this ppt lecture notes on compensation

1. .
Unit 2
Job Evaluation

2. What is a job?
 Job : Group of related activities and duties
: Made up of tasks
 Tasks
Basic elements of jobs
“what gets done”
 Positions: collections of jobs assigned to a person
 Job analysis- collecting necessary information
about a job

3. 2.1 : Definitions
 Job Evaluation is a process of analyzing and describing
positions, grouping them and determining their relative
value by comparing the duties of different positions in
terms of their different responsibilities and other
requirements.
 “an effort to determine the relative value of every job
in a plant to determine what the fair basic wage for
such a job should be.”
 (Kimball & Kimball)

4. 2.2 Objectives of Job Evaluation:
 To secure and maintain complete, accurate and
impersonal descriptions of each distinct job or
occupation in the entire organization;
 To provide a standard procedure for determining
the relative worth of each job in the
organization;
 To determine the rate of pay for each job which
is fair and equitable in relation to other jobs in
the organization.
 To ensure that like wages are paid to all qualified
employees for like work;
 To Promote a fair and accurate consideration of
all employees for advancement and transfer;

5. ….Objectives
 To provide a factual basis for the consideration of wage
rates for similar jobs in an industry and a community;
and
 To provide information for work organization,
employees’ selection, placement, training and
numerous other similar problems.

6. Job Evaluation Process
ObjectivesofJobEvaluation
JobAnalysis
JobDescription JobSpecification
JobevaluationProgramme
Wage/salarySurvey
EmployeeClassification

7. Job Description Vs. Job Specification
 Job Descriptions
 Is a written statement that describes the activities and
responsibilities of the job, as well as important features
of the job such as working conditions and safety
hazards.
 It is a written statement of functions, tasks,
accountabilities, working conditions, and competencies
for a particular job.
 It gives information about the scope of job activities,
major responsibilities and positioning of the job in the
organization.
 This information gives the worker, analyst, and
supervisor with a clear idea of what the worker must do
to meet the demand of the job.

8. Contents of job description:
There is no standard format for writing a job
description. However, most job descriptions contain
items such as :
 Job title /Job identification/Organization Position
 Location
 Job Summary:
 Job duties and responsibilities:
 Relation to other jobs:
 Hazards:
 Machine, tools and equipment
 Working Conditions
 Supervision given or received

9. Job Specification
 Summarizes the personal qualities, skills, and
background required for getting the job done;
 While job description describes the activities to
be done in the job, job specifications list the
KSAs and individual needs to perform the job
satisfactorily.
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10. SampleJobDescriptionforHumanResourceManager
 IdentificationSection:
• Position Title:HumanResourceManager
• Department:HumanResources EEOCClass:O/M
• Reportsto: President FLSAStatus: Exempt
 GeneralSummary:DirectsHRactivities ofthefirmto ensurecompliancewithlawsandpolicies,andassists
PresidentwithoverallHRplanning
 EssentialJob Functions:
1.Manages compensationandbenefitsprograms forallemployees,resolvescompensationandbenefitsquestions from
employees,andnegotiates with benefitscarriers(20%)
2.Ensurescompliancewithboth internalpoliciesandapplicablestate andfederalregulationsand laws,includingEEO,
OSHA,and FLSA(20%)
3.IdentifiesHRplanningissuesandsuggested approachestoPresidentand otherseniormanagers(15%)
4.Assists managersand supervisors tocreate,plan,andconducttrainingandvarious developmentprograms fornew
andexistingemployees(15%)
5.Recruitscandidatesforemploymentovertelephoneandinperson.Interviewsandselectsinternalandexternal
candidates foropenpositions (10%)
6.Reviewsandupdates jobdescriptions, assistedbydepartmentsupervisors, andcoordinatesperformanceappraisal
processto ensuretimelyreviewsarecompletedforallemployees(10%)
7.Administers various HRpoliciesandproceduresand helpsmanagersresolveemployeeperformanceandpolicyissues
(10%)

11. SampleJobSpecificationforHumanResourceManager
 Knowledge,Skills,andAbilities:
•Knowledge of HRpolicies, HRpractices,andHR-relatedlaws andregulations
•Knowledge of companyproductsandservicesandpolicies andprocedures
•Knowledge of managementprinciples andpractices
•Skill inoperating equipment,suchaspersonal computer, software,andIT systems
•Skill inoral andwritten communication
•Ability tocommunicatewithemployees andvarious businesscontactsina professional and
courteous manner
•Ability toorganize multiple work assignmentsand establishpriorities
•Ability tonegotiate withothersandresolve conflicts, particularly insensitivesituations
•Ability topayclose attentiontodetailandtoensureaccuracyof reports anddata
•Ability tomakesound decisions usingavailable information while maintaining
confidentiality
Ability tocreateateamenvironment andsustainemployee commitment
 EducationandExperience:Bachelor’s degreein HRmanagementorequivalent,plus 3–5
years’experience.

12. Process of JE
1. Collection of data through job analysis
2. Preparation of job description and job specification
to give a detailed account of the job
3. Selecting benchmark jobs (representative of the level
and type of jobs to be evaluated
4. Completing job grading where relative levels of
various jobs are determined according to the nature
of jobs
5. Pricing the jobs taking into consideration the internal
and external consistencies.

13. Job Evaluation Methods
 Non-analytical methods: Is methods in which whole
jobs are examined and compared without being
analyzed into their constituent parts or elements.
The comparison is based upon Job-job where
judgments are based on direct comparison between
one job and another job.
 Analytical Methods: Is methods in which jobs are
analyzed by reference to one or more criteria, factors
or elements.
The comparison is based upon Job-scale where the
judgments are made by comparing each job with a
set scale.

14. Non-analytical methods: Non-analytical methods include
the following techniques.
a) Ranking Method
b) Job Classification
c) Market Pricing
Ranking Method:
 It is the simplest method of job evaluation.
 In this method, jobs are arranged from highest to lowest,
in order of their value or merit to the organisation.
 Jobs can also be arranged according to the relative
difficulty in performing them.
 Jobs are usually ranked in each department and then the
department rankings are combined to develop an
organisational ranking.

15. Job classification
 According to this method, a predetermined number of
job groups or job classes are established and jobs are
assigned to these classifications.
 This method places groups of jobs into job classes or job
grades.
Following is a brief description of classification in an office:
 Class 1- Executives: Office manager, deputy office
manager, department supervisor, etc.
 Class 2- Skilled workers: Purchasing assistant, cashier,
receipts clerk, etc.
 Class 3- Semiskilled workers: Steno typists, machine
operators, switchboard operator, etc.
 lass 4- Semiskilled workers: file clerks, office boys, etc.

16. Market Pricing
 Market pricing is the process of assessing rules of pay
by reference to market rates – what similar
organizations pay for comparable jobs.
 Market pricing establishes external relativities and is
sometimes referred to as external benchmarking.
 Market pricing is based on the belief that it is always
easy to get hold of comprehensive and accurate
information on market rates.

17. a) Point Factor Rating(Point….weight…scale)
b) Factor Comparison Method.
Analytical Methods (Quantitative)

18.  This method is based on the breaking down of jobs
into factors or key elements.
 It is assumed that each of the factors will contribute
to job size and are a part of all the jobs to be
evaluated but to different degrees.
 Using numerical scales, points are allocated to job
under each factor heading according to the degree to
which it is present in the job.
 Separate factor scores are then added together to
give a total score which represents job size
Point Factor Rating

19. Point Method
• Identify Compensate-able Factors
e.g.
– Skill
– Responsibility
– Effort
– Environment
• Establish Degree Within each Factor (e.g. 1-9)
• Create a Point Manual
• Analyze each Job
• Assign Points
• Rank by Points

20. Factor:“Contacts”
This factor considers the requirement in the job for contacts inside and outside the company. Contacts
may involve giving and receiving information, influencing or negotiating. The nature and frequency of
contacts shouldbe considered, aswell as their effect on the company.
Level Particulars (degree of thefactor) Points
1 No contacts exceptwith immediate colleagues orsupervisor 10
2 Contacts are mainly internal and involve dealing with factual queries or exchange
of information
20
3 Contacts may be internal or external and typically require tact or discretion to
gaincooperation
30
4 Frequent internal / external contacts, of a sensitive nature requiring persuasive
ability to resolve non-routine issues
40
5 frequent internal / external contacts at senior level or on highly sensitive issues,
requiringadvanced negotiatingskills
50
6 Constant involvement with internal / external contacts at the highest level or
involvingnegotiation on difficult andcriticalissues
60

21. …. 2.5 Limitations of Job Evaluation:
.
 Job evaluation system takes a long time to be
adequately implemented and it not only requires
specialized and trained personnel but it may also be
costly.
 Rapid changes in technology and in the supply of and
demand for particular skills raise problems of
adjustment that may need further study.
 Evaluation of a job currently made on the basis of job
factors (such as skills, responsibilities, difficulties,
hardships, inconvenience, unpleasantness etc.) does not
reflect the value and worth of the job in future because
job factors fluctuate on account of changes in
technology, other relevant factors.

22. ….JEMETHODS..AM….Point Factor Rating.
 In particular, the process of job rating is to some extent
arbitrary because few of the factors and degrees can be
measured with great accuracy.
 Sufficient acceptance of a job evaluation plan and
general agreement on its essential features may not be
achieved.
 Trade unions often regard the method with suspicion
and in some cases with hostility. They fear that job
evaluation will do away with collective bargaining for
settlement of wages.