1. Prentice Hall, Inc. © 2006 7-1 A Human Resource Management Approach STRATEGIC COMPENSATION Prepared by David Oakes Chapter 7 Building Internally Consistent Compensation Systems

2. Prentice Hall, Inc. © 2006 7-2 Internal Consistency  Compares value of a job against others  Represents job structure or hierarchy  Job descriptions are its cornerstone  Recognizes differences in job characteristics

3. Prentice Hall, Inc. © 2006 7-3 Job Structure Processes  Job analysis  A descriptive procedure  Identifies & defines job content  Job evaluation  Reflects value judgments  Compensation systems set pay levels

4. Prentice Hall, Inc. © 2006 7-4 Worker Requirements  Skills  Education  Experience  Licenses  Permits  Special abilities

5. Prentice Hall, Inc. © 2006 7-5 Job Analysis Process  Determine job analysis program  Select & train analysts  Direct job analyst orientation  Conduct the study  Summarize results: write job descriptions

6. Prentice Hall, Inc. © 2006 7-6 Job Analysis Data Gathering Methods  Questionnaires  Interviews  Observation  Participation

7. Prentice Hall, Inc. © 2006 7-7 JOB ANALYSIS UNITS  Elements  Tasks  Position  Job  Job family  Occupation

8. Prentice Hall, Inc. © 2006 7-8 S O C  Standard Occupational Classification System  Office of Management and Budget  Replaces DOT  Lists  23 Occupational Groups,  98 Minor Groups  452 Broad occupations  822 Detailed occupations

9. Prentice Hall, Inc. © 2006 7-9Sources  Job incumbents  Supervisors  Job analysts

10. Prentice Hall, Inc. © 2006 7-10 Writing Job Descriptions Should Include  Job title  Job summary  Job duties  Worker specifications

11. Prentice Hall, Inc. © 2006 7-11 Legal Considerations  Equal Pay Act  Must justify pay differences  FLSA  Determine exemption status  ADA  Determine essential job functions

12. Prentice Hall, Inc. © 2006 7-12 ADA Guidelines Essential Job Functions  Position has an essential function  Requires high skills or expertise  Decided case - by - case  Non - essential jobs are marginal

13. Prentice Hall, Inc. © 2006 7-13 O*NET Categories  Experience requirements  Occupational requirements  Occupation specific requirements  Worker requirements  Worker characteristics  Labor market characteristics

14. Prentice Hall, Inc. © 2006 7-14 Experience Requirements  Experience & training  Related work experience  On - site training  On - the - job training  Apprenticeships  Licensing  Licenses & certificates  Formal education

15. Prentice Hall, Inc. © 2006 7-15 Occupation Requirements  Occupational skills  Occupational knowledge  Tasks  Duties  Machines  Tools  Equipment

16. Prentice Hall, Inc. © 2006 7-16 Worker Requirements  Basic skills  Cross - functional skills  Knowledge  Education

17. Prentice Hall, Inc. © 2006 7-17 O*NET Sources  Libraries, public & academic  U.S. Government Printing Office  http://www.doleta.gov  American Psychological Assoc “An Occupational Information System for the 21 st Century: The Development of O*NET”

18. Prentice Hall, Inc. © 2006 7-18 Universal Compensable Factors  Skill  Effort  Responsibility  Working conditions

19. Prentice Hall, Inc. © 2006 7-19 Job Evaluation Process Steps  Select technique  Choose committee  Train members to evaluate  Document plan  Communicate with employees  Set-up appeals process

20. Prentice Hall, Inc. © 2006 7-20 Point Method Steps  Select benchmark jobs  Choose compensable factors  Define factor degrees  Determine weight of factors  Determine point value  Verify factor degrees & point values  Evaluate all jobs

21. Prentice Hall, Inc. © 2006 7-21 Job Evaluation Qualitative Approaches  Simple ranking plan  Paired comparisons  Alternation ranking  Classification plans

22. Prentice Hall, Inc. © 2006 7-22 Alternatives To Job Evaluations  Market pay rates  Pay incentives  Individual rates  Collective bargaining