Transcript JOB DESCRIPTION - Home | The Evergreen State College

Exempt Pay Program Design
Position Evaluation is the
foundation of
Pay Program Design
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Job Evaluation Process
Position Description Statement
Job Responsibilities,KSA's and Qualifications

Position Evaluation
Job content and/or Market pay rate analysis

Job Value $
Pay rate & grade assignment
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Position Evaluation Goals

To establish an objective, orderly, and sequential
pay grade structure based on the value of job/s.

To ensure development of a pay structure that
provides for internal equity.

To assist in determining competitive pay rates.

To comply with Equal Pay Act and FLSA rules.
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What is Job Evaluation ?

Job Evaluation is a process for assessing the
value relationships between jobs.

Job Evaluation is a method (job content or market
evaluation) to determine the relative level of jobs.

Job Evaluation is a formal methodology for
setting wage rates and pay grades by a employer.
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Compensable Factors
 Compensable
Factors are
specific job content features,
and requirements common
to most jobs, such as
Responsibility and Skill.
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Universal Compensable
Factors

Universal Compensable Factors are
specified by the Equal Pay Act as :
» SKILL – Ability to do, knowledge, etc,
» EFFORT - measure of mental exertion
» RESPONSIBILITY – job scope
» WORKING CONDITIONS - physical
surroundings and hazards of a job
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Common Universal Factors
Used by Pay Programs

BASS
Skill
Responsibility
Accountability

HAY and PURVES
Know-How
Problem-Solving
Accountability
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Common Universal Factors
Used by Pay Programs

NEMA - NMTA
» Skill
» Effort
» Responsibility
» Job Conditions

EQUAL PAY ACT
» Skill
» Effort
» Responsibility
» Working
Conditions
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Common Universal Factors
Used by Pay Programs
Factor Evaluation System

Knowledge

Personal Contacts

Supervisory
Controls

Purpose of Contacts

Guidelines

Physical Demands

Complexity

Work Environment

Scope and Effect
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Compensable Factors Components
It is normal practice to classify these factors
into the three major categories below:



Universal Factors
Defined by Equal Pay Act.
Sub Factors of Universal Factors
key job content and requirement attributes of a
particular Universal factor defined more precisely.
Levels on a objective measurement scale to identify
the specific amount of a factor required for the job.
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Hay System Factors and
sub factors example
Know How: This factor describes
"Know-how is the sum total of knowledge and skill, however acquired,
needed for acceptable performance." - Hay Group
•Professional Skills
•Managerial
•Human Relations
Problem Solving:
Problem solving is the original, self-starting thinking required by the job
for analyzing, evaluating, creating, reasoning & arriving at and making
conclusions.
Thinking Challenge
Thinking Environment
Accountability:
The opportunity a job has to bring about results and the importance of
those results to the organization.
Freedom to Act
Impact
Magnitude
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Job Evaluation Methods


Whole Job
Ranking
Position
Classification /
Predetermined
Grading

Market Pricing

Point Factor and
Market Pricing

Point Factor
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Whole Job Ranking

Comparing the whole job by
determining the overall value of
specific jobs or classes as they
compare with one another.

Works best when comparing jobs in
the same occupation or the same
organizational unit when evaluators
are intimately familiar with all jobs
being ranked.
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WHOLE JOB RANKING

Whole Job Ranking Is The Quickest To
Perform Of All The Methods, But It Has Three
Significant Disadvantages:
» A lack of substantiation data to
justify the final results.
» It provides no yardstick for measuring the
relative value of jobs.
» The personalities of incumbents tend to
get in the way of the evaluators'
judgement.
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Classification System
Jobs are classified into an existing grade
structure hierarchy. Each level in the
grade structure has a description and
associated job titles. Each job is assigned
to the grade/category providing the
closest match to the job. To ensure equity
in job grading and wage rates, a common
set of job grading standards ( Factors)
and instructions are used to define each
job classification.
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Position Classification
Advantages
Simple.
The
grade definitions standard (factors) and
structure exists independent of the jobs. New
jobs can be classified more easily.
Disadvantages
Developing Classifications is time intensive.
The standard (factors) may have biases.
 Some jobs may appear to fit within
more than one grade/category.
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Market Pricing
Most organizations usually understand that they
must offer market based competitive pay rates in
order to attract and retain competent employees.
There are two basic methods to recognize
market wage rates.

Pure market pricing

Guide line Market pricing method
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Market Pricing
Pure Market Pricing Pay Survey

The organization develops brief narratives
that describe job activities and incumbent
requirements.

The organization conducts pay rate survey
of other organizations having employees
who perform similar work assignments in
the same labor market.

This is the least costly method....It is easy
to explain..…and judicially defensible.
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Market Pricing
Market Pricing Guide Line Method
This approach permits the influences of
internal equity to interact with existing
market rates when determining the rate of
pay for jobs of an organization.
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Market Pricing
Market Pricing Guide Line Method Steps

Step One:
» Establish a GUIDE LINE
SCALE of salary ranges that
includes a series of salary
grades and a minimum, midpoint, and maximum rate of
pay for each using a 5% midpoint differential.
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Market Pricing

Step Two:
» Develop realistic job descriptions
that include job scope data.
» Identify benchmark jobs. (40% to
60% of jobs)
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Market Pricing

Step Three:
» Use comprehensive market
pricing survey when matching
benchmark jobs to other
comparable employers jobs.
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Market Pricing

Step Four:
» Develop HORIZONAL GUIDE LINE
displays that relate to job evaluations
conducted in the third step.
» Two or more vertical guide line
displays to ensure internal equity
within the pay structure.
» Guideline Market pricing
requires costly software
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Market Pricing Tools
College
and University Professional
Association (CUPA)- Current system.
Customized
Salary Surveys of Peer Institutions
Performed by HR
Salary
data-on-demand software products
including CUPA & Economic Research Institute
BLS
Professional Occupation surveys
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Market Pricing
Advantages & Disadvantages
Advantages Include:
 Measure college pay rates against the pay
rates of similar organizations.
 Selects benchmark positions by level from
across the college for market pricing.
 Ensures pay structure based on external
market pay rates for equivalent positions.
Major Disadvantage:
 May under value jobs that are very
important to the organization.
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Point Factor
Position Evaluation
Point factoring evaluation systems
evaluate jobs against common factors (
Universal and sub factors). The job
content of each position is evaluated
against the selected factors and then
represented as a numeric value. These
values are then compared to a predefined salary structure (grades) to
determine the appropriate pay range
assignment.
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Point Factor
Position Evaluation Systems

Lott's Point Method

Benge's Factor Comparison

Hay's Profile Method

NEMA Method

Factor Evaluation System
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Point Method Factors
A Point Factor Method uses a set of
compensable factors to determine the
value of jobs. Each factor has given
numeric (point) values.Typically the
compensable factors may include the
major categories of:
 Skill –ability, knowledge
 Responsibilities – fiscal ,supervision
 Effort -mental
 Working Conditions
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Compensable Factors Points

The total points assigned compensable factors
are determined by the wage spread between the
highest and the lowest paid position within an
organization. The highest paid job is given the
most points for each factor. The spread in total
points between highest and lowest paid jobs is a
recognition of the full point range between
positions within the organization.
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Factor Point Score Differences

The compensable factor weights and
measurement scales determine job pointscore differences and thereby result in an
established structure of jobs with different
pay rates or ranges for each job.
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Point Determining Method
Factor
Column1
Column 2
Column 3
Order of
Ranking
Percentage of
Highest
Factor
Calculation
Weight of
Factor
Responsibility 100%
100/300
33%
Skill
80%
80/300
27%
Effort-mental
80%
70/300
27%
Work
Conditions
40%
40/300
13%
Totals
300 %
100%
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Calculating Total Points
Point Spread between highest and lowest paid
positions Ex. $100,000/$20,000 =5
 Thus, according to normalizing chart on previous
slide the highest paid position should receive 5
times more points than lowest paid position.
Ex $100,000 = 3000 total points divides as follows:
999 points for Responsibility
831 points for Skill
831 points for Effort-mental
399 points for Work Conditions

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Point Factoring Methods
Advantages
Statistically
assigns position to a salary band.
Legally Defendable Factors
Disadvantages
Requires
consultant services or costly software for
Regression Analysis to combine with market pricing.
The pay for each factor is based on rater judgments.
High training investment to develop a small team of job
raters to manage the tool.
Costly implementation and maintenance.
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Selecting A Job Evaluation Method
» The Job Evaluation method selected may
use either market data or job content factor
data to set up a pay range structure. Each
of these evaluation methods may be used
independently and still result in a equitable
pay system. The position evaluation
method selected may also use the more
complex and costly approach of combining
job content factor data with market pricing
data to create a equitable,objective and
uniform organizational pay structure.
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Job Evaluation Steps
The Fox Lawson consultant report has
recommended selection of a “simplified
classification system” which uses “broadly
defined classes”.
Step
one is to select compensable factors.
Step two is select “simplified” classification system
and job evaluation process using either
compensable factors and/or market pricing.
Step three is to select benchmark jobs for evaluation.
Step four is to construct pay grades based on the
evaluation of benchmark jobs.
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