Chapter 7: Evaluating Jobs: The Job Evaluation Process

Chapter 7: Evaluating Jobs: The Job Evaluation Process

Overview

  • Purpose: Establishes a compensation strategy based on analysis of the organization and workforce.

  • Transition: Moving towards transforming the strategy into a system.

  • Future Chapters:

    • Chapters 7 to 10: Cover job evaluation, impact of the labor market, and individual performance.

    • Chapters 11 and 12: Focus on designing performance pay and indirect pay plans.

    • Chapter 13: Activating and evaluating the compensation system.

Learning Outcomes

  • Job Evaluation: Explain the purpose and main steps in the job evaluation process.

  • Job Analysis: Understand the process and key steps in job analysis.

  • Job Descriptions: Prepare useful job descriptions.

  • Job Evaluation Methods: Identify and describe the main methods of job evaluation.

  • Job Evaluation Process Management: Describe key issues in managing the job evaluation process.

  • Pay Equity: Understand the reasons for pay equity and the process for conforming to pay equity legislation.

Effective Job Evaluation

  • Valuing Work: How organizations value work, aiming to avoid overpaying or underpaying employees and ensuring internal and external equity.

  • Examples: Different roles at a grocery store may include Store Manager, Department Managers, Cashiers, etc.

Job Analysis

  • Definition: The process of collecting information that job descriptions are based upon.

    • Job Description: A summary of duties, responsibilities, and reporting relationships pertaining to a specific job.

    • Job Specifications: Employee qualifications necessary to successfully perform a given job.

Required Information for Job Analysis

  • Nature of Required Information:

    • Identifying the necessary data to understand the job and its requirements.

    • Accurate and up-to-date job descriptions are essential but rare, despite organization efforts.

Information Collection Principles

  • Templates and Best Practices: Use best practices when establishing templates for job information collection.

  • Detailed Job Description Example: Refer to Figure 7.1 for an example template.

Methods of Job Analysis

  • Observation: Watching employees in their roles.

  • Interviews: Conducting interviews with employees about their tasks.

  • Questionnaires: Surveys for information collection.

  • Functional Job Analysis: Analyzing jobs based on detailed job-related factors.

Identifying Job Families

  • Purpose: Organizing related jobs into clusters for administrative purposes.

  • Example of Job Families at a Chemical Plant:

    • Clerical jobs (clerks, secretaries)

    • Trades jobs (plumbers, electricians)

    • Technical jobs (lab technicians)

    • Management jobs (department managers)

Pitfalls in Job Analysis

  1. Analyzing the Jobholder vs. the Job:

    • Risk of personal performance affecting job analysis.

  2. Gender Bias: Potential biases in evaluating jobs.

  3. Technical Jargon: Hinders understanding of job duties.

  4. Oversimplification: Avoid oversimplifying ongoing dynamic jobs.

  5. Dynamic Nature of Jobs: Particularly relevant in high-involvement organizations.

Class Check-In Exercises

  • Identifying Processes: Recognizing the gathering of job-related data: job evaluation, job description, job specification, job analysis.

  • Job Analysis Method: Identifying methods used for gathering job-related information, such as time-and-motion studies.

Job Evaluation Methods

  1. Ranking: Jobs ranked by knowledgeable individuals.

  2. Paired Comparison: Each job is compared with every other job to establish ranking.

  3. Factor Comparison: Assigns pay levels based on job factors.

  4. Classification/Grading: Uses generic grade descriptions for classes of jobs.

  5. Point Method: Assigns points to jobs based on compensable factors.

Detailed Explanation of Job Evaluation Methods

  • Ranking: Participants rank jobs based on their worth to the organization.

  • Paired Comparison: Pairs jobs for comparison and records outcomes for ordering.

  • Classification/Grading: Defines job classes and uses descriptions for pay grade assignments.

  • Factor Comparison: More complex; assesses multiple factors and rates jobs based on these.

  • Statistical/Policy Capturing: Complicated method using questionnaires to gather detailed job information.

Point Method

  • Description: Widely utilized. Identifies compensable factors, weights them, and assigns point values to jobs based on these factors.

Conducting and Managing Job Evaluation Process

  1. Administration: Identify who conducts evaluations.

  2. Communication: Importance of communicating throughout the evaluation process.

  3. Application of Results: How results are integrated into compensation strategies.

  4. Appeal/Review Mechanisms: Creating systems for job evaluation reviews.

  5. Updating Evaluations: Regular updates as job needs change.

Updating Job Evaluations

  • Triggers for Update:

    • Significant changes in the job or organizational strategy.

    • Ineffectiveness of the job evaluation system.

    • Legislative requirements for updates.

Pay Equity in Federal Jurisdiction

  • Legislation: Effective January 1, 1988 in Ontario; proactive pay equity legislation introduced due to historical disparities.

  • Employers Covered: Federally regulated with 10+ employees, including various sectors.

Ontario Pay Equity Act Steps

  1. Determine applicable rules.

  2. Identify female/male job classes.

  3. Establish a body for conducting pay equity.

  4. Select a gender-neutral job comparison system (preferably point factor method).

  5. Collect job information via job analysis (typically through questionnaires).

  6. Compare jobs within the job classes.

  7. Check for permissible pay differences.

  8. Adjust compensation based on findings.

  9. Communicate outcomes of the pay equity plan.

  10. Maintain pay equity continuously.

Pay Equity Requirements

  • Job-to-job Method: Direct comparison of female to male job classes.

  • Proportional Value Method: Used when no direct comparator exists; extrapolates from similar classes.

  • Proxy Comparison Method: For public sector contexts with no applicable comparisons.

Permissible Differences in Pay Equity

  • Definition: Differences in pay not seen as inequitable due to allowable circumstances like seniority.

Adjusting and Communicating Pay Equity

  • Adjusting Compensation: Aim to achieve equity without lowering male comparator job pay levels.

  • Communication: Essential for employees to understand the pay equity process and outcomes.

Maintaining Pay Equity

  • Ongoing Responsibility: Employers must actively ensure pay equity is preserved over time and adjusts as needed due to organizational changes.