CHAPTER 5 EVALUATING WORK: JOB EVALUATION
Overview of Chapter 5
This chapter describes the process, techniques, and methods used to evaluate jobs to build a jobbased internal pay structure. The focus is on what to value in jobs, how to assess that value, and how to translate it into a job-based structure. Job evaluation is a process for determining the relative value of jobs. The concept and varying perspectives of job evaluation are discussed. Next, the role of job evaluation in determining the internal structure is described by focusing on the major decisions involved in the job evaluation process. These decisions are: (1) establish the purpose of evaluation; (2) decide whether to use single or multiple plans; (3) choose among alternative methods; (4) obtain involvement of relevant stakeholders; and (5) evaluate the usefulness of the results. The most used methods of job evaluation – ranking, classification, and point method – are described, along with their strengths and weaknesses. The point method, the most commonly used job evaluation approach, is discussed in depth. Six (6) generic steps used to design a point method of job evaluation are provided. The roles, responsibilities, and involvement of the key stakeholders are highlighted. The outcome of the job analysis-job description-job evaluation process is a job structure, a hierarchy of work. This hierarchy translates an organization’s internal alignment policy into practice. The relevance of job evaluation in a world where the nature of work is rapidly changing is challenged. Over time, job evaluation has evolved into many different forms and methods. Consequently, wide variations exist in its use and how it is used. Numerous perceptions, both positive and negative, of the role of job evaluation in the current global environment exist. Regardless how job evaluation is designed, its ultimate use is to help design and manage a workrelated, business-focused, and agreed-upon pay structure.
Lecture Outline: Overview of Major Topics
I. Job-Based Structures: Job Evaluation II. Defining Job Evaluation: Content, Value, and External Market Links III. How To: Major Decisions IV. Ranking V. Classification VI. Point Method VII. Who Should Be Involved? VIII. The Final Result: Structure IX. Balancing Chaos and Control
Lecture Notes: Summary of Key Chapter Points
I. Job-Based Structures: Job Evaluation A. The process and techniques used to build a job-based internal structure is the focus of this chapter. 1. Job evaluation is a process for determining the relative value of jobs. 2. Issues include: what to value in the jobs, how to assess that value, and how to translate it into a job-based structure. Definition: Job evaluation is the process of systematically determining the relative worth of jobs to create a job structure for the organization. The evaluation is based on a combination of job content, skills required, organizational culture, and the external market. This potential to blend organizational forces and external market forces is both a strength and a challenge of job evaluation. II. Defining Job Evaluation: Content, Value, And External Market Links A. Content and Value. 1. Perspectives differ on whether job evaluation is based on job content or job value. a. Internal alignment based on content orders jobs on the basis of the skills required for the job, its duties, and responsibilities. b. A structure based on job value orders jobs on the basis of the relative contribution of the skills, duties, and responsibilities of each job to the organization’s goals. 2. Job content matters, but it is not the only basis for pay. 3. Job value may also include the job’s value in the external market (exchange value). 4. In addition, the value added by the same work may be more (or less) in one organization than in another. 5. There is not necessarily a one-to-one correspondence between internal job value and pay rates. B. Linking Content with the External Market. 1....
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