Chapter 5

Job-Based Structures and

Job Evaluation
Exhibit 5.1: Many Ways to Create Internal
Structure
 What Is Job Evaluation?

Process of systematically determining the relative

worth of jobs to create a job structure for the
organization. Evaluation is based on a combination
of job content, skills required, value to the
organization, organizational culture and the
external market.
(Note: focus is the job, not the person doing a job.)
 Exhibit 5.2: Assumptions Underlying
Different Views of Job Evaluation
Aspect of Job Evaluation Assumption

Assessment of job
Content has intrinsic value outside external market.
content

Assessment of relative Stakeholders can reach consensus on relative value.

value

External market link Value cannot be specified without external market.

Measurement Honing instruments will provide objective measures.

Negotiation Puts face of rationality to a social / political process;

establishes rules of the game and invites participation.
 Exhibit 5.3: Determining an Internally
Aligned Job Structure

Internal alignment
Job analysis Job description Job evaluation Job structure

Work relationships
within organization

Some Major Decisions in Job Evaluation

• Establish purpose of evaluation
• Decide whether to use single or multiple plans
• Choose among alternative approaches
• Obtain involvement of relevant stakeholders
• Evaluate plan’s usefulness
 Major Decisions
• Establish purpose
– Supports organization strategy
– Supports work flow
– Fair to employees
– Motivates behavior toward
organization objectives
• Single vs. multiple plans
• Choose among methods
– Exhibit 5.5: Comparison of Job Evaluation Methods
• Obtain involvement of relevant stakeholders
• Evaluate plan’s usefulness
Exhibit 5.4: Benchmark Job
 Exhibit 5.5: Comparison of
Job Evaluation Methods
Advantage Disadvantage

Cumbersome as number of
Ranking Fast, simple, easy to explain. jobs increases. Basis for
comparisons is not called out.

Can group a wide range of Descriptions may leave too

Classification
work together in one system. much room for manipulation.

Compensable factors call out

basis for comparisons. Can become bureaucratic
Point
Compensable factors and rule-bound.
communicate what is valued.
 Ranking Method
• Orders job descriptions from highest to lowest
based on a global definition of relative value
or contribution to the organization’s success

• Two approaches

– Alternation ranking

– Paired comparison method

 Classification Method
• Uses class descriptions that serve as the standard for
comparing job descriptions
• Classes include benchmark jobs
• Outcome
– Series of classes with a number of jobs in each
• Examples
– Exhibit 5.7: Classifications
for Engineering Work
 Point Method
• Three common characteristics of point methods
– Compensable factors
– Factor degrees numerically scaled
– Weights reflect relative
importance of each factor
• Most commonly used approach
to establish pay structures
• Differ from other methods by making explicit the
criteria for evaluating jobs -- compensable factors
 Designing a Point Plan:
Six Steps
1. Conduct job analysis
2. Determine and define the compensable factors.
3. Scale the factors (define factor degrees).
4. Weight the factors according to importance (and then
assign points to degrees within the factors or subfactors).
5. Communicate the plan, train users, prepare manual.
6. Apply to nonbenchmark jobs (note issue of interrater
reliability).
Generic Compensable Factors

Skill Effort

Working
Responsibility
conditions
 Generic Factor - Skill
• Technical know-how
• Specialized knowledge
• Organizational awareness
• Educational levels
• Specialized training
• Years of experience required
• Interpersonal skills
• Degree of supervisory skills
 Generic Factor - Effort

• Diversity of tasks
• Complexity of tasks
• Creativity of thinking
• Analytical problem solving
• Physical application of skills
• Degree of assistance available
 Generic Factor - Responsibility
• Decision-making authority
• Scope of organization under control
• Scope of organization impacted
• Degree of integration of work with others
• Impact of failure or risk of job
• Ability to perform tasks without supervision
 Generic Factor – Working Conditions
• Potential hazards inherent in job

• Degree of danger which can be exposed to

others

• Impact of specialized motor or concentration

skills

• Degree of discomfort, exposure, or dirtiness in

doing job
 Step 3: Scale the Factors
• Construct scales reflecting different degrees within each
factor
– Most factor scales consist of 4 to 8 degrees
– Exhibit 5.13: Factor Scaling - NMTA
• Issue - Whether to make each degree equidistant from
adjacent degrees (interval scaling)
 Step 4: Weight the Factors
• Different weights reflect differences in
importance attached to each factor

• Exhibit 5.14: Job Evaluation Form

Exhibit 5.14: Job Evaluation Form
 Step 5: Communicate Plan and Train Users

• Involves development of manual containing

information to allow users to apply plan
– Describes job evaluation method
– Defines compensable factors
– Provides information to permit users to
distinguish varying degrees of each factor
• Include appeals process for employees
 Step 6: Apply to Nonbenchmark Jobs
• Final step involves applying plan to remaining
jobs

– Benchmark jobs were used

to develop compensable
factors and weights

• Trained evaluators will evaluate

new jobs or reevaluate jobs
whose work content has changed
 Final Result: Structure
• Outcome
– Ordered list of jobs based on
their value to organization
– Hierarchy of work
– Structure supporting a
policy of internal alignment
• Information provided by hierarchy
– Which jobs are most
and least valued
– Relative amount of
difference between jobs
• Note that job hierarchy resulting from job evaluation process that
mirrors pay hierarchy of key jobs in external labor market may in
fact be problematic – may be perpetuating historical discrimination
 Exhibit 5.15: Resulting Internal Structures --
Job, Skill, and Competency Based
Managerial Group Technical Group Manufacturing Administrative
Group Group

Assembler I
Inspector I

Head / Chief Administrative

Vice Presidents Packer
Scientist Assistant

Division General Senior Associate Materials Handler Principal Adminis-

Managers Scientist Inspector II trative Secretary

Administrative
Managers Associate Scientist Assembler II
Secretary

Drill Press Operator

Project Leaders Scientist Word Processor
Rough Grinder

Machinist I
Supervisors Technician Clerk / Messenger
Coremaker

Job Evaluation Competency- Skill– Based Job Evaluation

Based