7 joban+eval
TRANSCRIPT
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Chapter Seven
Building InternallyConsistentCompensationSystems
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Parcel Plus Case
Company strategy and strategy change
Current employees:- 8 customer service reps (5.50 - $6.50/hour)
- Asst. manager ($8.50) Manager ($10)
New position: Driver/customer service rep Applicant thinks $6.50 is too low
Manager, customer service reps object
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Internal Consistency
Establishes equal pay for work of equalworth and acceptable pay differentials forwork of unequal worth
Includes fairness of procedures used to
establish pay structure, organizationaldesign, and flow of work
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Goals of Internal Consistency
Design procedures and establish pay structures
that:
Assist to achieve organizational objectives
Are acceptable to employees and managers
Comply with laws and regulations
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Pay Structure
Array of pay rates for different work or skills
within a single organization: levels, differentials,criteria.
Number of levels
Pay differentials among levels
Criteria used to support the structure
Egalitarian vs. Hierarchical
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Consequences of Structures
Undertake training
Increase experience Reduce turnover
Facilitate career progression
Facilitate performance Reduce pay-related grievances
Reduce pay-related work stoppages
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Exhibit 7-1 Internally Consistent Compensation
Structure
AverageAnnualS
alary
$60,000
$50,000
$40,000
$30,000
$20,000
Degree of Responsibility
Benefits Counselor I($20,000)
Benefits Counselor II($26,000)
Benefits Counselor III($40,000)
Manager of Benefits($58,000)
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Exhibit 7-1 Internally Consistent Compensation
Structure
Benefits Counselor I
Provides basic counseling services to employees and assistance
to higher-level personnel in more-complex benefits activities.Works under general supervision of higher-level counselors orother personnel.
Benefits Counselor II
Provides skilled counseling services to employees concerningspecialized benefits programs or complex areas of otherprograms. Also completes special projects or carries outassigned phases of the benefits counseling service operations.Works under general supervision from Benefits Counselor IIIs orother personnel.
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Benefits Counselor III
Coordinates the daily activities of an employee benefits
counseling service and supervises its staff. Works underdirection from higher-level personnel.
Manager of Benefits
Responsible for managing the entire benefits function fromevaluating benefits programs to ensuring that BenefitsCounselors are adequately trained. Reports to the Director ofCompensation and Benefits.
Exhibit 7-1 Internally Consistent Compensation
Structure
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Job Analysis
n The systematic process of collecting
relevant, work-related information relatedto the nature of a specific job.
n Why?
Internal consistency
Compensation
Other reasons
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Job Analysis - What Info?
n For compensation: INFO TO DECIDE VALUE
n Job info: to ID, define, describe
n Job title, importance, place in organization
n Task or work data
n Methods and techniques
n Products, services that result
n Worker data
n Behavioral data
n Abilities data
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Job Analysis - Formats
n Standardized
n Functional Job Analysis Data, people, things
Methods and techniques employed
Materials, products, servicesn Position Analysis Questionnaire
Info input, mental processes, work output,relationships with others, job context, job
characteristics, general dimensions
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Job Analysis - Formats
n Non-standardized
n Task Lists or Inventories
Lists of tasks
Frequency and importance
Usually self-report
n Abilities data
Psychomotor
Physical proficiency abilities
Cognitive abilities
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Job Analysis - How?
n Questionnaire
n Checklistn Diary
n Observation
n Activity samplingn Activity matrix
n Critical incidents
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Job Description
n Summary of job analysis
Job title, description, purpose
Job tasks, responsibilities, duties
Essential functions, non-essential functions
n Includes: Job Specifications (KSAOs)
Knowledge, skills, abilities, other qualificationsnecessary for the job
Used to determine entry level skills
Minimum for compensation purposes
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Exhibit 7-2Units of Analysis in the Job Analysis Process (1of 3)
1. An element is the smallest step into which it is practical tosubdivide any work activity without analyzing separate motions,
movements, and mental processes involved. Inserting a diskette intofloppy disk drive is an example of a job element.
2. A task is one or more elements and is one of the distinct activitiesthat constitute logical and necessary steps in the performance ofwork by the worker. A task is created whenever human effort,
physical or mental, is exerted to accomplish a specific purpose.Keyboarding text into memo format represents a job task.
Source: US Dept. of Labor, The revised handbook for analyzing jobs(Washington, DC: US
Government Printing Office, 1991).
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Exhibit 7-2Units of Analysis in the Job Analysis Process (2
of 3)
3. A position is a collection of tasks constituting the total workassignment of a single worker. There are as many positions as there
are workers. John Smiths position in the company is clerk typist. Histasks, which include keyboarding text into memo format, running aspell check on the text, and printing the text on company letterhead,combine to represent John Smiths position.
4. A job is a group of positions within a company that are identical
with respect to their major or significant tasks and sufficiently alike tojustify their being covered by a single analysis. There may be one ormany persons employed in the same job. For example, Bob Arnold,John Smith, and Jason Colbert are clerk typists. With minorvariations, they essentially perform the same tasks.
Source: US Dept. of Labor, The revised handbook for analyzing jobs(Washington, DC: USGovernment Printing Office, 1991).
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Exhibit 7-2
Units of Analysis in the Job Analysis Process (3 of 3)
5. A job family is a group of two or more jobs that call for either similarworker characteristics or similar work tasks. File clerk, clerk typist, and
administrative clerk represent a clerical job family because each jobmainly requires employees to perform clerical tasks.
6. An occupation is a group of jobs, found at more than oneestablishment, in which a common set of tasks are performed or arerelated in terms of similar objectives, methodologies, materials,products, worker actions, or worker characteristics. File clerk, clerk
typist, administrative clerk, staff secretary, and administrativesecretary represent an office support occupation. Compensationanalyst, training and development specialist, recruiter, and benefitscounselor represent jobs from the human resources managementoccupation.
Source: US Dept. of Labor, The revised handbook for analyzing jobs(Washington, DC: USGovernment Printing Office, 1991).
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Exhibit 7-5EEOC Interpretive Guidelines for Essential Job
Functions under the Americans with Disabilities Act
The reason the position exists is to perform the function.
The function is essential or possibly essential. If other
employees are available to perform the function, the functionprobably is not essential.
A high degree of expertise or skill is required to perform thefunction.
The function is probably essential; and,
Whether a particular job function is essential is a determinationthat must be made on a case-by-case basis and should beaddressed during job analysis. Any job functions that are notessential are determined to be marginal. Marginal job functionscould be traded to another position or not done at all.
Source: From the text of the Americans with Disabilities Act, Federal Register 35734 (July 26, 1991).
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Exhibit 7-6
Department of Labor Worker Functions
REF NO.
012345
6
DATA
SynthesizingCoordinatingAnalyzingCompilingComputingCopying
Comparing
REF NO.
012345
6
78
PEOPLE
MentoringNegotiatingInstructingSupervisingDivertingPersuading
Speaking-signalingServingTaking
instructions-helping
REF NO.
01
2
3
456
7
THINGS
Setting upPrecision
workingOperating-
controllingDriving-
operatingManipulatingTendingFeeding-
offbearingHandling
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Exhibit 7-11
Department of Labor Aptitudes
Source: U.S. Dept. of Labor, The revised handbook for analyzing jobs(Washington, D.C.: U.S.Government Printing Office, 1991).
G General learning ability
V Verbal aptitudeN Numerical aptitudeS Spatial aptitudeP Form perceptionQ Clerical perceptionK Motor coordinationF Finger dexterityM Manual dexterityE Eye-hand-foot coordinationC Color discrimination
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Exhibit 7-18
Characteristics of Benchmark Jobs
The contents are well known, relatively stable over time, andagreed upon by the employees involved.
The jobs are common across a number of different employers.
The jobs represent the entire range of jobs that are beingevaluated within a company.
The jobs are generally accepted in the labor market for the
purposes of setting pay levels.
Source: G.T. Milkovich and J.M. Newman, Compensation 5th ed. (Homewood, IL: Richard D. Irwin, 1996).
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Exhibit 7-21Federal Government Factor Evaluation System
(1 of 2)
1. Knowledge required by the position
a. Nature or kind of knowledge and skills needed
b. How the skills and knowledge are used in doing the work
2. Supervisory controls
a. How the work is assigned
b. The employees responsibility for carrying out the work
c. How the work is reviewed
3. Guidelines
a. The nature of guidelines for performing the work
b. The judgment needed to apply the guidelines or developnew guides
Source: US Civil Service Commission, Instructions for the factor evaluation system( Washington,
D.C.: US Government Printing Office, 1977).
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Exhibit 7-21Federal Government Factor Evaluation System
(2 of 2)
4. Complexity
a. The nature of the assignment
b. The difficulty in identifying what needs to be done c. The difficulty and originality involved in performing the work
5. Scope and effect
a. The purpose of the work
b. The impact of the work product or service
6. Personal contacts
7. Purpose of contacts
8. Physical demands
9. Work environmentSource: US Civil Service Commission, Instructions for the factor evaluation system( Washington,
D.C.: US Government Printing Office, 1977).
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Exhibit 7-4FLSA Exemption Criteria for Executive, Administrative,
and Professional Employees (1 of 2)
Executive Employees
Primary duties include managing the organization
Regularly supervise the work of two or more full-time employees
Authority to hire, promote, and discharge employees
Regularly use discretion as part of typical work duties
Devote at least 80 percent of work time to fulfilling the previousactivities
Source: 29 Code of Federal Regulations, Sec. 541.3 29; Sec. 541.1.
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Exhibit 7-4FLSA Exemption Criteria for Executive, Administrative,
and Professional Employees (2 of 2)
Administrative Employees
Perform non-manual work directly related to management
operations Regularly use discretion beyond clerical duties
Perform specialized or technical work, or perform specialassignments with only general supervision
Devote at least 80 percent of work time to fulfilling the previousactivities
Professional Employees Primary work requires advanced knowledge in a field of science or
learning, including work that requires regular use of discretion andindependent judgment, or
Primary work requires inventiveness, imagination, or talent in arecognized field or artistic endeavor
Source: 29 Code of Federal Regulations, Sec. 541.3 29; Sec. 541.1.
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JOB EVALUATION
That part of a compensation system where a
firm determines the relative value of one job
compared to another
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Steps in Job Evaluation
l Preliminary Planning
l Select Method
- Point Plan - Classification -Market pricing
- Ranking - Knowledge/skill-based plan
l Develop Planl Implement Plan - Evaluate Jobs
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Point Method
Parts-of-job technique
Uses Compensable Factors
Those aspects of job we plan to pay for
Choose and weight compensable factors tosuit jobs, organization, and strategy
Points assigned determine value of job
Example of one completed factor:
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Example Job Factor
Education: Measures the basic trades, training, orknowledge, or scholastic contact essential as
background or training preliminar to learning the jobduties. This job knowledge or background may havebeen acquired either by formal education or by training on
jobs of lesser degree or by combination of theseapproaches.
Total points = 200
Level 1 50 Technical degree of two years
Level 2 100 Bachelor of Science degree
Level 3 150 Masters degree
Level 4 200 Ph.D.
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Point Method Steps
1. Choose and define compensable factors
2. Build levels within factors--definitions, anchors 3. Determine total points for plan
4. Weight and assign points to factors by theirimportance.
5. Determine points for levels in factors
6. Apply to each job, add up points
7. Array jobs according to total points
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Examples of
Compensable Factors
Accountability
Communication
Contacts:Internal, External
Decision Making
Effort Required
Experience Hazards
Impact onCompanys
Objectives
l Initiative &Ingenuity
l Job Complexity
l Knowledge
l Latitude
l Mental Demandsl Multinational
Responsibilities
l No. Subordinates
l Physical Demand
l Problem solving
l Responsibility formaterial, product,equipment
l Specialized Skills
l Teamwork reqdl Type of
supervision
l Visual Demands
l Working
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Other Job Evaluation Types
Classificationu Ranking
u Market Pricing u Knowledge-based plan
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Ranking
Whole job technique
Rank jobs high to low
Easy, inexpensive, informal
Effective when: few, similar jobs
Popular with small companies
Subjective, non-specific
May be hard to defend
Simple, Alternative, Paired
Comparison
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Classification
Whole job technique
Slot jobs into labeled classes Classify jobs by similarity to prototypical/benchmark job,
label, and factor evaluation
Common in public sector
Used for wide variety of dissimilar jobs
Inexpensive, simple, flexible
Difficult to build classes, generic
classes, vague descriptions
Difficult to justify, lawsuits
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Job Classification Schedule
GS 9 Includes all classes of positions the duties of which are
(1) to perform, under general supervision, very difficult andresponsible work along special technical supervisory, or administrative
experience which has (A) demonstrated capacity for soundindependent work, (B) thorough and fundamental knowledge of aspecial and complex subject matter, or of the professional, art, orscience involved, and (C) considerable latitude for the exercise ofindependent judgment; (2) with considerable latitude for the exerciseof independent judgment, to perform moderately difficult work
requiring (A)...College degree... (B)...additional
training or experience...; or (3) to perform other work
of equal importance, difficulty, and responsibility,
and requiring comparable qualifications.
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Market Pricing
Determines market rate for each job
Pays market rate Ignores internal consistency in favor of
external competitiveness
Rates may be unrelated to relative value ofskills, responsibility, value within the firm
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Person-Based Evaluation
Knowledge/Skill Based Pay
Pay based on knowledge or skill, not the job performed
Employee carries the wage, regardless of the tasksperformed
Pay increases are linked to knowledge/skills, not promotions
Assess and values skills, not jobs
Advantages include flexibility, reduced work force Disadvantages include topping out, pay unrelated to work
performed
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KBP--Multi-Skill System
$7.00 $7.35 $7.70 $8.05
Base Rate Level 2
RateLevel 3
Rate
Level 4
Rate
Filter
Assembly
Filter
Assembly
Filter
Assembly
Filter
AssemblyMaterial
Handling
Material
Handling
Material
handling
Final assembly Final assembly
Polish/QC
Mastery of 1
job
Mastery of 2
jobs
Mastery of 3
jobs
Mastery of 4
jobs
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KBP--Increased Knowledge Systems:$7.00 $7.35 $7.70 $8.05
Base Rate Level 2
RateLevel 3
Rate
Level 4
Rate
Safety/
Housekeeping
Safety/
Housekeeping
Safety/
Housekeeping
Safety/
Housekeeping
PreventiveMaintenance
PreventiveMaintenance
PreventiveMaintenance
Product
Knowledge
Product
Knowledge
SPC
1Job Function+1 know. cell
1 Job Function+3 know. cells
1 Job Function+know. cells
1 Job Function+2 know. cells
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Borg Warner Auto Assembly Classifications
nChain measurer
nChain checker
nUltrasonic tester
nInspect/repair
nChain cleaner/oiler
nChain Packer
nRiveter
nAssembler hand machine
nAuto assembler
nCell Operator C
nCell Operator B
CURRENT FUTURE