--- date: '2024-01-31' description: job evaluation methods including point method, compensable factors, skill-based and competency-based plans for determining relative job worth. id: Job-based Pay structures and Job Evaluation modified: 2026-06-05 15:08:37 GMT-04:00 tags: - commerce4be3 title: Job-based Pay structures and Job Evaluation created: '2024-01-31' published: '2024-01-31' pageLayout: default slug: thoughts/university/twenty-three-twenty-four/commerce-4be3/Job-based-Pay-structures-and-Job-Evaluation permalink: https://aarnphm.xyz/thoughts/university/twenty-three-twenty-four/commerce-4be3/Job-based-Pay-structures-and-Job-Evaluation.md generator: quartz: v4.6.0 hostedProvider: Cloudflare baseUrl: aarnphm.xyz full: https://aarnphm.xyz/llms-full.txt --- See [[thoughts/university/twenty-three-twenty-four/commerce-4be3/Job-based Pay Structures and Job Evaluation.pdf|slides]] ## Speakers - ask better questions - need to know what you want the compensation philosophy - what is the purpose of the compensation plan? - are we still doing this correct? - questions this philosophy? - ask hard problems, questions - internet is not a good salary source - Good communication and understand what your compensation philosophy is - Keys: - Jobs and hierarchy they brings - skills and competencies they offer - Documents and version control it. - Subjective and Bias builtin - Research the roles within the jobs. ## Job Evaluation > systematically determining the relative worth of jobs to create job structure within an organisation > based on combination of job content, skills, values, organisation culture, external market Decision: - purpose - single or multiple plans - among alternative approaches - involvement of relevant stakeholders - evaluate usefulness ## establish purpose aligned if - supports organisation strategy - supports workflow - fair to employees - motivates behaviour toward organisation objectives. ## single vs. multiple plans - evaluation plans for different types of workflow - number of job evaluation plans _depends_ on how detailed it needs to be to make pay decisions ## choices of job evaluation ### simple ranking. - order from highest to lowest based on relative values - advantages: simple, fast, easy to understand and explain to employees; least expensive initially. - disadvantages: - ranking criteria is poorly defined → evaluations become biased - evaluators must be knowledgeable about all jobs - results are difficult to defend and costly solutions maybe be required. | alternatives methods | description | | -------------------- | ---------------------------------------------------------------------------------------------------- | | Alternation | order descriptions alternately at each extreme, evaluators agree on which jobs are the most valuable | | Paired comparison | compare each job with every other job, number of comparisons = n(n-1)/2 | ### classification - series of classes cover the range of jobs - descriptions are labels which capture general nature of work ## point method - assignment of numeric score - procedure results in a relative ordering of jobs based on the number of points that each job “scores”. ### 1. Job Analysis - representative benchmark jobs is drawn for analysis ### 2. Determine Compensable Factors - based on strategy and values of organisation - based on the work performed - acceptable to stakeholders affected by the resulting pay structure challenges: - small numbers - unique criteria ### 3. Scale the Factors - 4 to 8 degrees ### 4. Weigh the Factors - of important - weights reflect the relative importance of each Factors - determined through an advisory committee (a priori judgement approach) ### 5 & 6. Communicate. Who? - employees - consultants - union representatives ### Design process and Job structures provides a hierarchy of work, or a job structure [[thoughts/university/twenty-three-twenty-four/commerce-4be3/Job description exercise|exercise]] ## Skill-based plans - in the trade - link pay to the depth or breath of skills - pay individuals for all relevant skills → wage attach to person ### types. 1. depth - based on knowledge of the person 2. generalist/breadth - increased by acquiring new knowledge > \[!tip\] Purpose of skill-based > > supports organisation’s strategy, workflow, fair to employees, and motivates behaviour ### Outcomes - well accepted by employees and provide strong motivation for individuals to increase new skills - become increasingly expensive - flexibility permits leaner staff - success is determined by how well it aligns ## Competency-based plans - faireness and motivations - skill-based, foundation for successful work - core competencies are often linked to the mission statement - competency set translates core → action - indicators are observable behaviour ### Analysis - core competencies are not unique for each company - differs applies their competencies - verify their possession of that competency - no objective way to certifying competencies - relatively few levels and wide differentials for increased levels ## internal alignment reflected in structures - purposed of job and person-based procedures is to design and manage a pay structure. ## reliability and validity - consultants - improve reliability by using evaluators familiar with the work and trained in job evaluation. - validity refers to degree the evaluation assesses relative job worth. ## Acceptability - formal appeals process → request and re-analysis or skills re-evaluation. - employee attitude surveys assess perceptions of how useful evaluation is as a management tools. ## bias. To ensure bias-free evaluation: - compensable factors and scales to include the content of jobs - factor weights are consistently biased against jobs - apply the plan as bias free a manner as feasible.