1. Chapt. 8 – Job Evaluation Primary Goal of Job Evaluation:
To develop the relative worth of all jobs to ensure fair and equitable pay treatment for all employees

2. The Systematic Process for Job Evaluation
Identifying a hierarchy of jobs by worth, using job evaluation methodology
Investigating the marketplace to find out what other organizations are paying for comparable jobs
Combining job-worth data and market data in a manner that results in an organizational pay structure

3. Why Do We Need a Job Evaluation Program?
To establish an orderly, rational, systematic structure of jobs based on their net worth to company
To justify an existing pay rate structure or to develop one that provides for internal equity
To help set pay rates comparable to other organizations – external equity

4. To provide a rational basis for negotiation of pay rates when bargaining with a union
To identify career ladders and direction for employees interested in “moving up”
To comply with equal pay legislation
To develop a basis for merit or pay-for-performance programs

5. Common Methods of Job Evaluation
1. Intraoccupational and interoccupational method of job classification
Steps:
Identify major occupations/families of occupations in the organization
Place each class of jobs within its respective occupation
Rank all classes within the occupation, producing a vertical array of classes with highest-ranked class at top of array

6. Select classes within each vertical array to become known as “benchmark” jobs
Array benchmark or key classes in different occupations
Place benchmark or key classes from different occupations that can be considered “comparable” on same horizontal level

7. 2. Whole Job Ranking
Using a ranking method that allows comparison of one job to every other job
Deck-of-cards procedure
Paired-comparison ranking table
Alternate ranking procedure

8. Problems with Ranking
1. No real substantiation of how or why one job is ranked higher/lower than another one --- difficult for employees to accept
2. No real way to tell relative value of jobs to each other
3. Does not easily recognize changes in job content
4. Easy for rater to actually be rating individual in jobs, instead of the job itself

9. 3. Position (Job) Classification Method
Identify benchmark jobs at highest and lowest levels of pay, then fill in other jobs between these two points
Broadbanding --- tries to reduce the need to so narrowly define the job so that a number of progressively higher-paying jobs can be placed into a broader pay grade band

10. 3. Market Pricing Approach
Using information from labor markets to determine appropriate pay rates for jobs
Generally, information is collected by contacting other employers and asking for pay rates for matching jobs

11. Problems with Market Pricing
1. Difficult to define identical jobs in other organizations
2. Total reward and compensation packages may be very different, thus misleading
3. Pay survey data prone to many errors
4. If labor market is broad, difficult to get representative sample data

12. 5. Many competitors reluctant to provide compensation data
6. If jobs are nonmarket-priced jobs, then slotting technique will not work and would be hard to explain/defend

13. Compensable Factors
Compensable factors are paid-for, measurable qualities, features, requirements or constructs that are common to many different kinds of jobs

14. Universal Compensable Factors
Skill – the experience, training, education, and ability required to perform a job under consideration
Effort – the measurement of the physical or mental exertion needed for job performance
Responsibility – extent to which employer depends on employee to perform job as expected
Working Conditions – physical surroundings and hazards of a job

15. Subfactors Example – page 226 (Bass definition) Factor – Skill
Intelligence or mental requirements
Knowledge required
Motor or manual skill
Learning time

16. Degrees (Levels)
Degrees are used to identify quantitative differences for the subfactors
Examples of degrees
Minimal
Slight
Moderate
Average
Considerable
Broad
Extensive

17. Weighting of Compensable Factors
Normalizing Procedure – page 229
Other methods