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
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
Market pricing
- market data emphasis
- cannot be used in isolation in “pay equity” or “comparable worth” jurisdictions
- market determines organization pay philosophy
- easy to communicate
Ranking
- job content emphasis
- NONQUANTITATIVE or WHOLE JOB
- little training required
- evaluators may bring different judgment criteria to exercise
- no detail / documentation to justify evaluation
Classification
- job content emphasis
- NONQUANTITATIVE or WHOLE JOB
- little training required
- job descriptions can be inflated to fit a classification
- generally not practical for companies with numerous, diverse job families
Job Component
- job content emphasis
- QUANTITATIVE or FACTOR
- statistically accurate and relatively objective
- management oriented
- often perceived as “black box”
Point Factor
- job content emphasis
- QUANTITATIVE or FACTOR
- easy to evaluate new or revised jobs
- relatively objective
- compensable factors can be tailored to company
Slotting
- a technique used within some already established job evaluation method
- involves placing a job into a category or classification
Implementation Issues
Committee vs Non-committee approach
-a job evaluation committee may be used to assist the HR dept 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 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
Job Evaluation Committee Members
successful committee includes 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 committee 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”
Advantages and Disadvantages of Job Evaluation Committees
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:
- it may be difficult to gain the commitment of time necessary to complete evaluations withing a reasonable time frame
- turf issues and territorial bias can be difficult and time consuming to resolve
- judgments may be more incumbent biased
Tips for Success
- confirm final evaluation results with senior managers
- utilize communication tools such as manager information kits and FAQs
- 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
Introducing a New Job Evaluation Plan
- fit with organization, culture, 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
- appropriate selection and weighting of compensable factors - what you value and for which you want to pay
Q: Identify and describe some of the factors that should be considered when selecting a job evaluation strategy
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Q: Identify the characteristics that may be used to assess the suitability of different job evaluation methods and differentiate between methods based on these characteristics
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Q: Explain the implementation issues related to job evaluation
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Quiz: What best describers an important factor that should be considered when selecting a job evaluation strategy? A) the prevalence of the strategy among industry competitors. B) the availability of a qualified consultant to assist with design and implementation. C) the relative emphasis on either internal equity or external competitiveness. D) the research results on the reliability of different approaches
the relative emphasis on either internal equity or external competitiveness
Quiz: which of the following job evaluation methods is generally easier to communicate to employees? A) classification. B) job component. C) point factor. D) market pricing
market pricing
Quiz: what is one of the advantages of using a job evaluation committee to evaluate jobs? A) the job evaluation process can be completed more quickly and efficiently. B) committee members can clarify job content information found in job documentation. C) committee members can dedicate whatever time is needed to accomplish the evaluation prior to the deadline. D) the decisions made are less likely to be affected by turf issues and incumbent bias.
committee members can clarify job content information found in job documentation
