Job Evaluation Point Method

Job Evaluation
Kenneth M. York School of Business Administration Oakland University
Job Evaluation
The process of determining how much a job should be paid, balancing two goals
Internal Equity: Paying different jobs differently, based on what the job entails External Competitiveness: Paying satisfactory performers what the market is paying
ORG434: Advanced HRM
Job Evaluation: The Point Method

Job Analysis to determine
The tasks performed in a job
The Job Description
The knowledge, skills, and abilities needed to perform the job

The Job Specification

Example: Software Engineer
Job Description
The Software Engineer designs, develops, tests and maintains one or more of our products or internal applications. The software engineer works as a member of an engineering team developing, designing, and maintaining one or more of our products or internal applications. This position reports to the appropriate Project Manager.
Job Specification
Bachelor's or undergraduate degree in Computer Science, Information Systems, Electrical Engineering or equivalent experience. Masters or graduate degree is desirable. Understand Intranet and Internet technologies: ORG434: Advanced http, firewall. 4
HRM

Develop a list of compensable factors
A set of standards the organization uses to distinguish among jobs for pay purposes Examples of commonly used compensable factors:

Degree of responsibility, supervision Knowledge needed to perform the job Discretion in performing the job, independent judgment Job conditions Effort Hazard Consequence of error
5

Define the degrees of each factor
Judgment and Decision Making: This factor identifies the extent to which the job requires judgment and responsibility in the making of decisions.The importance of the decisions and the extent to which standard policies and procedures provide guidance in decision making will be considered. 1st Degree: Work requires decision making involving the analysis of the facts of a situation and the determination of what actions should be taken within the limits of standard procedures; only unusual or seldom recurring situations require referral. Judgment could affect the work of others or cause minor inconvenience. Typical errors are generally confined to a single team or phase of operations. University of
Wisconsin-Oshkosh

3rd Degree: In consultation with team members decide specific work projects to perform, and proceed to plan, coordinate, and commit resources required to accomplish work; associates develop or establish procedures or policies. Judgment requires accuracy because errors could potentially result in inaccurate reports, incomplete or misleading information, unsound recommendations, or incorrect decisions. Consequences could adversely affect operations or services causing significant losses of time, resources and potentially have a long term impact on a team. 6th Degree: Assists board in the development of policies, general procedures and corporate goals. Errors in judgment could jeopardize the viability of the company.
ORG434: Advanced HRM 7

Create a matrix of points for the degrees of each factor
Judgment and Decision Making:
1st degree = 50 points 2nd degree = 100 points 3rd degree = 225 points 4th degree = 350 points 5th degree = 500 points 6th degree = 700 points
Communication, Work Environment, Coaching, Innovation, Knowledge Education - Experience

ORG434: Advanced HRM 8

Factors - Degrees
Job Knowledge Judgment & Decision Making Independent judgment Accountability Working conditions Mental
1st
2nd
3rd
4th
5th
6th
25 100 10 33 25 100 20 65 5 15 20 42
175 250 55 78 100 175 250 110 155 200 35 69 50 96 123 150
9

Evaluate benchmark jobs to determine Job Evaluation Point Totals
Benefits supervisor = 700 Training material development specialist = 650 Job evaluation specialist = 460 Compensation manager = 920
10

Collect salary survey data on benchmark jobs
Benefits supervisor = $60,393 Training material development specialist = $58,403 Job evaluation specialist = $43,155 Compensation manager = $79,958
11

Do a regression analysis to find the pay line for the benchmark jobs
Dependent variable is salary survey data Independent variable is job evaluation point total Calculate salaries for benchmark and other jobs using the regression equation
Salary = 79.67*JETotal + 6101.09 Example: Compensation Director = 79.67*1120 + 6101.09 = $95,333
12

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Job Evaluation

Kenneth M. York School of Business Administration Oakland University

ORG434: Advanced HRM

Job Evaluation: The Point Method

The knowledge, skills, and abilities needed to perform the job

ORG434: Advanced HRM

Job Evaluation: The Point Method

Job Evaluation: The Point Method

Job Evaluation: The Point Method

Job Evaluation: The Point Method

Job Evaluation: The Point Method

Communication, Work Environment, Coaching, Innovation, Knowledge Education - Experience

Job Evaluation: The Point Method

Job Evaluation: The Point Method

ORG434: Advanced HRM

Job Evaluation: The Point Method

ORG434: Advanced HRM

Job Evaluation: The Point Method

ORG434: Advanced HRM

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