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Module Objectives

Readings

Activities and Evaluations

Job Based Structures: Job Evaluation

The focus of Job-Based Pay Structures: Job Evaluation is the process of determining the relative worth of
jobs and creates the foundation for the pay structure.

1. How to Determine what to value in a Job;

2. How to Quantify this Value;

3. How to Translate the Value into Job Structure (Hierarchy of All Jobs)

Defining Job Evaluation: Content, Value, External Market Links

Job Content: Refers to all the skills required for the job, its duties and responsibilities.

Job Value: Refers to the relative contribution of the job to the organization’s goals.

Link to External Market: If the skills required to do the job content demand high wages in the market,
then skill would be a useful way to distinguish between jobs in the evaluation.

Differing Perspectives on Job Evaluation

Researchers have their own perspectives on job evaluation; if job value can be quantified then job
evaluation also takes on measurement characteristics such as objective, numerical, documented and
reliable.

How To: Major Decisions

1. Establish the purpose of evaluation

Job evaluation:

 Supports the organization’s strategy by including what it is about work that adds value
contributes to the organization’s objectives.

 Supports the workflow by integrating each job’s pay with its relative contribution to the
organization.
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 Can reduce disputes and grievances over pay differences that decrease the role that chance,
favouritism and bias may play in setting pay.

 Must befair to employees.

2. Single vs Multiple Plans

A single plan uses the same factors to evaluate all job families across the organization.

Multiple plans use different evaluation plans for different job families (ie. clerical vs management vs
production).

3. Three Alternate Job Evaluation Approaches-Ranking, Classification, Point Method

Ranking is a job evaluation method that ranks jobs from highest to lowest based on a global definition of
value. There are two common methods: Alternation Ranking and Paired Comparison Methods.

The Alternation Ranking method ranks the highest and lowest jobs first whereas in the Compared
Comparison Method lists all jobs across columns and down rows of a matrix and compares two jobs in
each cell and determines which job is of greater value. Then jobs are ranked based on the total number
of times each job is ranked of being of greater value.

Classification methods are widely used in the public sector and based on job class descriptions into
which jobs can be categorized. General class descriptions are created and benchmarked jobs are slotted
into each class. Then the written job descriptions are compared to the class description, which are
anchored with the benchmark jobs.

Benchmark Jobs have contents that are well known and relatively stable over time; the job is common
across a number of different employers; it is not unique to a particular employer. Typically a job
evaluation plan is developed using benchmark jobs, and then the plan is applied to the remaining non-
benchmark jobs.

Point Method Plans (Recommended By Pay Equity) all have the following common characteristics:

1. Compensable factors

2. Numerically scaled factor degrees

3. Weights that reflect the relative importance of each factor

The point method assigns a number of points to each job based on compensable factors that are
numerically scaled and weighed. The sum of the points for each job determines its position in the job
structure.

Six Steps in the Design of a Point Plan

1. Conduct Job Analysis

A good job analysis is essential to job evaluation and the point method.

2. Determine Compensable Factors

Compensable Factors are characteristics in the work environment that the organization values that help
it pursue its strategy and achieve its objectives. Factors are based on the work itself, strategy and values
of the organization and acceptable to the stakeholders.

 Are based on the strategy and values of the organization: jobs that align more closely to this are
evaluated more highly.

 Factors based on the work performed implies that the factors reflect the work performed in the
organization

 Acceptable to the stakeholders reflects that all are involved in the process

Factors from existing plans demonstrate four generic groups: skills, effort, responsibility and working
conditions.

3. Scale the Factors

Scales within the factors need to be enough degrees to adequately distinguish jobs but not so many that
it is difficult to determine which degree is appropriate for a given job.

4. Weigh the Factors According to Importance

Weights reflect the importance of that to the organization and can be done either by committee
judgement or statistical analysis. Factor weights are assigned to each factor to reflect differences in
importance attached to each factor by the employer.

Criterion Pay Structure: The structure may be chosen based on current rates paid for benchmark jobs,
market rates for benchmark jobs, rates for predominantly male jobs or union negotiated rates. The
Criterion Pay Structure step is key as the weights are based on it.

5. Communicate the Plan and Train Users

A job evaluation manual should be prepared for use by employees and managers charged with the
responsibility to implement job evaluation (usually a committee). Users must be trained to use the
manual.

6. Apply to Non-benchmark jobs

Finally, it is necessary to combine factor scales and weights to translate them to actual job points. This is
done by dividing maximum points for the system among the factors according to their weights and each
degree of a factor is given an equal number of points based on the points for that factor.

Involvement: Those involved should be those who require relevant information and can commit a high
degree of involvement in the assessment of the evaluation and structures.

Evaluation Usefulness of Results: The Design Process Matters. Make sure you attend to the fairness of
the overall design and the approach chosen.

Appeals/Review Procedures: No matter the process, some jobs are evaluated incorrectly; a review
process to handle such cases and to help ensure procedural justice (fairness) is required.
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Additional Resources

 Korn Ferry Hay Group: Job Evaluation

 Stevenson Kellogg: Management Counselling

 HRReporter: How to recognize, avoid errors in the job evaluation rating process

Summary

1. Job Evaluation is the process of determining and quantifying the value of jobs. It can

1. Determine the innate value of jobs

2. Determine the relative value of jobs

3. It is not possible to value jobs without external market information

4. Job evaluation is dependent on objective measurement instruments

5. Job evaluation should be conducted through a process of negotiation

2. Ranking is a process of job evaluation that puts the jobs in order from the highest to lowest
using either the alternation ranking or paired comparison ranking systems.

3. The classification system is used primarily in the public sector and uses class descriptions to
classify jobs. Benchmark jobs are used as part of the class descriptions for clarification.

4. There are six steps in the point system of job evaluation and they are:

1. Conduct Job Analysis;

2. Determine compensable factors

3. Scale the factors

4. Weight the factors and assign points

5. Communicate the plan

6. Apply the plan to non-benchmark jobs

5. There are three common characteristics of point plans:

1. Compensable factors;

2. Numerically scaled factor degree levels; and

3. Weights reflecting the importance of each factor. Committees or teams should be