Job Evaluation Kenneth M. York School of Business Administration Oakland University

ORG434: Advanced HRM 2 Job Evaluation The process of determining how much a job should be paid, balancing two goals –Internal Equity: Paying different jobs differently, based on what the job entails –External Competitiveness: Paying satisfactory performers what the market is paying

ORG434: Advanced HRM 3 Job Evaluation: The Point Method Job Analysis to determine… –The tasks performed in a job The Job Description –The knowledge, skills, and abilities needed to perform the job The Job Specification

ORG434: Advanced HRM 4 Job Evaluation: The Point Method Example: Software Engineer –Job Description The Software Engineer designs, develops, tests and maintains one or more of our products or internal applications. The software engineer works as a member of an engineering team developing, designing, and maintaining one or more of our products or internal applications. This position reports to the appropriate Project Manager. –Job Specification Bachelor's or undergraduate degree in Computer Science, Information Systems, Electrical Engineering or equivalent experience. Masters or graduate degree is desirable. Understand Intranet and Internet technologies: http, firewall.

ORG434: Advanced HRM 5 Job Evaluation: The Point Method Develop a list of compensable factors… –A set of standards the organization uses to distinguish among jobs for pay purposes –Examples of commonly used compensable factors: –Degree of responsibility, supervision –Knowledge needed to perform the job –Discretion in performing the job, independent judgment –Job conditions –Effort –Hazard –Consequence of error

ORG434: Advanced HRM 6 Job Evaluation: The Point Method Define the degrees of each factor –Judgment and Decision Making: This factor identifies the extent to which the job requires judgment and responsibility in the making of decisions.The importance of the decisions and the extent to which standard policies and procedures provide guidance in decision making will be considered. 1st Degree: Work requires decision making involving the analysis of the facts of a situation and the determination of what actions should be taken within the limits of standard procedures; only unusual or seldom recurring situations require referral. Judgment could affect the work of others or cause minor inconvenience. Typical errors are generally confined to a single team or phase of operations. University of Wisconsin-Oshkosh

ORG434: Advanced HRM 7 Job Evaluation: The Point Method 3rd Degree: In consultation with team members decide specific work projects to perform, and proceed to plan, coordinate, and commit resources required to accomplish work; associates develop or establish procedures or policies. Judgment requires accuracy because errors could potentially result in inaccurate reports, incomplete or misleading information, unsound recommendations, or incorrect decisions. Consequences could adversely affect operations or services causing significant losses of time, resources and potentially have a long term impact on a team. 6th Degree: Assists board in the development of policies, general procedures and corporate goals. Errors in judgment could jeopardize the viability of the company.

ORG434: Advanced HRM 8 Job Evaluation: The Point Method Create a matrix of points for the degrees of each factor… –Judgment and Decision Making: –1 st degree = 50 points –2 nd degree = 100 points –3 rd degree = 225 points –4 th degree = 350 points –5 th degree = 500 points –6 th degree = 700 points –Communication, Work Environment, Coaching, Innovation, Knowledge – Education - Experience

ORG434: Advanced HRM 9 Job Evaluation: The Point Method Factors - Degrees1 st 2 nd 3 rd 4 th 5 th 6 th Job Knowledge Judgment & Decision Making Independent judgment Accountability Working conditions Mental

ORG434: Advanced HRM 10 Job Evaluation: The Point Method Evaluate benchmark jobs to determine Job Evaluation Point Totals… –Benefits supervisor = 700 –Training material development specialist = 650 –Job evaluation specialist = 460 – Compensation manager = 920

ORG434: Advanced HRM 11 Job Evaluation: The Point Method Collect salary survey data on benchmark jobs… –Benefits supervisor = $60,393 –Training material development specialist = $58,403 –Job evaluation specialist = $43,155 –Compensation manager = $79,958

ORG434: Advanced HRM 12 Job Evaluation: The Point Method Do a regression analysis to find the pay line for the benchmark jobs… –Dependent variable is salary survey data –Independent variable is job evaluation point total –Calculate salaries for benchmark and other jobs using the regression equation… Salary = 79.67*JETotal Example: Compensation Director = 79.67* = $95,333