World at Work - GR3 - Job Analysis, Documentation and Evaluation (v3.02.7) [v3.02.7 ed.]

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Job Analysis, Documentation and Evaluation

About WorldatWork• The Total Rewards Association WorldatWork (www.worldatwork.org) is an international association of human resource professionals and business leaders focused on attracting, motivating and retaining employees. Founded in 1955, WorldatWork provides practitioners with knowledge leadership to effectively design and implement strategies and practices in total rewards - compensation, benefits, work-life, performance and recognition, development and career opportunities. WorldatWork supports its 30,000 members and customers in 75 countries with thought leadership, education, publications, research and certification. The WorldarWark group of registered marks includes: WorldatWork•, workspan •, Certified Compensation Professional or CCP•, Certified Benefits Professional• or CBP, Global Remuneration Professional or GRP", Work-Life Certified Professional or WLCP'", WorldatWork Society of Certified Professionals •, and Alliance for Work-Life Progress• or AWLP". Wor/datWork Journal, WorldatWork Press and Telework Advisory Group are part of the WorldatWork family.

Copyright 2007 WorldatWork. All Rights Reserved. No portion of this publication may be reproduced in any form without express written permission from WorldatWork.

WorldatWork Values and Protects Your Professional Development This book is your personal copy of the materials for this course, intended for your own use and professional development. To protect your and your company's considerable investment of time and resources for this course, WorldatWork does not permit reproductions or sharing of course materials in any form, including photocopying and scanning . Questions or concerns may be directed to WorldatWork Customer Relationship Services, 877/951-9191 (toll-free) or 480/922-2020 . Congratulations on your commitment to professional development and excellence . Thank you.

This WorldatWork cours~ can prepare the attenciee'tor the related examination in pursuit , of a Professional designation issued by WorldatWork Society of Certified ,Professionals.* ,, 0

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Up to four weeks of work experience is required.

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One through three months experience is required.

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Between three and nine months of experience is required.

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Nine through 11 months of experience is required.

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Twelve through 18 months of experience is required .

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Between 19 and 24 months of progressively more responsible experience is required.

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Between two and three years of progressively more responsible experience is required.

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Between three and five years of progressively more responsible experience is required.

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More than five years of progressively more experience is required.

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Job Evaluation Plan: Professional, Technical and Office Classifications

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Factor 3: Analytical Ability Consider the extent to which the work requires the ability to gather and interpret data and to find solutions to difficult and/or complex problems. This factor does not necessarily correlate with Factor 4. A high level of analytical ability may be required for jobs which involve little consequence of error.

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Job Evaluation Plan: Professional, Technical and Office Classifications Factor 6:

Work of Others

This factor measures the responsibility placed on a person to plan for, check the work of, and/or instruct or direct other employees. It does not involve the level of authority or responsibility found in supervisory and managerial positions. It is only concerned with the person who has a helper or the "leadperson" who has several employees doing the same or closely related work. Consider the size of the group and the complexity of the work performed by the group members.

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2. Frequent: 21 % to 50% of work time

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3. Very Frequent: 50% to 80% of work time

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Job Evaluation Plan: Professional, Technical and Office Jobs Factor 8:

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Adverse Working Conditions

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Good working conditions, almost complete absence of disagreeable elements. Employee exposed to adverse or hazardous working conditions 5% or less of work time.

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Occasional exposure to one or more unpleasant (noise, heat, dust, etc.) or hazardous conditions 6% to 20% of work time.

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Frequent exposure 21 % to 50% of work time.

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POINT FACTOR METHOD

Point Factor Method Advantages

Disadvantages

■

Reliable

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Expensive

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Objective

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Time-consuming

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Easy to evaluate new jobs

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Cumbersome

■

Can be tailored to company

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Creates inflexible hierarchy

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Difference between jobs is apparent

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Responsive to pay equity laws

Point Factor Method Advantages ■

Relatively reliable

■

Relatively objective

■

Easy to evaluate new or revised jobs

■

Compensable factors can be tailored to company

■

The degree of difference between jobs is apparent

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Responsive to pay equity laws and comparable worth parameters

Disadvantages ■

Expensive to develop or purchase

■

Time-consuming to design and implement

■

Cumbersome if many jobs are to be evaluated

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Creates inflexible hierarchy

GR3

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6.37

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Quantitative Plan Summary Job Component

Point Factor

Identify possible factors

X

X

Collect market data

X

Select/ define factors

X

X

Analyze and document jobs

X

X

Determine levels (degrees)

X

Define degrees

X X

Weight factors

X X

Convert weights to points

GR3

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6.38

© WorldatWork. All rights reserved.

Can You? ■

Identify the two quantitative job evaluation methods.

■

Define the terminology associated with compensable factors and describe the process involved in selecting, defining and weighting them.

■

Name the generic compensable factor groups and identify commonly used evaluation factors for each.

■

Explain the job component method, the steps involved and its advantages and disadvantages.

■

Explain the point factor method, the steps involved and its advantages and disadvantages.

GR3

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6.39

© WorldatWork. All rights reserved.

Module Quiz 1. What are the two quantitative job evaluation methods? A. Ranking and classification B. Job component and point factor C. Market-based and job content 2. What should one do when selecting compensable factors? A. Identify the organization's internal values B. Identify measures used for evaluating performance C. Identify several measures for each job characteristic D. Identify the top performers in the job group 3. Which of the following is considered one of the generic compensable factor groups? A. Values B. Behavior C. Knowledge D. Working conditions 4. Which method of job evaluation uses multiple factor regression analysis that may be used to predict salary or grade levels for non benchmark jobs? A. Market pricing B. Ranking C. Job component D. Point factor 5. What is one of the steps in the point factor job evaluation method? A. Define the budget that will be needed B. Define the degree levels within each compensable factor C. Define as many levels as possible within each factor to ensure an adequate degree of distinction D. Determine the dependent and independent variables in the regression analysis for each degree level 6. What is one of the advantages of the point factor job evaluation method? A. It is inexpensive to develop and/or purchase. B. It creates a flexible job worth hierarchy. C. It is responsive to pay equity laws. D. It can be implemented quickly and easily.

GR3

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6.40

© WorldatWork. All rights reserved.

module

Selection and Implementation Issues

WorldotWork.~

GR3

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7.1

© WorldatWork. All rights reserved.

Module 7

Selection and Implementation Issues

Introduction Each of the job evaluation plans presented in this course can be successfully implemented under the right circumstances. Plan selection requires careful consideration of organization issues, such as business environment, culture, organization structure, management support and compensation resources in addition to characteristics of potential plans. A successful implementation strategy enhances the credibility of the plan and promotes acceptance by managers and employees.

Objectives By the conclusion of this module, you will be able to accomplish the following: 1. Identify and describe some of the factors that should be considered when selecting a job evaluation strategy. 2.

Identify the characteristics that may be used to assess the suitability of different job evaluation methods and differentiate between methods based on these characteristics.

3. Explain implementation issues related to job evaluation. 4. Describe factors to consider when auditing a job evaluation plan.

GR3

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7.2

© WorldatWork. All rights reserved .

Selecting a Job Evaluation Strategy Key considerations ■

Business environment

■

Organizational culture

■

Organizational design

■

Top management approval and support

■

Compensation function

Selecting a Job Evaluation Strategy ■

Business environment - the key HR and business factors that contribute to the success of the organization, including ♦ ♦

♦ ■

Organizational culture - the structure, processes, style and history of an organization, including ♦ ♦ ♦ ♦ ♦

♦ ■

♦ ♦

Job-based or team-based, or a combination Flat (broadbanded) or hierarchical management structure Relatively stable or rapidly changing

Top management approval and support - senior management decisions and direction ♦ ♦ ♦ ♦

■

Decision-making mode (centralized or decentralized) Demand for quick re-evaluation due to changes in job content Management style Level of overall support for the HR function and compensation specifically Degree of openness in compensation communication Relative emphasis on either internal equity or external competitiveness

Organizational design - the way work is structured ♦

■

Labor supply Unionization status Ability to pay vis-a-vis business and labor competitors

Budget for staffing and training in job analysis, job documentation and job evaluation Use of outside instead of inside consultants Level of commitment to final results Communication style

Compensation function - the structure, size and competency ♦ ♦ ♦ ♦

Centralized versus decentralized Size of compensation staff Technical competence in job analysis, job documentation and evaluation Availability of labor market data GR3

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7.3

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Summary of Job Evaluation Methods and Techniques Market Data Emphasis

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Market Pricing

Ranking

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Cannot be used in isolation in "pay equity" or "comparable worth" jurisdictions

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Market determines organizational pay philosophy

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Easy to communicate

■

Little training required

■

Evaluators may bring different judgment criteria to exercise

■

No detail/documentation to justify evaluation

■

Little training required

■

Job descriptions can be inflated to fit a classification

■

Generally not practical for companies with numerous, diverse job families

■

Statistically accurate and relatively objective

■

Management oriented

■

Often perceived as "black box"

■

Easy to evaluate new or revised jobs

■

Relatively objective

■

Compensable factors can be tailored to company

■

A technique used within some already established job evaluation method Involves placing a job into a category or classification

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GR3

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7.4

© WorldatWork. All rights reserved .

SELECTING A JOB EVALUATION STRATEGY

Job Evaluation Plan Characteristics* MP

PF

JC

R/C

External

Internal Emphasis/ Focus

MP PF RIC JC Simple - - - - - - - - - - - - - - - - Complex Communicability R

MP/C

PF

JC High

Low Technical Complexity * See key for plan abbreviations

Job Evaluation Plan Characteristics These two charts show a relative position of each of the five job evaluation plan types on five different scales. The scales address key plan characteristics: ■

Emphasis/focus - Does the plan focus more on internal equity or external competitiveness?

■

Communicability - How easy is it to communicate how the plan works?

■

Technical complexity - What is the degree of technical complexity inherent in the plan?

Key: R = Ranking

JC = Job Component

C = Classification

MP= Market Pricing

PF = Point Factor

GR3

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7.5

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SELECTING A JOB EVALUATION STRATEGY

Job Evaluation Plan Characteristics* ... cont'd

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* See key for plan abbreviations

Job Evaluation Plan Characteristics ... cont'd ■

Time required - How long does it take to develop and implement?

■

Cost - What is the development and implementation cost relative to other plans?

Key: R = Ranking

JC = Job Component

C

MP = Market Pricing

= Classification

PF = Point Factor

GR3

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7.6

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SELECTING A JOB EVALUATION STRATEGY

Job Evaluation Strategy exercise

Example A: Traditional Manufacturing Inc. ■

What approach should the organization take?

■

What are the key issues?

Exercise - Job Evaluation Strategy Traditional Manufacturing is a large, privately held manufacturer of business equipment. More than half of its annual sales are to the federal government. The company dominates the marketplace for its products, but has started to see some erosion of market share to some overseas suppliers. There is a large human resources staff to serve the 20,000 employees. Management values have traditionally been paternalistic. There are no unions, but the company has maintained pay at union levels and taken extraordinary steps to ensure that employees are treated fairly. There are no incentive pay programs. In the last six months the company has lost some of its key long-term employees to small start-up firms and local affiliates of the company's overseas competitors . Detailed job descriptions have been created based on one-on-one interviews conducted by trained compensation analysts.

Which approach to job evaluation would you recommend? Why?

What are the key issues?

GR3

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7.7

© WorldatWork. All rights reserved .

SELECTING A JOB EVALUATION STRATEGY

Job Evaluation Strategy ...cont'd exercise

Example B: Technology Consulting Inc. ■

What approach should the organization take?

■

What are the key issues?

Exercise - Job Evaluation Strategy Technology Consulting Inc. is a 5-year-old provider of software consulting services that has doubled in size in the last two years from 200 to 400 employees. The workforce includes a large contingent of technical personnel in high-demand jobs. The industry is very competitive and business success is highly dependent on having a substantial core of key technical resources available to address client needs. Internal equity is important, but the company's compensation strategy emphasizes a market-driven pay program. It has a relatively small HR staff and need to develop a competitive job worth hierarchy within three months. Brief job documentation has been completed by supervisors using standardized questionnaires developed by human resources. Which approach to job evaluation would you recommend? Why?

What are the key issues?

GR3

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7.8

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Implementation Issues ■

Committee vs. noncommittee

■ Cost of development ■

Communicating results

■

Centralized or decentralized

■

Effect on jobs and individuals

Implementation Issues Key issues to consider in developing a job evaluation implementation strategy include the following: ■

Committee vs. noncommittee approach ♦ A job evaluation committee may be used to assist the human resources department in evaluating some or all jobs to be covered by the plan.

■

Cost of development ♦ Limited budgets may preclude complicated systems ♦ Cost of lost productivity may be prohibitive ♦ Cost of gathering data for the evaluation

■

Communicating job evaluation results ♦ Implementing a new job evaluation plan requires decisions on how the results will be communicated throughout the organization. Plan administrators must be able to address the following issues: ■ Level of detail regarding individual evaluation ■ Appeals process when employee challenges evaluation result ■ Procedures established to evaluate new and revised jobs in the future

■

Centralized or decentralized ♦ Determine whether there is a greater need for standardized results or divisional flexibility ♦ Complicated or highly complex systems are difficult to decentralize. ♦ For organizations with multiple locations, will implementation be handled by the corporate office or be delegated to each division location?

■

Effect on jobs and individuals ♦ Consider how resulting changes in the pay hierarchy will affect the pay rate for specific jobs ♦ Consider how individual pay will be adjusted based on changes to job hierarchy and base pay structure GR3

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7.9

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IMPLEMENTATION ISSUES

Job Evaluation Committee Members ■

Represent major functional areas

■

Are well respected

■

Comparable levels of power

■

Know importance of the process

■

Open-minded, respect others' opinions

■

Support the integrity of the system

Job Evaluation Committee Members Successful job evaluation committees typically include members who: ■

Represent major functional areas throughout the organization

■

Are well respected and perceived as knowledgeable about the jobs to be evaluated

■

Represent comparable levels of power and influence

■

Understand the importance of the job evaluation process and are committed to making it work

■

Will be open-minded and respect the opinions of others on the committee

■

Will work to support the integrity and credibility of the system, as opposed to potential "horse trading ."

GR3

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7.10

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IMPLEMENTATION ISSUES

Job Evaluation Committees Advantages

Disadvantages

■

Clarify job content information

■

Commitment of time necessary

■

Improve accuracy of evaluation ratings

■

Turf issues and bias

■

■

Enhance credibility

Judgments incumbent-biased

Job Evaluation Committees Advantages ■

They can clarify job content information found in job documentation.

■

They can improve the accuracy of job evaluation ratings.

■

They can substantially enhance the credibility of job evaluation results.

Disadvantages Careful selection and training of job evaluation committee member can minimize the potential problems. ■

It may be difficult to gain the commitment of time necessary to complete evaluations within a reasonable time frame.

■

Turf issues and territorial bias can be difficult and time-consuming to resolve.

■

Judgments may be more incumbent biased.

GR3

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7.11

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IMPLEMENTATION ISSUES

Tips for Success ■

Confirm final evaluation results

■

Manager information kits and FAQs

■

Anticipate concerns

■

Create a feedback loop

Tips for Success ■

Confirm final evaluation results with senior managers

■

Utilize communication tools such as manager information kits and FAQs (frequently asked questions)

■

Anticipate concerns by identifying jobs and incumbents most impacted by the new program before announcing the results

■

Create a feedback loop in the process to uncover issues as quickly as possible

GR3

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7.12

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IMPLEMENTATION ISSUES

Introducing a New Job Evaluation Plan ■

Fit with organization, culture and strategy

■

Selecting benchmark positions

■

Education and communication

■

Involvement of management and employees

■

Appropriate selection and weighting of compensable factors

Introducing a New Job Evaluation Plan The following should be considered when introducing a new job evaluation plan. ■

Fit with organization, culture and strategy

■

Selection of appropriate benchmark positions

■

Education and communication about job evaluation to employees and management ♦

How the new plan supports company strategy

♦

How the plan works and how it supports the business objectives of line management

♦

How the plan helps the company determine pay and manage pay programs fairly and consistently

■

Involvement of management and employees in design and implementation

■

Appropriate selection and weighting of compensable factors - what you value and for which you want to pay

GR3

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7.13

© WorldatWork. All rights reserved .

Audit of Job Evaluation Plans and Practices ■

Periodic review

■

Identify problems and issues

■

Review job evaluation process and practices

Audit of Job Evaluation Plans and Practices ■

Periodic review, usually annual

■

Identify problems and issues

■

♦

Employee complaints about system

♦

Turnover statistics and exit interview information

Review job evaluation process and practices ♦

Training for job evaluators

♦

Written instructions and guidelines

♦

Job evaluation decisions made or reviewed by more than one person

♦

Inter-rater reliability

♦

Persons involved in job evaluation decisions represent broad group and cross section of company, including protected classes.

♦

Factors applied consistently to all evaluated jobs

♦

Methods and procedures have been changed to reflect changes in organization.

GR3

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7.14

© WorldatWork. All rights reserved .

Building a Base Pay Structure Job Analysis

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Market Data Emphasis

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Data Collection and Analysis Job Content Evaluation

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