See slides
Speakers
- ask better questions
- need to know what you want the compensation philosophy
- what is the purpose of the compensation plan?
- are we still doing this correct?
- questions this philosophy?
- ask hard problems, questions
- internet is not a good salary source
- Good communication and understand what your compensation philosophy is
- Keys:
- Jobs and hierarchy they brings
- skills and competencies they offer
- Documents and version control it.
- Subjective and Bias builtin
- Research the roles within the jobs.
Job Evaluation
systematically determining the relative worth of jobs to create job structure within an organisation
based on combination of job content, skills, values, organisation culture, external market
Decision:
- purpose
- single or multiple plans
- among alternative approaches
- involvement of relevant stakeholders
- evaluate usefulness
establish purpose
aligned if
- supports organisation strategy
- supports workflow
- fair to employees
- motivates behaviour toward organisation objectives.
single vs. multiple plans
- evaluation plans for different types of workflow
- number of job evaluation plans depends on how detailed it needs to be to make pay decisions
choices of job evaluation
simple ranking.
- order from highest to lowest based on relative values
- advantages: simple, fast, easy to understand and explain to employees; least expensive initially.
- disadvantages:
- ranking criteria is poorly defined → evaluations become biased
- evaluators must be knowledgeable about all jobs
- results are difficult to defend and costly solutions maybe be required.
| alternatives methods | description |
|---|---|
| Alternation | order descriptions alternately at each extreme, evaluators agree on which jobs are the most valuable |
| Paired comparison | compare each job with every other job, number of comparisons = n(n-1)/2 |
classification
- series of classes cover the range of jobs
- descriptions are labels which capture general nature of work
point method
- assignment of numeric score
- procedure results in a relative ordering of jobs based on the number of points that each job “scores”.
1. Job Analysis
- representative benchmark jobs is drawn for analysis
2. Determine Compensable Factors
- based on strategy and values of organisation
- based on the work performed
- acceptable to stakeholders affected by the resulting pay structure
challenges:
- small numbers
- unique criteria
3. Scale the Factors
- 4 to 8 degrees
4. Weigh the Factors
- of important
- weights reflect the relative importance of each Factors
- determined through an advisory committee (a priori judgement approach)
5 & 6. Communicate.
Who?
- employees
- consultants
- union representatives
Design process and Job structures
provides a hierarchy of work, or a job structure
Skill-based plans
- in the trade
- link pay to the depth or breath of skills
- pay individuals for all relevant skills → wage attach to person
types.
- depth
- based on knowledge of the person
- generalist/breadth
- increased by acquiring new knowledge
Purpose of skill-based
supports organisation’s strategy, workflow, fair to employees, and motivates behaviour
Outcomes
- well accepted by employees and provide strong motivation for individuals to increase new skills
- become increasingly expensive
- flexibility permits leaner staff
- success is determined by how well it aligns
Competency-based plans
-
faireness and motivations
-
skill-based, foundation for successful work
-
core competencies are often linked to the mission statement
-
competency set translates core → action
-
indicators are observable behaviour
Analysis
- core competencies are not unique for each company
- differs applies their competencies
- verify their possession of that competency
- no objective way to certifying competencies
- relatively few levels and wide differentials for increased levels
internal alignment reflected in structures
- purposed of job and person-based procedures is to design and manage a pay structure.
reliability and validity
- consultants
- improve reliability by using evaluators familiar with the work and trained in job evaluation.
- validity refers to degree the evaluation assesses relative job worth.
Acceptability
- formal appeals process → request and re-analysis or skills re-evaluation.
- employee attitude surveys assess perceptions of how useful evaluation is as a management tools.
bias.
To ensure bias-free evaluation:
- compensable factors and scales to include the content of jobs
- factor weights are consistently biased against jobs
- apply the plan as bias free a manner as feasible.