Job Evaluation – US steel

Background
• The USSC and other steel companies were
formed by mergers and therefore plants of
separate origins and different wage
backgrounds.
• Constant technological change affecting
equipment ,materials , processes, products
and work assignments tended to aggravate
wage dislocations
• Coexistence of hourly paid jobs and incentive
systems of endless variety. Due to wartime
production incentive workers faring better
than time workers.
• Introduction of uniform work week lowered
take home pay of those in continuous
operations.
• A wide variety of pay practices some no longer
in use had left their mark on rate structure.

• THUS in short “wage inequities”

 Speaking in 1947, R.Conrad Cooper, then assitant vice-president, Industrial Relations of the United States Steel
Corporation described the 1937 situation as follows:

• Thus the principal ingredients of the wage rate

situation of ten years ago were; a body of specific
rates emerging from different backgrounds in
various localities; a new union striving for position;
employees possessed of a new devise by which to
explore real or imaginary wage rate grievances; no
fixed wage scales in agreements; a specified right
to challenge the equity of any particular rate; no
agreed yardstick by which to judge the equity of
the rate ones challenged; and no terminal point for
the settlement of such differences.
• In contrast to the usual approach to job evaluation, which
tries to “correct” a wage structure through the application
of a manual with preconceived weights, CWS technicians
believed that designing a wage structure was beyond the
scope of job evaluation. They preferred to find and use
the weights for various job factors, which have been
developed in the steel industry through “the impact of
the community labour market, the ups and downs of
business cycles, hundreds of thousands of individual
judgements and individual bargainging, as well as
collective bargaining…”.
• Guess the categories ?
 Four Basic Categories
• Skill
• Responsibility
• Effort
• Working Conditions
 Skill
• Pre-employment training
• Employment training and experience
• Mental Skill
• Manual Skill
 Responsibility
• Responsibility for Materials
• Responsibility for tools and equipment
• Responsibility for operations
• Responsibility for safety of others
 Effort
• Mental Effort
• Physical Effort
 Working Conditions
• Surroundings
• Hazards
• The scheme of development of the CWS plan depended heavily
upon the use of a selected group of jobs, which were classified
concurrently with the development of the plan itself and served
four purposes:
• Their ranking helped to determine the number of factor levels and
the maximum level needed in each factor to cover the field.
• Their classifications and rates were used to determine the final
factor weight.
• These jobs were designated “benchmarks”, an integral part of the
plan to be used in classifying other jobs.
• Benchmark jobs served to test the adequacy of the paln upon its
completion.
 Factor Comparison Method  

•             This is a quantitative approach for job-

evaluation. It resembles the classification
method as levels or grades are used in both.
Five key-factor scales are used for analysis and
evaluating jobs. These factors are: (1) skill, (2)
mental effort, (3) physical effort, (4)
responsibility, and (5) working conditions. A
composite score is obtained for all factors.
Following steps are followed in this method:
 Step 1:

 
• Select a number of “key” jobs (generally 15 to
25). Record wages of “key jobs”. Key-jobs are
selected in such a way that these/are fairly
paid.
 Step 2:

•  
• Analyze each “key job” for the five critical-
factors, namely: (1) mental requirement, (2)
physical requirements, (3) skill requirements,
(4) working conditions, and (5) responsibility.
 Step 3:
•  
• Rank each of the key-jobs within each factor.
The rank may vary between factors.
 Step 4:

•  
• Assign wages according to each factor. It
should be in proportion to the requirement of
each factor in the job.
 Step 5:
•  
• Calculate total wage-rate for a job by adding
the wage-rate for each factor. This provides a
job comparison scale. Insert key-jobs in it.
 Step 6:

•  
• Evaluate the job under consideration using
factor-by-factor in relation to the key jobs on
job comparison scale. Then evaluate and
compare each job with other jobs in terms of
each factor.
 Advantages of Factor Comparison Method

•  
• (i)         It uses wages of the existing key jobs, which provide standard
against which all other jobs are compared.
•  
• (ii)        Direct comparison is used for determining wages.
•  
• (iii)       A scale for comparing factor of new jobs is available in this method.
This speeds up the evaluation for non-key or new jobs.
•  
• (iv)       It is quantitative, yet relatively easy to apply once the factor and
levels have been decided.
 Disadvantages of Factor Comparison Method

•  
• (i)         It is costly and time-consuming to setup initially.
•  
• (ii)        The initial set-up is to be changed every time the wage-
structure changes.
•  
• (iii)       If unfairly paid jobs are selected as key-jobs, then the
entire scaling of factors gives wrong results.
•  
• (iv)       Subjectivity in the grading is often challengeable.
Different evaluator may give different wages for one factor.
 Step 7:

•  
• Design, adjust and operate the wage-
structure.