Job Evaluation: Principles and Methods

( M. Zulaybar-Jan. 30, 2014)

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Module One: Job Evaluation Overview: Fundamental Concepts and Principles

Compensation Management Overview

COMPENSATION PHILOSOPHY

JOB DOCUMENTATION

JOB EVALUATION

(INTERNAL VALUE)

JOB PRICING

(EXTERNAL VALUE)

SALARY STRUCTURE

ADMINISTRATIVE

PROCEDURES

PAY DELIVERY

SYSTEM

TRAINING AND COMMUNICATION

IMPLEMENTATION

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Definition:

A systematic method of appraising the value of each job relative to other jobs in an organization.

A basis for determining salary levels

Underlying principles: – Equal pay for equal work.

– More pay for more difficult work.

– Similar or substantially similar

positions should receive similar pay.

– It is the position which is being evaluated and not the person.

– A position is always evaluated in relation to other positions.

Objectives of Job Evaluation: – Design and document positions.

– Establish a system whereby positions are properly evaluated.

– Develop an equitable classification

and grading system .

– Based on established job grades,

use this as basis for developing

salary structures.

USES OF JOB EVALUATION

Job Evaluation

Compensation

Establishing

Career Paths

Assigning

Employees to

Appropriate Jobs

Establishing

Performance

Standards

Recruitment

Organizational

Design

Legal

Considerations Morale

Building

Considerations in Job Evaluation: – Management Support

– Factors for evaluation clearly defined

– Use of Committee for objectivity

– Employee understanding and acceptance through proper communication

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Module Two: A. Job Analysis

JOB

DESCRIPTION

VALIDATION

INTERVIEW

JOB INFORMATION

DATA GATHERING

TOOLS: • Interview • Observation • Questionnaire • Focus Group Discussion

Job Analysis Process

Job Analysis

• Definition of Job Analysis: – The process of identifying and analyzing all

related job information to arrive at an accurate understanding of the job content.

– Tools: Interview Observation Questionnaire Focus Group Discussion

• Interview

– Planned discussion with the employee and his manager.

– The interview process consists of: Explaining the purpose of the job analysis;

Asking planned questions and appropriate follow-up questions;

Taking detailed notes;

Reviewing the discussion to ensure a full and accurate understanding of the job.

• Observation

– Is most appropriate for manual and repetitive production work.

– For more complicated and protracted cycles, it is necessary to observe several cycles or by piecemeal.

– Cycles may occur over days or weeks, thus, it is important to know if the entire function or just part of it is being observed.

• Job Questionnaire

– The questionnaire is developed to tailor-fit the design of the Point Rating Plan.

– The design of the questionnaire serves to guide a more structured and formal interview process.

– Very useful tool to complement the Point Rating System of Job Evaluation.

• Focused Group Discussion

– Use of questionnaire

– Instead of answering individually, several incumbents /supervisors are asked to be part of focused group to answer the questionnaire

– Applicable for jobs with numerous incumbents

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Module Two: B. Job Documentation

Job Documentation

• Job documentation is…

– the process of describing duties, responsibilities, and other requirements for jobs;

– Output is Job Description

• basic purpose of the job (job mission)/summary

• key organizational relationships

• duties and responsibilities

• employee characteristics required for the competent

performance of the job

JOB DESCRIPTION

A summary of the most important features of a job.

I. Job Identification

Position Title : Department/Division:

II. Key Organizational Relationships

Reports to : Supervises :

III. Primary Function/Job Summary IV. Duties and Responsibilities V. Job Specifications

Minimum Education: Minimum Experience: Special Skills:

VI. Disclaimer VII. Approvals

Job Description Format

I . JOB /POSITION IDENTIFICATION

a. Position Title

- primary descriptive word should proceed the secondary

Ex. Dean –College of Dentistry

- should be brief & as descriptive of all the phases of job as possible

- should indicate, wherever possible, the skill level & supervisory level of the job

Ex. Assistant Professor IV

Guidelines to follow when determining appropriate job titles:

• Consider organizational culture

• Use titles which are descriptive of the nature and level of work

Ex. Human Resource Officer, Instructor, Academic Coordinator

• Include organizational function in the title, if appropriate

Ex. Asst. to the Dean for Student Affairs

•Refrain from inflating titles

Ex. Liaisonman

•Consider Human Resource Information Systems (HRIS) limitations

b. Location - Section - Department - Division/College

c. Job Classification

- Teaching -Academic - Non-Academic

- Non-Teaching ( Administrative)

d. Pay Grade/Salary

II. KEY ORGANIZATIONAL RELATIONSHIPS

a. Reports to : immediate superior

b. Supervises: job titles and number of direct reports

III. PRIMARY FUNCTION

Guidelines to writing the general summary:

- State the general nature, level and purpose of

the job

-Limit length to approximately three ( 3) to

five (5) sentences

Note: It may be easier to write the general summary after completing other sections of the job description

• Major Areas of Responsibility - Specific job accountability

Ex. Selection, Labor Relations, Compensation &

Benefits etc. for Human Resource Officer

- Use key words only

• Specific Duties

- Use one sentence description

- Start with an active verb that reflects actual work

Ex. Analyzes, Collates, Designs, Consolidates vs. Prepares

IV. DUTIES and RESPONSIBILITIES

V. JOB SPECIFICATION

• Identify the knowledge, skills, abilities (KSAs) and competencies to competently perform the job

Examples:

-Education / special training ,

licenses, etc.

- Work experience

- Basic and Technical Competencies

Job Description Maintenance

• Job descriptions must be kept up to date to make proper contribution to employee compensation programs

• Conduct comprehensive review every two or three years

• Use checklist to assure consistency of the format of job description

Who should write job descriptions?

• Human Resources

• Incumbent in job

• Supervisor of job holder

•Incumbent and Supervisor with HR concurrence

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Module Three: Job Evaluation Methodologies

• Non-Quantitative – Whole-Job Slotting/Ranking

– Classification

• Quantitative – Factor Comparison

– Point Rating Method

Job Evaluation Methodologies

Definition:

Classifies jobs into predefined levels.

“Shoebox Approach”

Whole Job Slotting/Ranking

Process:

-Collect information on jobs

-Establish the grading hierarchy of the organization

-“Slot” jobs based on perceived value into the perceived appropriate grade level

-Ranks the job ( whole) not on specific factors

Advantages:

• Simple, easy to design and understand

• Suitable for small size organization

• Less costly

• Less time consuming; less work ( no need for Com.)

Disadvantages:

• Very subjective; bias from raters

• Very open to questions on objectivity of the process

Whole Job Slotting Sample

Positions Job Grade

Messenger 1

Administrative Associate 2

Finance Associate 3

Librarian 4

Registrar 5

Finance Supervisor 6

Guidance Counsellor 7

Academic Dept. Head 8

Dean 10

Definition:

-Assigns jobs to salary grades based on pre-

established criteria

-The criteria may be broken out into compensable factor definitions

Classification

Process:

-Determine number of grades desired in grade

hierarchy

-Choose factors (as applicable)

-For each grade, determine appropriate criteria/factor definitions

-Slot jobs into grades based on best fit with criteria/factor definitions

Advantages:

• Simple, easy to design and understand • Can be applied to large number or variety of jobs • Easy to integrate new jobs • Less time consuming; less work • More defensible than Ranking Method

Disadvantages:

• Description of each grade per factor needs to be done • Not suitable for organizations with large no. of jobs • Very subjective; bias from raters • Very open to questions on objectivity of the process;

maybe criticized for forcing jobs into grades

Classification Illustration (Administrative)

Factors I II III IV

Knowledge and Skill

Basic Level Skills: Follows simple written and oral instructions; knowledge of defined work routines; may require typing or operation of standard machines; includes checking, recording, and posting of information

Intermediate Level Skills: Follows straightforward written and oral instructions; knowledge of several work routines; reads various references, extracts information, and applies basic arithmetic functions; may require typing or operation of complicated machines

Broad Range of Clerical Skills: Ability to gather, organize verify, compose, and/or analyze data in the completion of several defined, multi-step procedures; may require the operation of more complicated equipment

Knowledge of a Specialized Field: Knowledge of a specialized clerical or administrative function, includes knowledge of relevant policies and procedures; may require use of specialized software; able to analyze and interpret diverse information

Impact/ Accountability

Highly Restricted Impact: Exerts a noticeable impact on immediate work area only; influence is indirect and supportive in nature with no accountability beyond the incumbent’s position

Discernible Impact on the Work Unit: Impact is generally confined to the immediate work area; may affect closely related activities in the unit or section on a temporary basis; influence is indirect and supportive in nature; accountability is restricted

Has Considerable Impact on Work Unit: Impacts activities in other work areas occasionally; accountability is indirect; may provide information to decision-making process within the unit

Considerable Impact on Other Work Units: Impacts activities in other work areas on a day-to-day basis; accountability is primarily indirect, but may be shared for activities affecting the work unit only; may provide information to decision-making process

Grade Level

Classification/Grading Method Sample

Positions Job Grade

Messenger 1

Administrative Associate 1

Finance Associate 2

Librarian 3

HR Specialist 3

-A compensable factor is any factor used to provide a basis for judging job value in a job-evaluation plan.

-The most commonly employed compensable factors include skills required, effort required, responsibility and working conditions.

Compensable Factors

Guidelines in Selecting Compensable Factors

• Factors should be pertinent to positions covered in the study. • Factors should be definable and measurable. • Factors should be common to all the jobs being evaluated under

a given system. • Factors should not be too numerous.

– maximum of 15 – normal range 8 -12

• Factors should not overlap. • Factors should be ratable. • Factors must be acceptable to both workers and management.

Factors

• Broadly-defined categories of elements which measure relative worth among jobs

• Set of standards against which each job can be

compared and rated; differentiating job skills and knowledge required, level of effort and responsibility, the nature and qualification requirements of the work; and the conditions under which job holders perform their work.

JOB RATING PLAN

Subfactors

• Component aspects of job content within factor groups

Degrees

• Measurement scales or “yardsticks” which identify specific levels of each subfactor

JOB RATING PLAN

Skill

Effort

Characteristics inherent in the job. This can also be treated as a percentage utilization of know-how.

Responsibility

Accountability of the position for actions, consequences, and on end results. It is the measured effect of the job on end results.

Three Major Factors in a Job Rating Plan

Every kind of knowledge or skill, however acquired, for the satisfactory performance of duties and responsibilities of the job.

Education refers to the minimum level of technical knowledge and skills necessary to perform the job satisfactorily as required through various levels of formal education and training. Experience refers to the minimum length of work-related experience required for the satisfactory performance of the duties and responsibilities of the job. Interpersonal Skills refers to the nature of interactional skills used in dealing with other people inside and outside the organization as well as the extent of such contact.

Sample Job Rating Factors: Skill

Complexity of Work measures the degree of mental effort, analysis and creative thinking required to solve problems encountered in the performance of tasks. It also considers the amount of guidance received while discharging the functions of the position. Planning and Organizing considers the degree of complexity and the scope of the plans made for the satisfactory performance of the basic functions of the position. This factor excludes responsibility for deciding or acting on the plans. Physical Effort measures the degree and continuity of manual exertion and/or physical strain required in the performance of the job’s normal duties.

Sample Job Rating Factor: Effort

For Company Assets and Confidential Information refers to the worth of company assets or tangible items of value to the company (e.g., cash, checks, equipment, etc.) which the positions is directly compensable for; and/or or refers to the level confidentiality and importance of information, records, and reports prepared, handled and maintained. Impact on Operations pertains to the extent of accountability for end results and the possible company gains/losses resulting from decisions made within the positions scope of responsibility. Safety of Others measures the degree of responsibility for the safety of others as determined by the amount of care required in the performance of the position’s functions due to possible injuries to others, and the number of people which can be affected.

Sample Job Rating Factors: Responsibility

Generic Factor Group: Skill

Specific Factor Name: Experience

Description : This factor measures the time required, on related work and on-the- job training in the job being evaluated, for an individual to attain satisfactory performance standards under normal supervision.

Example of Compensable Factors

Degrees 1st Degree – Up to and including three (3) months

2nd Degree – Over three (3) months, up to and

including twelve (12)months

3rd Degree – Over one (1)year, up to and

including three (3)years

4th Degree – Over three (3)years, up to

and including five (5)years

5th Degree – Over five (5)years

Factor Comparison

Definition:

Ranks jobs on various factors by comparing

against other jobs in the organization

Process:

Define factors and JE Plan

Identify JE Com. Members/Train Com.

Distribute Job Description and/or Job Analysis Questionnaire at least 3 days before the meeting

Call JE Meeting and rank all jobs, one factor at a time

Determine composite rank order

Subdivide into grades

Secure approval from Management

Communicate

Factor Comparison

Advantages:

System design is time efficient

Relatively uncomplicated process which

requires minimal training

Concept is easy to communicate

More objective than Ranking and Classification

Disadvantages:

Does not measure relative job values

May be difficult to integrate new or unique

jobs

Job Title Knowledge and

Skills

Problem Solving

Impact Total Rank*

Grade

Controller 7 7 7 21 5

General Accounting Manager

6 6 6 18 4

Accounting Supervisor

5 5 4 14 3

Staff Accountant 3 4 3 11 3

Accounts Payable Supervisor

4 3 5 12 3

Accounting Clerk 2 2 2 6 2

File Clerk 1 1 1 3 1

1 5 4 15-18

2 6-10 5 19-21

3 11-14

Point Ranges

Factor Comparison-Finance

Definition:

-Evaluating job relative to factors,

sub-factors and degrees

- Most structured and scientific plan

Point Rating

Process: -Develop JE Plan -Identify JE Com. Members -Train JE Committee -Distribute Job Description and/or Job Analysis

Questionnaire at least 3 days before the meeting -Call JE Meeting

-Assign point values to each job based on comparison with carefully defined factor levels -Identify and define factors -Define factor degree levels -Assign factor weights

-Com. to review results and agree on final rating -Secure approval from Management -Communicate

Point Rating

Advantages:

• Analyses jobs per factor ( even degrees); very systematic

• System relatively defensible and justifiable; most scientific

• Can be applied to large number or variety of jobs

• Easy to integrate new jobs

• Most widely used

Disadvantages:

• System design most difficult and time consuming

• Requires JE Committee

• Not easy to understand; requires training of Com. Members

• Too much time needed ( Training and JE Meetings)

• Very expensive; not suitable for small organizations

Sample (Point Rating Plan)

Weight Point Factors

. 40% Skills and Knowledge I II III IV V

20 a. Education 4 8 12 16 20

10 b. Experience 2 4 6 8 10

10 c. Training 2 4 6 8 10

30% Nature of Work 5 a. Physical 1 2 3 4 5

5 b. Mental Demand 1 2 3 4 5

5 c. Visual Demand 1 2 3 4 5

10 d. Interpersonal Contact 2 4 6 8 10

5 e. Working Conditions/Hazards 1 2 3 4 5

30% Accountability 10 a. Cash, Equipment & other 2 4 6 8 10

Company Assets

10 b. Records/Reports/Information 2 4 6 8 10

5 c. Impact to Operation 1 2 3 4 5

5 d. Consequence of Error 1 2 3 4 5

100%

Point Ranges

• Determine Grade Level using the following points.

Grade 1 200 - 360

2 361 - 520

3 521 - 680

4 681 - 840

5 841 – 1000

* Formula:

a. Highest Possible Points – Lowest Possible Points = factor

b. Lowest points plus factor is highest point in range; do this for all with no overlap

Point Rating Sample-Adm.

Positions JE Points Job Grade

Messenger 280 1

Administrative Associate

400 2

Finance Associate 500 2

Librarian 600 3

Registrar 700 4

Coordinator 850 5

JE Committee Composition

a. Chairman b. Facilitator

c. Com. Representatives

Job Evaluation Session Process

a. Job Descriptions and JE Plan given in advance

b. Horizontal or vertical rating c. Com. Representative asks if there are clarifications on the Job Description d. Com . Representative gives rating e. If there are questions, defends; if none proceed f. Consensus ; if needed vote; if tie, Chairman decides

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Module Four: Job Evaluation Implementation

High

Low

High Low

Lead Role

Collaborative Role

Over-The-Shoulder Role

Line Management

HR

In

vo

lvem

en

t PROJECT ORGANIZATION

DEVELOPMENT OF JOB CLASSIFICATION FRAMEWORK

DESIGN OF COMPENSATION STRUCTURE

IMPLEMENTATION

Design of

Compensation

Structure

Internal and

External Pay

Analysis

Project

Organization

Conduct of

Job Evaluation

Workshop Job Analysis

Development of

Job Rating

Plan

Rating and

Classification of

Positions

Monitoring of

Implemented JE

System

Development of

Implementation

Program

Process

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Module Five: Job Classification

• The Job Classification System serves two primary purposes:

The first is to verify and document the value of internal

equity as to the results of Job Evaluation by providing the hierarchy of jobs in the organization.

The second is to relate the classification system or hierarchy of jobs to labor market values, and through this linkage, establish salary structures.

• Rank-and-File:

Those employees whose day-to-day duties and responsibilities are as follows: Routine and transactional functions

Clerical in nature

Coordination works

Performs simple to moderate execution of work plans and programs, and technical specifications

Job Categories

• Supervisory:

Those employees who, in the interest of the employer, effectively

recommends such managerial actions if the exercise of such authority is not merely routine or clerical in nature but requires the use of independent judgment;

Executes/implements general supervision of one or more subordinates

• Professional/Technical:

By reason of their positions or nature of work, are required

to assist or act in fiduciary (trust and confidence) manner to managerial employees and hence, are likewise privy to sensitive and highly confidential information.

Their work is technical in nature and requires a special course/ training /license

May or may not supervise other employees but typically leads teams/projects

• Managerial/Executive:

Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof.

They customarily and regularly direct the work of two or more employees therein.

They have the authority to hire or fire other employees of the lower rank, or their suggestions and recommendations as to the hiring and firing, and as to the promotion or any change of status of his employees are given particular weight.

Not entitled to overtime pay nor covered by Labor Code

Classification Plan – Academic Sector

• Academic

- Instructor ( I-IV)

- Associate Professor ( I-IV)

- Assistant Professor ( I-IV)

- Professor

• Non-Academic

- Guidance Counsellor

- Librarian

• Administrative/Office

- Messenger

- Administrative Associate

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Module Six: Trends in Job Evaluation

Trends – Movement away from complex job

evaluation systems ( in US) Fewer evaluation factors

Competency-based evaluation models

Market- based system

– Automated Job Descriptions/ Job Evaluation

– Single Classification Plan in the Academic Sector ( consider this)