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Human Resource

Management
Fundamentals of Human
Resource Management
Management Essentials

 Management involves setting goals


and allocating scarce resources to
achieve them.
 Management is the process of
efficiently achieving the objectives of
the organization with and through
people.
Management Essentials

 Primary Functions of Management


 Planning – establishing goals
 Organizing – determining what
activities need to be done
 Leading – assuring the right people
are on the job and motivated
 Controlling – monitoring activities to
be sure goals are met
Why is HRM Important to an
Organization?
 The role of human resource managers has
changed. HRM jobs today require a new
level of sophistication.
 Employment legislation has placed new
requirements on employers.
 Jobs have become more technical and
skilled.
 Traditional job boundaries have become
blurred with the advent of such things as
project teams and telecommuting.
 Global competition has increased demands
for productivity.
Why is HRM Important to an
Organization?

 The Strategic Nature – HRM must be


 a strategic business partner and
represent employees.
 forward-thinking, support the business
strategy, and assist the organization in
maintaining competitive advantage.
 concerned with the total cost of its
function and for determining value
added to the organization.
Why is HRM Important to an
Organization?

 HRM is the part of the organization


concerned with the “people”
dimension.
 HRM is both a staff, or support
function that assists line employees,
and a function of every manager’s job.
 HRM Certification
 Colleges and universities offer HR
programs.
Why is HRM Important to an
Organization?

Four basic
functions:
 Staffing

 Training and
Development
 Motivation

 Maintenance
How External Influences
Affect HRM

 Strategic Environment
 Governmental Legislation
 Labor Unions
 Management Thought
How External Influences
Affect HRM
 HRM Strategic Environment includes:
 Globalization
 Technology
 Work force diversity
 Changing skill requirements
 Continuous improvement
 Work process engineering
 Decentralized work sites
 Teams
 Employee involvement
 Ethics
How External Influences
Affect HRM
 Governmental Legislation
 Laws supporting employer and
employee actions
 Labor Unions
 Act on behalf of their members by
negotiating contracts with
management
 Exist to assist workers
 Constrain managers
 Affect non unionized workforce
How External Influences
Affect HRM

 Management Thought
 Management principles, such as those
from scientific management or
based on the Hawthorne studies
influence the practice of HRM.

 More recently, continuous


improvement programs have had a
significant influence on HRM
activities.
Staffing Function Activities
 Employment planning
 ensures that staffing will contribute to
the organization’s mission and
strategy
 Job analysis
 determining the specific skills,
knowledge and abilities needed to be
successful in a particular job
 defining the essential functions of the
job
Staffing Function Activities
 Recruitment
 the process of attracting a pool of
qualified applicants that is
representative of all groups in the
labor market
 Selection
the process of assessing who will be
successful on the job, and
 the communication of information to
assist job candidates in their decision
to accept an offer
Goals of the Training and
Development Function
 Activities in HRM concerned with
assisting employees to develop up-to-
date skills, knowledge, and abilities
 Orientation and socialization help
employees to adapt
 Four phases of training and
development
 Employee training
 Employee development
 Organization development
 Career development
The Motivation Function

 Activities in HRM concerned with helping


employees exert at high energy levels.
 Implications are:
 Individual
 Managerial
 Organizational
 Function of two factors:
 Ability
 Willingness
 Respect
The Motivation Function

 Managing motivation includes:


 Job design
 Setting performance standards
 Establishing effective compensation
and benefits programs
 Understanding motivational theories
The Motivation Function

 Classic Motivation Theories


 Hierarchy of Needs –Maslow
 Theory X – Theory Y –McGregor
 Motivation – Hygiene – Herzberg
 Achievement, Affiliation, and Power
Motives – McClelland
 Equity Theory – Adams
 Expectancy Theory - Vroom
How Important is the
Maintenance Function?
 Activities in HRM concerned with
maintaining employees’ commitment and
loyalty to the organization.
 Health
 Safety
 Communications
 Employee assistance programs
 Effective communications programs
provide for 2-way communication to ensure
that employees are well informed and that
their voices are heard.
Translating HRM Functions
into Practice
 Four Functions:
 Employment
 Training and development
 Compensation/benefits
 Employee relations
HRM in an Entrepreneurial
Enterprise
 General managers may
perform HRM functions, HRM
activities may be outsourced,
or a single generalist may
handle all the HRM functions.
 Benefits include
 freedom from many
government regulations
 an absence of bureaucracy
 an opportunity to share in the
success of the business
HRM in a Global Village

 HRM functions are more complex


when employees are located around
the world.
 Consideration must be given to such
things as foreign language training,
relocation and orientation processes,
etc.
 HRM also involves considering the
needs of employees’ families when
they are sent overseas.
HR and Corporate Ethics

 HRM must:
 Make sure employees know about
corporate ethics policies
 Train employees and supervisors on
how to act ethically
Human Resource Planning
and Job Analysis
Introduction
 Human resource planning
is a process by which an
organization ensures that
 it has the right number and
kinds of people
 at the right place
 at the right time
 capable of effectively and
efficiently completing those
tasks that will help the
organization achieve its
overall strategic objectives.
Introduction

 Linked to the organization’s


overall strategy and planning to
compete domestically and
globally.
 Overall plans and objectives
must be translated into the
number and types of workers
needed.
 Senior HRM staff need to lead
top management in planning for
HRM issues.
An Organizational
Framework
Linking Organizational Strategy
to Human Resource Planning
 Ensures that people are available to
meet the requirements set during
strategic planning.
 Assessing current human resources
 A human resources inventory report
summarizes information on current
workers and their skills.
 Human Resource Information Systems
 HRIS are increasingly popular
computerized databases that contain
important information about
employees.
Linking Organizational Strategy
to Human Resource Planning
 Assessing current human resources
 Succession planning
• includes the development of replacement charts
• portray middle-to-upper level management
positions that may become vacant in the near
future
• lists information about individuals who might
qualify to fill the positions
Linking Organizational Strategy
to Human Resource Planning
 Determining the Demand for Labor
 A human resource inventory can be
developed to project year-by-year
estimates of future HRM needs for
every significant job level and type.
 Forecasts must be made of the need
for specific knowledge, skills and
abilities. ?
Linking Organizational Strategy
to Human Resource Planning

 Predicting the Future Labor Supply


 A unit’s supply of human resources
comes from:
• new hires
• contingent workers
• transfers-in
• individuals returning from leaves
 Predicting these can range from
simple to complex.
Linking Organizational Strategy
to Human Resource Planning

 Predicting the Future Labor Supply


 Decreases in internal supply come
about through:
• Retirements
• Dismissals
• Transfers-out
• Lay-offs
• Voluntary quits
• Sabbaticals
• Prolonged illnesses
• Deaths
Linking Organizational Strategy
to Human Resource Planning

 Where Will We Find Workers


 migration into a community
 recent graduates
 individuals returning from military service
 increases in the number of unemployed and
employed individuals seeking other
opportunities, either part-time or full-time
 The potential labor supply can be expanded
by formal or on-the-job training.
Linking Organizational Strategy
to Human Resource Planning
 Matching Labor Demand and Supply
 Employment planning compares forecasts
for demand and supply of workers.
 Special attention should be paid to current
and future shortages and overstaffing.
 Recruitment or downsizing may be used
to reduce supply and balance demand.
 Rightsizing involves linking staffing levels to
organizational goals.
Linking Organizational Strategy
to Human Resource Planning
Employment Planning and
the Strategic Planning Process
Job Analysis
 Job Analysis is a systematic
exploration of the activities within a
job.
 It defines and documents the duties,
responsibilities and accountabilities of
a job and the conditions under which
a job is performed.
?
Job Analysis
 Job Analysis Methods
 Observation method – job analyst
watches employees directly or reviews
film of workers on the job.
 Individual interview method – a
team of job incumbents is selected
and extensively interviewed.
 Group interview method – a number
of job incumbents are interviewed
simultaneously.
Job Analysis
 Job Analysis Methods
 Structured questionnaire method –
workers complete a specifically
designed questionnaire.
 Technical conference method –
uses supervisors with an extensive
knowledge of the job.
 Diary method – job incumbents
record their daily activities.
 The best results are usually achieved
with some combination of methods.
Job Analysis
 Structured Job Analysis
Techniques
 Department of Labor’s Job Analysis
Process:
• Information from observations and
interviews is used to classify jobs by their
involvement with data, people and things.
• Information on thousands of titles
available on O*Net OnLine which is the
Department of Labor’s replacement for
the Dictionary of Occupational Titles.
Job Analysis
 Position Analysis Questionnaire
(PAQ)(developed at Purdue
University)
 Jobs are rated on 194 elements,
grouped in six major divisions and
28 sections.
 The elements represent
requirements that are applicable to
all types of jobs.
 This type of quantitative
questionnaire allows many different
jobs to be compared with each other,
however, it appears to be more
applicable to higher-level
professional jobs.
Job Analysis

 Job Descriptions
 Written statement of what jobholder does,
how it is done, under what conditions and
why.
 Common format: title; duties; distinguishing
characteristics; environmental conditions;
authority and responsibilities.
 Used to describe the job to applicants, to
guide new employees, and to evaluate
employees.
Job Analysis
 Job Specifications
 States minimum acceptable
qualifications.
 Used to select employees who have
the essential qualifications.
Job Analysis

 Job Evaluations
 Specify relative value of each job in
the organization.
 Used to design equitable
compensation program.
Job Analysis

 The Multi-faceted Nature of Job


Analysis
 Almost all HRM activities are tied to
job analysis.
 Job analysis is the starting point for
sound HRM.
Job Analysis
 Job Analysis and the Changing World of
Work
 Globalization, quality initiatives,
telecommuting, and teams require
adjustments to the components of a job.
 Today’s jobs often require not only technical
skills but interpersonal skills and
communication skills as well.
Recruitment and Selection

By: Dr. Hadia Hamdy


Introduction

 Recruiting
 Once an organization identifies its
human resource needs through
employment planning, it can begin the
process of recruiting potential
candidates for actual or anticipated
organizational vacancies.
Introduction

 Recruiting brings
together those with jobs to
fill and those seeking jobs.
Recruiting Goals

 To provide information that will attract


a significant pool of qualified
candidates and discourage unqualified
ones from applying.
Recruiting Goals

 Factors that affect recruiting


efforts
 Organizational size
 Employment conditions in
the area
 Working conditions, salary
and benefits offered
 Organizational growth or
decline
Recruiting Goals

 Constraints on recruiting efforts


include:
 Organization image
 Job attractiveness
 Internal organizational policies
 Recruiting costs
Recruiting: A Global
Perspective

 For some positions, the whole world is


a relevant labor market.
 Parent (Home) country nationals
are recruited when an organization is
searching for someone with extensive
company experience to launch a very
technical product in a country where it
has never sold before.
Recruiting: A Global
Perspective

 Host-country nationals (HCNs) are


targeted as recruits when companies
want each foreign subsidiary to have
its own distinct national identity.

 HCN’s minimize potential problems


with language, family adjustment and
hostile political environments.
Recruiting Sources

 Sources should match the position to


be filled.
 Sources:
 Internal Searches
 Employee Referrals/
Recommendations
 External Searches
 Alternatives
Recruiting Sources
The internal search
 Organizations that promote
from within identify current
employees for job openings:
 by having individuals bid for
jobs
 by using their HR
management system
 by utilizing employee
referrals
Recruiting Sources

The internal search


 Advantages of promoting from within
include
 morale building
 encouragement of ambitious
employees
 availability of information on existing
employee performance
 cost-savings
 internal candidates’ knowledge of the
organization
Recruiting Sources

The internal search


 Disadvantages include:
 possible inferiority of internal
candidates
 infighting and morale problems
Recruiting Sources
Employee referrals/recommendations
 Current employees can be asked to
recommend recruits.
 Advantages include:
 the employee’s motivation to make a good
recommendation
 the availability of accurate job information for
the recruit
 Employee referrals tend to be more
acceptable applicants, to be more likely to
accept an offer and to have a higher survival
rate.
Recruiting Sources

Employee
referrals/recommendations
 Disadvantages include:
 the possibility of friendship
being confused with job
performance
Recruiting Sources
External searches
 Advertisements: Must decide type
and location of ad, depending on job;
decide whether to focus on job (job
description) or on applicant (job
specification).
 Two factors influence the response
rate:
 identification of the organization
 labor market conditions
Recruiting Sources
External searches
 Employment agencies:
 Public or state employment services
focus on helping unemployed
individuals with lower skill levels to
find jobs.
 Private employment agencies provide
more comprehensive services and are
perceived to offer positions and
applicants of a higher caliber.
Recruiting Sources
External searches
 Schools, colleges, and
universities:
 May provide entry-level or
experienced workers
through their placement
services.
 May also help companies
establish cooperative
education assignments and
internships.
Recruiting Sources
Recruitment alternatives
 Temporary help services.
 Temporary employees help organizations
meet short-term fluctuations in HRM needs.
 Older workers can also provide high quality
temporary help.
 Employee leasing.
 Trained workers are employed by a leasing
company, which provides them to employers
when needed for a flat fee.
 Typically remain with an organization for
longer periods of time.
Questions???
Selection
Selection – the process by which an
organization chooses from a list of
applicants the person or persons who
best meet the selection criteria for the
position available, considering current
environmental conditions
Internal Environmental Factors
Influencing Selection

 Organization characteristics that can


influence the selection process:
 Size
 Complexity
 Technological ability
External Environmental Factors
Influencing Selection

 Government employment laws and


regulations
 Size, composition, and availability of
local labor markets
Reliability of Selection
Criteria

 Reliability – how stable or repeatable


a measurement is over a variety of
testing conditions.
Validity of Selection Criteria

 Validity – addresses the questions of:


 What a selection tool measures
 How well it has measured it

 It is not sufficient for a selection tool to


be reliable
 The selection tool must also be valid
The Selection Process

Initial Screening
 Involves screening of
inquiries and screening
interviews.
 Job description
information is shared
along with a salary
range.
The Selection Process
Employment Interview
Interviews involve a face-to-face meeting with
the candidate to probe areas not addressed
by the application form or tests
 Two strategies for effective use of interviews:
1. Structuring the interview to be reliable and
valid
2. Training managers on best interview
techniques
The Selection Process

Types of Interviews:
 Unstructured interview

 Structured interview

 Behavioral Interviews
 Candidates are observed not only for
what they say, but how they behave.
 Role playing is often used.

 Stress Interviews.
The Selection Process

Realistic Job Preview


 RJP’s present unfavorable as well as
favorable information about the job to
applicants.
 May include brochures, films, tours,
work sampling, or verbal statements
that realistically portray the job.
 RJP’s reduce turnover without
lowering acceptance rates.
The Selection Process

Employment Tests
 Mechanism that attempts to measure
certain characteristics of individuals,
e.g.,
 aptitudes
 intelligence
 personality

 Should be validated before being


used to make hiring decisions
The Selection Process
Employment Tests
 Estimates say 60% of all organizations
use some type of employment tests.
 Performance simulation tests: requires
the applicant to engage in specific job
behaviors necessary for doing the job
successfully.
 Work sampling: Job analysis is used to
develop a miniature replica of the job on
which an applicant demonstrates his/her
skills.
The Selection Process
Employment Tests
 Assessment centers: A series of
tests and exercises, including
individual and group simulation
tests, is used to assess managerial
potential or other complex sets of
skills.
 Testing in a global arena:
Selection practices must be
adapted to cultures and
regulations of host country.
The Selection Process

Background Investigation:
 Verify information from the application
form
 Typical information verified includes:
 former employers
 previous job performance
 education
 legal status to work
 credit references
 criminal records
The Selection Process

Background Investigation
 Do not always provide an organization
with meaningful information about
applicants
 Concerns over the legality of asking
for and providing confidential
information about applicants
The Selection Process

Physical Examinations
 Should be required only after a
conditional offer of employment has
been made
Summary

 Putting more money into selection can


significantly reduce the amount of money
it must spend on training

 A selection system will make some


mistakes
 No guarantee of successful job
performance
Questions????
Training and Development

By: Magda Hassan


Agenda
 The Socialization Process.
 Employee Orientation.

 Employee Training

 Employee Development.

 Organization Development.

 Evaluation of Training Program.


Introduction

 Socialization, training and


development are all used to help
new employees adapt to their new
organizations and become fully
productive.
 Ideally, employees will understand
and accept the behaviors desired by
the organization, and will be able to
attain their own goals by exhibiting
these behaviors.
1. The socialization Process

 Socialization
 A process of adaptation to a
new work role.
 Adjustments must be made
whenever individuals change
jobs
 The most profound adjustment
occurs when an individual first
enters an organization.
1. The socialization Process

The assumptions of employee


socialization:
 Socialization strongly influences
employee performance and
organizational stability
 Provides information on how to do the
job and ensuring organizational fit.
 New members suffer from anxiety,
which motivates them to learn the
values and norms of the organization.
1. The socialization Process
The assumptions of employee
socialization:
 Socialization is influenced by subtle
and less subtle statements and
behaviors exhibited by colleagues,
management, employees, clients
and others.
 Individuals adjust to new situations
in remarkably similar ways.
 All new employees go through a
settling-in period.
1. The socialization Process
A Socialization Process
1. The socialization Process

The Socialization Process


 Prearrival stage:
Individuals arrive with a
set of values, attitudes
and expectations which
they have developed
from previous experience
and the selection
process.
1. The socialization Process
 The Socialization
Process
 Encounter stage:
Individuals discover how
well their expectations
match realities within the
organization.
 Where differences exist,
socialization occurs to
imbue the employee with
the organization’s
standards.
1. The socialization Process

The Socialization Process


 Metamorphosis stage: Individuals
have adapted to the organization, feel
accepted and know what is expected
of them.
2. New-Employee Orientation
Purpose

 Orientation may be done by the supervisor,


the HRM staff or some combination.
 Formal or informal, depending on the size of
the organization.
 Covers such things as:
 The organization’s objectives
 History
 Philosophy
 Procedures
 Rules
 HRM policies and benefits
 Fellow employees
2. New-Employee Orientation

 Learning the Organization’s


Culture
 Culture includes long-standing,
often unwritten rules about what
is appropriate behavior.
 Socialized employees know how
things are done, what matters,
and which behaviors and
perspectives are acceptable.
2. New-Employee Orientation
Roles

The CEO’s Role in Orientation


 Senior management are often visible
during the new employee orientation
process.
 CEOs can:
 Welcome employees.
 Provide a vision for the company.
 Introduce company culture -- what matters.
 Convey that the company cares about
employees.
 Allay some new employee anxieties and help
them to feel good about their job choice.
2. New-Employee Orientation

HRM’s Role in Orientation


 Coordinating Role: HRM
instructs new employees
when and where to report;
provides information about
benefits choices.
 Participant Role: HRM
offers its assistance for
future employee needs
(career guidance, training,
etc.).
3. Employee Training
Definitions
 Employee training
a learning experience
designed to achieve a
relatively permanent change
in an individual that will
improve the ability to perform
on the job.
 Employee development
future-oriented training,
focusing on the personal
growth of the employee.
3. Employee Training
Determining Training Needs
4. Methods of Employee Training
 On-the-job training methods
 Job Rotation
 Understudy Assignments

 Off-the-job training methods


 Classroom lectures
 Films and videos
 Simulation exercises
 Vestibule training
5.Employee Development

 This future-oriented set of


activities is predominantly
an educational process.
 All employees, regardless
of level, can benefit from
the methods previously
used to develop
managerial personnel.
5.Employee Development

Employee development methods


 Job rotation involves moving
employees to various positions
in the organization to expand
their skills, knowledge and
abilities.
 Assistant-to positions allow
employees with potential to
work under and be coached by
successful managers.
6. Employee Development
Methods
Employee development methods
 Committee assignments provide
opportunities for:
• decision-making
• learning by watching others
• becoming more familiar with
organizational members and problems
 Lecture courses and seminars
benefit from today’s technology and
are often offered in a distance
learning format.
6. Employee Development
Methods

Employee development methods


 Simulations include case studies,
decision games and role plays and
are intended to improve decision-
making.
 Outdoor training typically involves
challenges which teach trainees the
importance of teamwork.
7. Organization Development

 What is change?
 OD efforts support changes that are
usually made in four areas:
 The organization’s systems
 Technology
 Processes
 People
7. Organization Development

 Two metaphors clarify the change


process.
 The calm waters metaphor describes
unfreezing the status quo, change to a
new state, and refreezing to ensure
that the change is permanent.
 The white-water rapids metaphor
recognizes today’s business
environment which is less stable and
not as predictable.
8. Evaluating Training and
Development Effectiveness
Evaluating Training Programs:
 Typically, employee and manager opinions
are used,
 These opinions or reactions are not
necessarily valid measures
 Influenced by things like difficulty,
entertainment value or personality of the
instructor.
 Performance-based measures (benefits
gained) are better indicators of training’s
cost-effectiveness.
Performance Appraisal and
Compensation

By: Yomna Sameer


Evaluating Employee
Performance - Agenda

 Purpose of performance management


system
 Difficulties in performance
management system
 Steps of the Appraisal process

 Appraisal methods
Performance Evaluation

 The performance management


systems need to include:
 decisions about who should
evaluate performance
 what format should be used
 how the results should be utilized
Purposes of a Performance
Management System

 Feedback - let employees know how


well they have done and allow for
employee input.
 Development – identify areas in
which employees have deficiencies or
weaknesses.
Difficulties in Performance Management
Systems

 Focus on the individual:


Discussions of performance may elicit
strong emotions and may generate
conflicts when subordinates and
supervisors do not agree.
Difficulties in Performance Management
Systems

 Focus on the process: Company


policies and procedures may present
barriers to a properly functioning
appraisal process.
 Additionally, appraisers may be poorly
trained.
The Appraisal Process
Step 1 and 2
 Establishment of performance
standards
 Derived from company’s strategic
goals.
 Based on job analysis and job
description.
 Communication of performance
standards to employee.
Step 3 and 4

 Measurement of performance using


information from:
 personal observation
 statistical reports
 oral reports
 written reports

 Comparison of actual performance


with standards.
Step 5 and 6

 Discussion of appraisal with


employee.
 Identification of corrective action
where necessary.

 Basic corrective action deals with


causes.
Appraisal Methods

Three approaches:
 Absolute standards

 Relative standards

 Objectives
1. Absolute Standards

Evaluating absolute standards:


 An employee’s performance is
measured against established
standards.
 Evaluation is independent of any other
employee.
1. Absolute Standards

 Essay Appraisal: Appraiser writes


narrative describing employee
performance & suggestions.
 Critical Incident Appraisal: Based
on key behavior incident illustrating
effective or ineffective job
performance.
1. Absolute Standards

 Checklist Appraisal: Appraiser checks off


behaviors that apply to the employee.
 Adjective Rating Scale Appraisal:
Appraiser rates employee on a number of job-
related factors.
1. Absolute Standards

 Forced-Choice Appraisal:
Appraisers choose from sets of
statements which appear to be equally
favorable, the statement which best
describes the employee.
1. Absolute Standards

 Behaviorally Anchored
Rating Scales (BARS):
Appraiser rates employee
on factors which are defined
by behavioral descriptions
illustrating various
dimensions along each
rating scale.
2. Relative Method

 Employees are evaluated by


comparing their performance to the
performance of other employees.
2. Relative Method

 Group Order Ranking: Employees


are placed in a classification reflecting
their relative performance, such as
“top one-fifth.”
2. Relative Method

 Individual Ranking:
Employees are ranked from
highest to lowest.
 Paired Comparison:
• Each individual is compared to
every other.
• Final ranking is based on
number of times the individual
is preferred member in a pair.
3. Achieved Outcome
Method

Management by Objectives (MBO)


 includes mutual objective setting and
evaluation based on the attainment of
the specific objectives
3. Achieved Outcome
Method

 Common elements in an MBO


program are:
• goal specificity
• participative decision making
• an explicit time period
• performance feedback
 Effectively increases employee
performance and organizational
productivity.
Creating More Effective
Performance Management Systems
Development of Compensation
and Pay systems - Agenda

 Objectives of compensation
 Types of rewards

 Development of a base pay system


Objectives of compensation

 Efficiency
 Quality
 Performance
 Cost

 Fairness

 Compliance
Types of Reward Plans

Intrinsic versus Extrinsic Rewards


 Intrinsic rewards (personal
satisfactions) come from the job itself,
such as:
 pride in one’s work
 feelings of accomplishment
 being part of a work team
Types of Reward Plans

Intrinsic versus Extrinsic Rewards


 Extrinsic rewards come from a
source outside the job
 include rewards offered mainly by
management
 Money
 Promotions
 Benefits
Types of Reward Plans
Financial versus Non-financial Rewards
 Financial rewards include:
 wages
 bonuses
 profit sharing
 pension plans
 paid leaves
 purchase discounts
 Non-financial rewards emphasize making life
on the job more attractive; employees vary
greatly on what types they find desirable.
Introduction
Development of a Base Pay
System

Job Analysis

Job Evaluation

Pay Survey

Job Structure

Pay Structure & Grades


Development of a Base Pay
System
Job Evaluation
 Use of job analysis
information to determine
the relative value of each
job in relation to all jobs ?
within the organization.
 The ranking of jobs
 Labor market conditions
 Collective bargaining
 Individual skill differences
Development of a Base Pay
System

Job Evaluation Methods


 Ordering method: A
committee places jobs in a
simple rank order from
highest (worth highest pay)
to lowest.
Development of a Base Pay
System

Job Evaluation Methods


 Classification method:
 Jobs are placed in classification
grades
 Compare their descriptions to the
classification description and
benchmarked jobs
 Look for a common denominator such
as skills, knowledge, or responsibility
Development of a Base Pay
System

Job Evaluation Methods


 Point method:
 Jobs are rated and allocated points
on several identifiable criteria,
using clearly defined rating scales.
 Jobs with similar point totals are
placed in similar pay grades.
 Offers the greatest stability.
Development of a Base Pay
System

Establishing the Pay


Structure
 Compensation surveys
 Used to gather factual data on
pay rates for other
organizations
 Information is often collected
on associated employee
benefits as well
Any Questions