JOB EVALUATION & SALARY STRUCTURE DESIGN Seminar Speaker & Facilitator: RAFAEL Z. PERFECTO, F.P.M.

EFFECTIVE SALARY ADMINISTRATION Internal Job Value - Job Evaluation External Job Value - Salary Survey/Design Pay for Performance - Performance Appraisal

OBJECTIVES OF JOB EVALUATION To Measure the value of jobs within the company To attract and retain highly-motivated and well- qualified employees

PERFORMANCE APPRAISAL JOB EVALUATION A systematic process of measuring the relative value of jobs within the organization for the purpose of administering compensation in a rational way. PERFORMANCE APPRAISAL An objective process of measuring the performance (quantity & quality of output) of an employee for the purpose of motivation, performance improvement, and reward.

JOB ANALYSIS Methods of Job Analysis (Interview, Questionnaire, Observation) Sources of Job Information (Primary, Secondary) Job Data Analysis (What, How, Where, How often)

JOB DESCRIPTIONS What is a job description? Uses of Job Descriptions Steps in developing job descriptions

Steps in Developing Job Descriptions Conduct job analysis Identify position title and reporting relationships based on Organization Chart Define job objectives List down duties and responsibilities List down minimum and preferred qualifications of the job Submit job description for approval

Job Description Format Position Title: Department/Section/Unit: Reports to: Supervises: Job Summary: Duties & Responsibilities: Job Specifications: (qualification requirements)

WORDS TO AVOID Performs Ensures Assists Coordinates Prepares Liaises Monitors Entertains

WORDS TO AVOID Implements Facilitates Maintains

ENSURING FAIRNESS & OBJECTIVITY IN THE RATING PROCESS Select Job Factors that are important to your company Identify credible members for your Job Evaluation Committee Consider using the Point Rating System A third party or consultant can improve the credibility of the program

ENSURING FAIRNESS & OBJECTIVITY IN THE RATING PROCESS Select Job Factors that are important to your company Appoint a Job Evaluation Committee Use a third party or consultant Use the Point Rating System

JOB FACTORS Relevant work experience Education Accountability Human Relations Skill Analysis & Decision Making Working conditions (Hazards & Physical demands) Supervision

JOB RATING PLAN The measuring device used to rate jobs. It defines the individual job factors and their corresponding degrees. Note: Each factor is assigned percentage weights depending on which factors management wishes to give greater weight or importance.

JOB EVALUATION COMMITTEE A group of five (5) to nine (9) managers of the company, representing the different departments/divisions, who will be responsible for rating the different jobs. FUNCTIONS: Establishing and recommending the job rating plan Job clarification Discussion & deliberation Objective rating

WAGE DISTORTION “A situation where an increase in the prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation”

SALARY MARKET DATA Rationale for conducting salary surveys Selecting companies to be surveyed: Geography Industry Size Combination Competition (for good people)

Sources of Salary Data Own Survey Joint Survey (groups or associations) “Off-the-shelf” or third party surveys Customized third party surveys

SALARY STRUCTURE DESIGN Conduct or participate in a salary survey. Depending on company philosophy or direction, the structure is based on the survey average, median, or higher survey results. Each job grade is assigned a Salary Range A salary structure is composed of several salary ranges. Each salary range has a minimum rate, a mid-point rate, and a maximum rate.

Analyzing Market Data Analyze your company data versus survey average or median Indicate variances in percentage Draw a Salary Survey Chart showing: Survey Low Survey High Survey Median Survey Average Your Company Actual Average

Basic Rules in Designing a Salary Structure Compute the Hiring Rate of Job Grade One. (Should not be lower than prevailing minimum wage law) Decide on the Salary Range Spread of 50% or 60%. (Multiply Hiring Rate x 1.5 for 50% or 1.6 for 60% to get Max Rate) Compute Mid-Point Rate for JG-1 by adding Hiring Rate & Maximum Rate divided by 2.

Basic Rules in Designing a Salary Structure Closely observe the variances between your actual average and survey average per job grade, from the lowest to the highest job grade. % Interval between job grades should be the same or higher (never lower). Decide appropriate % interval to bring your proposed Mid-Point Rate close to the market average.

TYPES OF SALARY INCREASES Merit Increase (based on performance) Promotion Increase Skill or Competency Increase Salary Adjustment: JE implementation, JE reclassification General Increase or “across-the-board”

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