benchmark positions
■ Education and communication about job evaluation to employees and management
• How the new plan supports company strategy
• How the plan works and how it supports the business objectives of line management
• How the plan helps the company determine pay and manage pay programs fairly and
consistently
■ Involvement of management and employees in design and implementation (TEST)
■ Appropriate selection and weighting of compensable factors – what you value and for which you
want to pay
180
Identify and describe some of the factors that should be considered when selecting a job
evaluation strategy
■ Business environment – the key HR and business factors that contribute to the success of the
organization, including
• Labor supply
• Union influence
• Ability to offer competitive pay
■ Organizational culture – the structure, processes, style and history of an organization, including
• Decision-making mode (centralized or decentralized)
• Demand for quick re-evaluation due to changes in job content
• Management style
• Level of overall support for the HR function and compensation specifically
• Degree of openness in compensation communication
• Relative emphasis on either internal equity or external competitiveness
■ Organizational design – the way work is structured
• Job-based or team-based, or a combination
• Flat (broadbanded) or hierarchical management structure
• Relatively stable or rapidly changing
■ Top management approval and support – senior management decisions and direction
• Budget for staffing and training in job analysis, job documentation and job evaluation
• Use of outside instead of inside consultants
• Level of commitment to final results
• Communication style
■ Compensation function – the structure, size and competency
• Centralized versus decentralized
• Size of compensation staff
• Technical competence in job analysis, job documentation and evaluation
• Availability of labor market data
181
Identify the characteristics that may be used to assess the suitability of different job evaluation
methods and differentiate between methods based on these characteristics.
Emphasis / focus – Does the plan focus more on internal equity or external competitiveness?
■ Communication – How easy is it to communicate how the plan works?
■ Technical complexity – What is the degree of technical complexity inherent in the plan?
- Time required – How long does it take to develop and implement? (TEST)
--FAST, ranking, market pricing/classification, point-factor, job-component, SLOW
■ Cost – What is the development and implementation cost relative to other plans?
--CHEAP, ranking, market pricing/classification, point-factor, job-component, EXPENSIVE
182
Explain implementation issues related to job evaluation.
■ Committee vs. non-committee approach
• A job evaluation committee may be used to assist the human resources department in
evaluating some or all jobs to be covered by the plan.
■ Cost of development
• Limited budgets may preclude complicated systems
• Cost of lost productivity may be prohibitive
• Cost of gathering data for the evaluation
■ Communicating job evaluation results
• Implementing a new job evaluation plan requires decisions on how the results will be
communicated throughout the organization. Plan administrators must be able to address the
following issues:
• Level of detail regarding individual evaluation
• Appeals process when employee challenges evaluation result
• Procedures established to evaluate new and revised jobs in the future
■ Centralized or decentralized
• Determine whether there is a greater need for standardized results or divisional flexibility
• Complicated or highly complex systems are difficult to decentralize.
• For organizations with multiple locations, will implementation be handled by the corporate
office or be delegated to each division location?
■ Effect on jobs and individuals
• Consider how resulting changes in the pay hierarchy will affect the pay rate for specific jobs
• Consider how individual pay will be adjusted based on changes to job hierarchy and base
pay structure
183
What best describes an important factor that should be considered when selecting a job
evaluation strategy?
The relative emphasis on either internal equity or external competitiveness C
184
Which of the following job evaluation methods is generally easier to communicate to employees?
Market pricing D
185
What is one of the advantages of using a job evaluation committee to evaluate jobs?
Committee members can clarify job content information found in job documentation. B
