 Job evaluation is the process of systematically determining the relative worth of jobs to create a job structure for the organization  The evaluation is based on a combination of:  Job content  Skills required  Value to the organization

 Organizational culture  External market

 Content and value  A structure based on content orders jobs on the basis of the skills, duties, and responsibilities associated with the jobs  A structure based on job value orders jobs on the basis of the relative contribution of the skills, duties, and responsibilities of each job to the organization’s goals

 Linking content with the external market  Aspects of job content take on value based on their relationship to market wages  Aspect not related to the external labor market may be excluded in the job evaluation

 “Measure for measure” versus “Much ado about nothing”  Job evaluation may be judged according to technical standards  If participants agree that skills, effort, responsibilities, and working conditions are important, then work is evaluated based on these factors

 To be sure that all relevant aspects of work are included in the evaluation, an organization may start with a sample of benchmark jobs  Contents are well-known and relatively stable over time  Job is not unique to one employer  A reasonable proportion of the work force is employed in this job

 Orders job descriptions from highest to lowest based on a global definition of relative value or contribution to the organization’s success  Alternation ranking orders job descriptions alternately at each extreme  Paired comparison method uses a matrix to compare all possible pairs of jobs

 Disadvantages:  Ranking criteria are usually poorly defined  Evaluators must be knowledgeable about every job under study

 A series of classes covers the range of jobs  A job description is compared to the class descriptions to decide which class is the best fit

 Greater specificity of the class definition improves the reliability of evaluation  Limits the variety of jobs that can easily be classified  Jobs within each class are considered to be equal work and will be paid equally

 Common characteristics:  Compensable factors  Factor degrees numerically scaled  Weights reflect relative importance of each factor

 Conduct job analysis  Determine compensable factors  Scale the factors  Weight the factors according to importance  Communicate the plan, train users; prepare manual  Apply to nonbenchmark jobs

 A representative sample of jobs (benchmark jobs) is drawn for analysis  Content of these jobs is basis for:  Defining compensable factors  Scaling compensable factors  Weighting compensable factors

 Compensable factors are those characteristics in the work that the organization values, that help it pursue its strategy and achieve its objectives

 Based on strategy and values of organization  Reinforce the organization’s culture, values, business direction, and nature of work  May be eliminated if they no longer support the business strategy

 Based on the work itself  Documentation must support the choice of factors  Acceptable to the stakeholders

 Adapting factors from existing plans  Skills and effort required, responsibility, and working conditions  National Electrical Manufacturers Association (NEMA), National Metal Trades Association (NMTA), Equal Pay Act (1963), and Steel plan  The Hay Guide Chart-Profile Method

 How many factors?  “Illusion of validity” - Belief that factors capture divergent aspects of a job and both are important  “Small numbers” - If even one job has a certain characteristic, it is used in the entire work domain

 Scales reflecting different degrees within each factor are constructed  Most scales consist of four to eight degrees  Also include undefined degrees such as plus and minus around a scale number  Major issue: Interval scaling

 Criteria for scaling factors:  Ensure number of degrees is necessary to distinguish among jobs  Use understandable terminology  Anchor degree definitions with benchmark-job titles and/or work behaviors  Make it apparent how degree applies to job

 Different weights reflect differences in importance attached to each factor by the employer  Determination of factor weights  Advisory committee allocates 100 percent of the value among factors

 Select criterion pay structure  Committee members recommend the criterion pay structure  Statistical modeling techniques are used to determine the weight for each factor  Statistical approach is termed policy capturing to differentiate it from the committee a priori judgment approach  Weights also influence pay structure

 A manual is developed  Describes job evaluation method  Defines compensable factors  Provides information to distinguish varying degrees of each factor  Users require training and background information on the plan  Appeals process may be included  Communication is required to build employee acceptance

 Final step involves applying plan to remaining jobs  Plan becomes a tool for managers and HR specialists  Trained evaluators will evaluate new jobs or reevaluate jobs whose work content has changed

 Online job evaluation is widely used in larger organizations  Becomes part of a Total Compensation Service Center for managers and HR generalists to use

 Managers and employees with a stake in the results  Committees, task forces, or teams that include representatives from key operating functions, including nonmanagerial employees  Including union representatives helps gain acceptance

 Compensation professionals are primarily responsible for most job evaluations for most jobs  Design process matters  Attending to the fairness of the design process and approach chosen is likely to achieve employee and management commitment, trust, and acceptance of results

 Compensation professionals are primarily responsible for most job evaluations for most jobs  Appeals/review procedures  Inevitable that some jobs are incorrectly evaluated  Requires review procedures for handling such cases and helping to ensure procedural fairness