Job Evaluation

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
2
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

ORG434: Advanced
3
HRM
 Job Evaluation:
The Point Method
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:
http, firewall.
ORG434: Advanced
4
HRM
 Job Evaluation:
The Point Method
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

ORG434: Advanced
5
HRM
 Job Evaluation:
The Point Method
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
ORG434: Advanced Wisconsin-Oshkosh
6
HRM
 Job Evaluation:
The Point Method
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
7
HRM
 Job Evaluation:
The Point Method
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
8
HRM
 Job Evaluation:
The Point Method

Factors - Degrees 1st 2nd 3rd 4th 5th 6th

Job Knowledge 25 100 175 250

Judgment & Decision Making 10 33 55 78 100
Independent judgment 25 100 175 250
Accountability 20 65 110 155 200
Working conditions 5 20 35 50
Mental 15 42 69 96 123 150
ORG434: Advanced
9
HRM
 Job Evaluation:
The Point Method
Evaluate benchmark jobs to determine
Job Evaluation Point Totals
Benefits supervisor = 700
Training material development specialist =
650
Job evaluation specialist = 460
Compensation manager = 920

ORG434: Advanced
10
HRM
 Job Evaluation:
The Point Method
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

ORG434: Advanced
11
HRM
 Job Evaluation:
The Point Method
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

ORG434: Advanced
12
HRM