Tài Liệu Lecture Compensation Management Unit 3 - Job Based Structure.pdf

8/31/2021 1 Unit 3 JOB BASED STRUCTURE Instructor Associate Prof Dr Pham Thi Bich Ngoc National Economics University Outlines • Job analysis • Job evaluation Content, value and external market link •[.]

Unit 3:

JOB-BASED STRUCTURE

Instructor: Associate Prof Dr Pham Thi Bich Ngoc

National Economics University

Outlines

• Job analysis

• Job evaluation: Content, value and

external market link

• Job evaluation methods

• Pay structure

JOB ANALYSIS

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STRUCTURES BASED ON JOBS, PEOPLE,

OR BOTH

• Job-based approach: Most common

Determining the Internal Job Structure

Job Analysis

• A systematic process for gathering, documenting,

and analyzing information in order to describe jobs

• Identifies and defines job content

• Job duties that employees must perform

• Worker requirements (compensable factors) are needed

to perform the job

• Job context or working conditions, like:

• Social context

• Physical environment

Steps in the Job Analysis Process

• Determine a job analysis program

• Select and train analysts

• Job analyst orientation

• Conduct the study: data collection methods and

sources of data

• Summarize the results: writing job descriptions

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Determine a job analysis program

DECIDE BETWEEN USING AN

ESTABLISHED SYSTEM OR DEVELOPING

ITS OWN

TYPICAL METHODS INCLUDE QUESTIONNAIRES, INTERVIEWS, OBSERVATION, AND PARTICIPATION

Select and train analysts

Job analysts must be able to collect job-related information

through various methods, relate to a wide variety of employees,

analyze the information and write clearly and succinctly

Ideally, a task force of representatives from throughout the

company conducts the analysis, while HR staff members

coordinate it

Training should be provided on the basic assumptions of the

model and the procedures

Direct job analysts orientation

• Before starting job analysis techniques the analyst

must analyze the context in which employees

perform their work

• Analysts should obtain and review internal

information

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• The most common methods of data collection are questionnaires and observation

• Most common sources of data are job incumbents, supervisors, and the job analysts

• A reliable job analysis method yields consistent results under similar conditions

• A valid job analysis method accurately assesses each job’s duties

• Collected information

Conduct the study: Data collection

methods and sources of data

Summarize the results: writing job

descriptions

• Should summarize the job’s purpose and list its

tasks, duties, responsibilities, as well as the KSA’s

necessary to perform the job at a minimum level

• Should contain:

• Job title to indicate the job designation

• Job summary with two to four concise, descriptive

statements

• Job duties to describe the major work activities and

supervisory responsibilities

• Worker specification to list the education, skills, abilities,

knowledge, and other qualifications needed to perform

the job

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JUDGING JOB ANALYSIS

• Reliability: is a measure of the consistency of results among

various analysts, various methods, various sources of data,

or over time

• Validity: examines the convergence of results among

sources of data and methods

JOB EVALUATION DEFINED

Job evaluation is a systematic process for defining

the relative worth or size of jobs within an

organization in order to establish internal relativities

and provide the basis for designing an equitable

grade and pay structure, grading jobs in the structure

and managing relativities

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JOB EVALUATION DEFINED

The evaluation is based on a combination of

AIMS OF JOB EVALUATION

• Establish the relative value or size of jobs, ie internal

relativities;

• Produce the information required to design and maintain

equitable and defensible grade and pay structures;

• Provide as objective as possible a basis for grading jobs

within a grade structure, thus enabling consistent decisions

to be made about job grading;

• Ensure that the organization meets ethical and legal equal

pay for work of equal value obligations

FEATURES OF JOB EVALUATION

• Systematic

• Judgemental

• Concerned with the job not the person

• Concerned with internal relativities

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DEFINING JOB EVALUATION: CONTENT, VALUE, AND

EXTERNAL MARKET LINKS

• Content and Value

• Internal alignment based on content orders jobs on the basis of the

skills required for the jobs and the 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

• Job evaluation as a process for linking job content and internal value

with external market rates

• Aspects of job content (e.g., skills required and customer contacts)

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

DEFINING JOB EVALUATION: CONTENT,

VALUE, AND EXTERNAL MARKET LINKS

• Measure for measure” versus “Much do 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

• Compensation professionals use compensation surveys to determine the prevailing pay rates in the relevant job markets

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• Must balance external market considerations with internal consistency objectives

Assumptions Underlying Different Views of

• Stakeholders can reach consensus on value.

• Value cannot be determined without external market.

• Honing instruments will provide objective measures.

• Negotiating brings rationality to a social/political process; establishes rules of the game and invites participation.

Determining an Internally

Aligned Job Structure

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“How-To”: Major Decisions

• Establish the purpose

• Supports organization strategy

• Supports workflow

• Is fair to employees

• Motivates behavior toward organization objectives

“How-To”: Major Decisions

• Single versus multiple plans

• Different evaluation plans are used when the

work content is too diverse to be evaluated

by one plan

“How-To”: Major Decisions

• 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

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• The job is common across a number of different

employers It is not unique to a particular employer.

• A reasonable proportion of the work force is employed in

this job.

“How-To”: Major Decisions

• 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

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Comparison of Job Evaluation

Methods

Ranking method

• 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

Ranking method

• Disadvantages:

• Ranking criteria are usually poorly defined

• Evaluators must be knowledgeable about

every job under study

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Paired Comparison Ranking

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

• 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

Point Method

• Point methods have three common characteristics:

• (1) compensable factors, with

• (2) factor degrees numerically scaled, and

• (3) weights reflecting the relative importance of

each factor.

Each job’s relative value, and hence its location in the pay

structure, is determined by the total points assigned to it.

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The Point Method

• The most popular job-content method because it gives

compensation professionals better control over balancing

internal and market considerations

• A quantitative method that assigns numerical values to

compensable factors which are summed to indicate the

overall value of the job

• The relative worth of the job is established by the

magnitude of its overall numeric value

• Evaluates jobs by comparing compensable factors

• Each factor is defined and assigned a range of points based on the

factor’s relative value to the company

• Compensable factors are weighted to represent the relative

importance of each factor to the job

Steps

8 steps in the design of a point plan:

1 Conduct job analysis

2 Determine compensable factors

3 Scale the factors

4 Weight the factors according to importance

5 Select criterion pay structure

6 Communicate the plan and train users

7 Apply to non benchmark jobs

8 Develop online software support

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

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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

• 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

Step 2: Determine Compensable

Factors

• 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

• Planning, organizing, coordinating and integrating knowledge

• Communicating and influencing skills

• Problem solving:

• Environment—the availability of guidance for the thinking in terms of policies,

procedures, guidelines and instructions, along with the degree of definition around

• Impact—the magnitude and nature of the impact that the job has on the

organization’s ability to achieve its mandate

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Hay Guide Chart – Profile Method of

Job Evaluation

Characteristics and factors/aspects of

the Hay Guide Chart

Characteristics and factors/aspects of the

Hay Guide Chart

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Characteristics and factors/aspects of the

Hay Guide Chart

Characteristics and factors/aspects of the Hay

Characteristics and factors/aspects of

the Hay Guide Chart

• Know-how is the sum of every kind of knowledge, skill

and experience required for standard acceptable job

performance

• Activity: Performance or supervision of work which is

specific as to objective and content with appropriate

awareness of related activities

• Heterogeneous: Operational or conceptual integration

of functions which are diverse in nature and in

objective in an important management area, or central

co-ordination of a strategic function

Step 2: Determine

Compensable Factors (cont.)

• 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

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

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Step 3: Scale the Factors

• 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

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

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

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Job Evaluation Form

Step 5: Communicate the Plan

and Train Users

• 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

Step 6: Apply to Non-benchmark

Jobs

• 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

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Step 7: Develop Online Software

Support

• Online job evaluation is widely used in larger

organizations

• Becomes part of a Total Compensation Service

Center for managers and HR generalists to use

Who Should be Involved?

• 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

Who Should be Involved?

• 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

• Procedures should be judged for their susceptibility

to political influences

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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

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

• Internal alignment is most influenced by fair and

equitable treatment of employees doing similar work in

the same skill/knowledge group

Resulting Internal Structures – Job, Skill, and

Competency Based

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Balancing Chaos and

Control

• Must be flexible to adapt to changing conditions

• Avoids bureaucracy and increases freedom to

manage

• Also reduces control and guidelines, making

enforcement of fairness difficult

Balancing internal and market

considerations using the point method

• By converting point values into the market value of

jobs through regression analysis

• Regression analyses enable compensation professionals

to set base pay rates in line with market rates for

benchmark or representative jobs

• Companies get market pay rates through compensation

surveys

• A company’s value structure for jobs based on the point

method will probably differ from the market rates

Alternative Job-Content

Evaluation Approaches

1 Simple ranking plan

- This plan orders all jobs from lowest to highest according to a single criterion,

such as job complexity

2 Paired comparison and alternation ranking

• Paired comparison

• Useful when there are many (20 or more) jobs to rate

• Every job is paired with every other job

• After all pairs are rated, the jobs are ranked by total points received

• Alternation ranking

• Orders jobs by extremes

• The relative value of each job is judged by a single criterion

• Ranking begins by determining which job is the most then least valuable

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