Job-Based Structures and Job Evaluation: Mcgraw-Hill/Irwin

Chapter 5
Job-Based Structures and

Job Evaluation
McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
Chapter Topics
❖ Job-Based Structures: Job Evaluation

❖ Defining Job Evaluation: Content,
Value, and External Market
Links
❖ “How-to”: Major Decisions
❖ Job Evaluation Methods
❖ Who Should Be Involved?
5-2
Job-Based Structures: Job
Evaluation
❖ 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
5-3
Job-Based Structures: Job
Evaluation (cont.)
❖ Organizational culture
❖ External market
5-4
Defining Job Evaluation: Content,
Value, and External Market
Links
❖ 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
5-5
Defining Job Evaluation: Content, Value,
and External Market Links (cont.)
❖ 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
5-6
Exhibit 5.3: Determining an
Internally Aligned Job Structure
5-7
“How-To”: Major Decisions
❖ Establish the purpose

❖ Supports organization strategy
❖ Supports work flow
❖ Is fair to employees
❖ Motivates behavior toward organization
objectives
5-8
“How-To”: Major Decisions (cont.)
❖ Single versus multiple plans

❖ Different evaluation plans are used when
the work content is too diverse to be
evaluated by one plan
5-9
❖ 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
5-10
Exhibit 5.4: Benchmark Jobs
5-11
❖ Diversity in the work can be thought of in

terms of :
❖ Depth (vertically)
❖ Breadth (horizontally)
❖ Number of job evaluation plans used
hinges on:
❖ How detailed an evaluation is required to
make pay decisions
❖ How much it will cost
❖ Choose among job evaluation
methods
5-12
Exhibit 5.5: Comparison of Job
Evaluation Methods
5-13
Ranking
❖ 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
5-14
Ranking (cont.)
❖ Disadvantages:
❖ Ranking criteria are usually poorly defined
❖ Evaluators must be knowledgeable about every
job under study
5-15
Classification
❖ 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
5-16
Classification (cont.)
❖ 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
5-17
Exhibit 5.8: Classifications for Engineering
Work Used by Clark Consulting
Source: Clark Consulting. Used by permission.

5-18
Point Method
❖ Common characteristics:
❖ Compensable factors
❖ Factor degrees numerically scaled
❖ Weights reflect relative importance of
each factor
5-19
Point Method (cont.)
❖ Conduct job analysis

❖ Determine compensable factors
❖ Scale the factors
❖ Weight the factors according to
importance
5-20
Step 1: Conduct Job Analysis
❖ 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
5-21
Step 2: Determine Compensable
Factors
❖ Compensable factors are those
characteristics in the work that
the organization values, that
help it pursue its strategy and
achieve its objectives
5-22
Factors (cont.)
❖ 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
5-23
Factors (cont.)
❖ Based on the work itself
❖ Documentation must support the choice of
factors
❖ Acceptable to the stakeholders
5-24
Step 3: Scale the Factors
❖ 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
5-25
Step 3: Scale the Factors (cont.)
❖ 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
5-26
Exhibit 5.14: Factor Scaling –
National Metal Trades Association
5-27
Step 4: Weight the Factors
According to Importance
❖ 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
5-28
Step 4: Weight the Factors
According to Importance (cont.)
❖ 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
5-29
Exhibit 5.14: Job Evaluation Form
5-30
Who Should be Involved?
❖ 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
5-31
Who Should be Involved? (cont.)
❖ 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
5-32
❖ 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
5-33
❖ “I know I speak for all of us when I

say I speak for all of us”
❖ Procedures should be judged for their
susceptibility to political influences
5-34
The Final Result: Structure
❖ The final result of the job analysis –

job description – job evaluation
process is a structure, a hierarchy
of work
❖ Organizations commonly have multiple
structures derived through multiple
approaches that apply to different
functional groups or units
5-35
The Final Result: Structure (cont.)
❖ Internal alignment is most influenced

by fair and equitable treatment of
employees doing similar work in the
same skill/knowledge group
5-36
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Chapter 5

Job-Based Structures and

❖ Job-Based Structures: Job Evaluation

❖ Establish the purpose

❖ Single versus multiple plans

❖ To be sure that all relevant aspects of

❖ Diversity in the work can be thought of in

❖ Orders job descriptions from highest

❖ A series of classes covers the range of

❖ Greater specificity of the class definition

Source: Clark Consulting. Used by permission.

❖ Conduct job analysis

❖ A representative sample of jobs

❖ Scales reflecting different degrees

❖ Criteria for scaling factors:

❖ Managers and employees with a stake

❖ Compensation professionals are

❖ Compensation professionals are primarily

❖ “I know I speak for all of us when I

❖ The final result of the job analysis –

❖ Internal alignment is most influenced

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