HR WK 6

JOB ANALYSIS: A STEP-BY-STEP PROCESS

Step 1: Obtain Management Approval

Before beginning a major undertaking in any organization, be sure to obtain top management support. The human resources department should not unilaterally initiate a job analysis effort. Support is won more easily when management is aware of its legal liabilities under the Fair Labor Standards Act (FLSA), ADA, Equal Pay, and all of the various local, state, and federal civil rights laws (in Canada, the Human Rights Act and pay-equity laws). Consequently, it may be necessary first to educate management about the critical role job analysis has in minimizing liability under these laws. Job analysis also is the first step to ensure that jobs are classified properly as either exempt or nonexempt, that “essential job functions” are identified, and that hiring requirements (i.e., job specifications) are clear and defensible. Moreover, performance appraisals can lead to lawsuits under state and federal anti-discrimination laws. Legally, a performance appraisal is a type of selection procedure or employment test. The basis for developing standards of performance is the job description, which is developed from a detailed job analysis. Consequently, job analysis is critical to developing a sound performance management system.

FIGURE 10.4  Work team.

When coupled with work analysis, there are many aspects of job analysis that also are of interest to management. All organizations want to ensure that roles and responsibilities are clearly understood, that there is no duplication of effort, and that work flows smoothly and efficiently from one department or function to another. In an era when organizations are seeking to achieve the “right” size, job and work analysis also can establish the basis on which staffing decisions can be made. Technology has greatly impacted the design of work and efficiency of workers. An up-to-date job analysis ensures management that job content, job descriptions, and so on accurately reflect how work is being performed and what skills are required. It also ensures them that correct job matching occurs when benchmark jobs are priced against relevant labor markets. Job analysis is also necessary to develop a successful training program for workers assigned to jobs that require formal training. Job and work analysis give management a clear picture of who is doing (or not doing) what, and they provide the basis for ensuring that the company’s limited compensation dollars are properly spent.

To institute effective quality management programs, it is imperative that the work dynamics be understood before any realistic improvements can be made. However, management’s desire to make things better is not enough; employee acceptance also is needed.

Step 2: Gain Employee Acceptance

Employee acceptance is crucial. If management has done an inadequate job of communicating what the job analysis or work-study effort is all about and the reasons for it, negative employee relations may result.

Because of the recent downsizing trend in American business, employees naturally will view job or work analysis efforts with suspicion. To mitigate any negative impact of the job analysis process, an upbeat communication campaign should be developed to explain to employees why the study is being done (e.g., implementation of an incentive program, compliance with ADA, re-evaluation of jobs, development of the strategic plan, development of total quality management programs, etc.).

Emphasize the benefits to the employee as well—a clearly defined job that will be the basis for developing performance standards and evaluating the job’s worth, or the creation of opportunities for employee participation in the production process to increase quality and efficiency, and to enhance employee satisfaction. Potentially, the study could result in determination of required competencies and training developed for employees in those competencies that employees might now fall below new standards. The latter may particularly be the case with new/upgraded technology. Communicate how employees can help the process by properly filling out questionnaires, responding to interview questions with detailed information, making suggestions for work improvement, and identifying problem areas.

Emphasize to employees how critical it is to get good information about their jobs. If the job-analysis effort is the first step in a project to re-evaluate jobs, the organization should promise to communicate the results—consistent with management’s philosophy on communicating compensation matters. To maintain credibility in the future, it is imperative to honor that promise.

If the work-study is intended to result in a realignment of workers into teams or to implement quality improvements, explain to participants that their input at the outset is vital, and that the final work redesign plan will be presented to them first for their suggestions. Employees must believe that their participation is welcome and will make a difference.

Gaining Union Support

In a union environment, gaining the union’s cooperation and support is always important. However, even without that support, management has the right to collect important information about jobs. Fortunately, union support frequently is forthcoming because job-analysis information is helpful in defining jobs in contracts and in conducting pay surveys. However, job descriptions sometimes become work “rules” and handcuff management’s flexibility in union environments.

Work-studies may be opposed if a union perceives it to be the first step in job eliminations. However, in today’s competitive, global economy, unions understand the need for efficiency and quality. It is on this basis that their cooperation can be solicited, especially if they are invited to participate in the process so everyone is working toward a common goal—a profitable and stable organization that produces a quality product.

Step 3: Decide Who Will Conduct the Analysis

Job or work analysis can be performed by anyone in the organization who has been trained or who is familiar with the work being analyzed. Of course, it is always best to ask trained job analysts from the human resources department or elsewhere to conduct the study. This is not always practical, however, because of time constraints, geographic limitations, or company size.

To be efficient, especially when many jobs need to be analyzed, organizations ask supervisors, job incumbents, human resources staff, outside consultants, and others to perform the analysis. The best results come from directly involving supervisors and incumbents. Most important, mutual concern for working efficiently and enhanced communication between worker and manager often result. If everyone is not trained in the analysis techniques discussed in this book, the results will be inconsistent, and, consequently, of limited value.

Whoever is chosen to do the analysis should have good interpersonal skills, good writing skills, and knowledge of how the organization functions. In addition, successful analysts will be inquisitive by nature and objective in their business dealings.

Step 4: Think in Terms of Work Flow

In all organizations, whether profit or nonprofit, public or private, work “flows” from one area to another. (See  Figure 10.5 .) Whether it is manual or intellectual work that is being analyzed, think of work flow in these terms: The worker will receive work from someone (or somewhere), will add value by doing something to it, and then will pass it on to the next worker. If no value is added (this may frequently be the case, particularly in bureaucratic organizations), the activity should be reviewed to determine the implications of discontinuing it. If it is discontinued, the worker should be reassigned, if possible.

In a quality management environment, workflow focuses heavily on the “added-value” component. Workflow on an assembly line, for example, might involve one worker passing a semifinished product to the next worker on the line, who adds another part and then passes it on, and so on until completion.

In quality management, workflow is scrutinized from two standpoints:

· From within the job itself.

· Through the entire process of the workflow.

Workflow is not simply lateral. In knowledge work, workers receive a project assignment from their bosses, or a request from another department, or a report from a subordinate. A job analyst’s concern is what the worker does with the assignment. Therefore, workflow can be vertical (work assignments are passed upward or downward in the organization), lateral (work assignments are received from and sent to peer departments), or diagonal (work is requested from or sent to incumbents who are in other functions and at different levels in the organizational hierarchy). Often, the formal chain of command is not followed, and workflow speed increases; this is important to remember in conducting workflow analysis, especially if the ultimate goal of the analysis is to reorganize job incumbents into teams.

FIGURE 10.5  How work flows.

While review of workflow is important for both quality management and job evaluation purposes, the process differs for each purpose. For job evaluation, it is important to understand a specific job and its relationship with other jobs in the job-worth hierarchy (the value organizations place on individual jobs). In quality management, workflow is scrutinized from two standpoints:

· From within the job itself, by having the job incumbent ask questions for each activity, such as: From where or from whom does the work come? Are there any changes in how the work is provided to me that would make my job easier or faster? How could I enhance the work I provide to others to expedite the next step in the workflow? By asking such questions, the worker is trained to think in an analytical way about what is being done and why.

· Through the entire process of the workflow, to determine if a major activity can be accomplished more effectively and efficiently through reassignment or through modification of one or more tasks or responsibilities, not only across job functions but also across departmental lines. If the purpose of the work-study ultimately is to enhance teamwork, the analysis will focus additionally on identifying the best cluster of workers, or “team,” that adds value to the product or service being produced.

Step 5: Consult Secondary Sources First

Before beginning to conduct the actual job or work analysis by approaching a worker or a supervisor, it is always useful to study existing secondary-source information about the job or process to be reviewed. Many sources of information are already available about the work being performed.

Internal Sources

The most obvious and perhaps most useful piece of information available is the existing job description. Instead of starting from scratch, it is possible simply to update the job description based on additional information gathered from the job incumbent, supervisor, or both. Focus on “what has changed” rather than rewriting the job description from the beginning. Again, technology has greatly influenced how work is done, and it is imperative that these changes are captured through a current job analysis. Generic job descriptions provided in salary surveys of benchmark jobs are another good secondary source of information.

Other sources can offer quite a bit of information about the job, about the unit in which the job or work group is located, and about workflow. In terms of workflow, the most useful source is the organization chart. It tells where the worker function is located within the organization, and it provides a good idea of where the work comes from and where it goes after the unit has added value.

Many organizations design company phone books that reflect their structure. For example, the head of a department is shown at the top of the page, indented below is a list of the major functional units within that department, and further indented are the specific names and titles of workers in each unit. When current formal organization charts are not available, the phone book can be a valuable substitute, but keep in mind that it may not reflect actual reporting relationships accurately.

Today’s organizations often use the management-by-objectives (MBO) approach to communicate the key contributions expected from each department on an annual basis. These usually are broken into specific objectives for each worker, and they will indicate the expected contribution(s) of the job being analyzed. Organization or department strategic plans and annual budget write-ups also can provide helpful, though indirect, information. These are important models to use while conducting the “reality test” in Step 10.

In an attempt to understand which functions can be automated, systems analysts often prepare work-studies and procedures manuals. To do so, they will ask job incumbents to keep diaries and logs for a period of time. Certain types of work need to be performed in an orderly and consistent manner, and many organizations develop training or procedures manuals that instruct the worker on how to perform specific tasks. These documents all should be consulted to gain an understanding of the nature of the work that is being performed before actually conducting a job analysis. If parts of the workflow have been outsourced, the outsourcing contract will usually contain specific “Service Level Agreements” that spell out in detail the work to be performed and the level of quality to be achieved by the external entity.

External Sources

Source material also may be found in government publications, books, magazines, and other material published by industry or professional trade associations. The Dictionary of Occupational Titles (DOT), published by the federal government, provides information on more than 20,000 job titles. The government also publishes The Occupational Outlook Handbook (OOH), which is cross-referenced to the DOT and provides extensive information about jobs and the outlook for related careers. Both are valuable sources and especially are useful when the analyst has little knowledge of the jobs to be studied. Both DOT and OOH are accessible online.

In addition, many professions such as law, accounting, and human resources have associations that gladly will supply information about the nature of work performed by their membership, including model job descriptions. Usually, they also publish magazines and newsletters that, although technical or narrow, certainly can provide valuable insight to a job analyst. In addition, do not forget the local bookstore or library, where information can be found about the type of work that is to be analyzed, including textbooks in the subject field.

The idea is to use any or all of these sources, as necessary, to gain at least a general understanding of the job before moving to the next step. Moreover, the customer may be the most critical source of information regarding the quality or lack of it that represents the outcome of the work performed.

Step 6: Decide Method and Collect Data

When deciding how to collect the information needed to analyze work, it is important to take into account the scope of the project and the time, staff, and costs involved. There are three primary methods of collecting information about jobs: observation, interviews, and questionnaires. Each has advantages and disadvantages.

Observation Method

The observation method is most appropriate for manual and repetitive production work. For example, in the case of an assembly line worker attaching simple handles to pieces of equipment, two or three observations would be sufficient to learn where the work comes from, what the assembler does with it, and where the work goes after the operation is complete.

In-depth questioning of the worker, or having the worker maintain a detailed log for several days, would not be necessary to understand what is being done and how it is being done. For a more complicated or protracted process, it might be necessary to observe several cycles or to observe them piecemeal. The cycles may occur over days or weeks, so it is important to know if the entire function or just part of it is being observed.

How to Observe

Do not assume that the worker knows why the observation is occurring. Remember, the best job analysis occurs in an atmosphere of trust. Once the observation begins, be as unobtrusive as possible so as not to interfere with the process. While observing production jobs, it is important to be aware of the effort the worker exerts in doing the job and the physical environment in which the work is performed. Record noise, heat, moving machine parts, and the weight of parts or equipment handled. Pay special attention to the work environment, for example, heat, noise, etc. If the work is performed outside, weather and other factors may also be important. Note any exposure or handling of hazardous materials, safety equipment required as well as the physical demand on the worker, for example, ability to lift objects weighing more than 50 pounds. Thank the worker when finished with the observations. It is always a good idea to discuss observations with a supervisor. Summarize any notes taken soon after the observation so important details are not forgotten. If complete, notes are a form of job documentation, even though they usually are developed into a more formal job description.

The observation method is not limited to single-job analysis. It is useful in following a product or service from raw material to finished product, especially if the process is predominantly manual in nature. In fact, it is a valuable first step in total quality management to walk through the entire production process before any changes are contemplated. “Walk-throughs” are also a valuable step when the purpose of the study is to identify appropriate members of work teams.

Observation and Interviews

Observation can be used in conjunction with questionnaires by having workers complete them before observation of the production process. When observing a more sophisticated process, ask the worker a few questions to clarify the observations. For example, suppose an assembler sometimes opens the casing before attaching the handle and makes some adjustment to the internal mechanisms. Observation in this case does not tell the whole story. It is necessary to ask the assembler why the adjustments are being made to some machines and not others, what the adjustment actually is, and how long the average adjustment takes. In a workflow study; ask what could have been done in a previous operation to make the worker’s job more efficient, or what the worker could do to streamline the next operation in the process. Try not to interfere with the worker or the process; questioning between cycles is best. If it seems that part of the picture is missing, talk to a supervisor.

Observations: Advantages and Disadvantages

Observation is time-consuming and costly, and it requires observers to be trained properly. By itself, it may not be a sufficient approach to job analysis because the observer might “miss” something important. In a more thorough work analysis, an analyst will have to question why things are being done. Consequently, the analyst will have to discuss his or her observations with a worker’s supervisor or other technical experts. While it can be expensive, observation is not as costly as the next method, one-on-one interviewing.

One-on-One Interviewing

The observation method becomes less useful toward the higher end of the organization hierarchy. Watching a financial analyst poring over numbers or executing a computer program will not tell much about what actually is being done, nor will it indicate the skills required to do it. An in-depth discussion with the job incumbent will provide information about what is being done, how and why. A useful analogy often has been drawn between a job analyst doing an interview and a newspaper reporter whose job is to find out who, what, where, when, why, and how. As mentioned before, consult secondary sources first to ensure that interview questions are informed and insightful.

Starting an Interview

The most important part of the interview is the beginning. (See  Figure 10.6 .) It is always important to put the job incumbent at ease by engaging in informal chitchat to break the ice. Then, as the formal part of the interview begins, it is imperative to explain why the meeting is taking place, what will be discussed, and what will occur after the interview is over. If the job incumbent still seems unsure about why the interview is taking place, it is even more important to provide an adequate explanation. Otherwise, the interviewee will be guarded and the interview will be difficult. Remember, the best interview occurs in an atmosphere of trust and mutual commitment to fact-finding.

Start the actual interview with broad, general questions: On what do you spend most of your time? What are your major responsibilities, from the most important to the least important?

If there are no up-to-date organization charts, start by asking the incumbent to describe the department and the chain of command. Keeping the concept of work-flow in mind, probe from the general to the specific as the incumbent begins to answer questions. Listen actively by nodding when the incumbent emphasizes certain points. Use eye-to-eye contact frequently and ask insightful and clarifying questions; it demonstrates genuine interest in the job.

FIGURE 10.6  How to conduct an interview.

Learn to listen “between the lines.” Avoid closed-ended questions that can be answered with simple “yes” or “no” answers. The mission is to obtain as much information about the job as possible.

Writing a Job Description

If the goal is to write a job description from the interview that will be used for job evaluation, it is necessary to know beforehand what the evaluators will be looking for in the job description—that is, what “compensable factors” they will be using to evaluate the job. Compensable factors are ones for which an organization is willing to pay. The specific factors and how they are measured should be explained in the job-evaluation plan being used.

It is important to have a solid understanding of the compensable factors in order to ask pertinent questions or to probe deeper for clarification. Let’s take a compensable factor such as “freedom to act,” for example, and assume it is measured by the degree of sign-off authority an incumbent has. In the interview, ask: “What is your expenditure approval authority? Is it $1,000? $10,000? $1 million?”

Note that the answer to this question is expressed in numbers, or dimensions. Dimensions are statistics that help quantify the scope of the job and the impact that the incumbent performing it has on the bottom line. Frequently requested dimensions include dollar sign-off authority, number of subordinates reporting, budget, dollar-value of plant and equipment, sales volume, revenues, expenses, assets under management, and so on.

Some organizations are moving toward defining jobs in terms of “competencies,” the technical and behavioral skills inherently needed to perform the job well. Competencies focus on what people are or can do; they identify traits, knowledge, skills, and abilities.

How to Ask Questions

Not all questions will be direct or specific.  Figure 10.7  gives a list of suggested questions that can be modified to create a specific checklist that ensures all-important topics have been covered. With practice, it is possible to develop a reliable list of questions and a sequence for asking them. Remember to ask questions that pertain to quality management and workflow. (See questions 9 through 14 in  Figure 10.7 .)

Each interview is unique, and some will be easier (and more interesting) than others. Do not try to hold the job incumbent to a preset notion of the order in which things should be discussed. Remember to direct the interview, not control it. A free-flowing dialogue can reveal much. However, to make sure all important issues have been explored, double-check the question list toward the end of the interview.

During the interview, it is acceptable to admit that something is unclear. Every profession has its jargon and acronyms, and professionals often talk in “code,” forgetting that the uninitiated do not understand. When unsure of something, stop the interviewee and ask, “What does that mean?”, or, “Could you please explain?” Also ask for examples. If a financial analyst talks about a complicated report, ask to see a copy of it. Being able to touch the report physically to see how lengthy and involved it is (or is not) will provide a more complete picture of the work as well as the knowledge, skills, and abilities required to do it.

FIGURE 10.7  Suggested interview questions.

Closing the Interview

Closing the interview is as important as beginning it. Explain the next steps in the process. (For example, a draft of the job description will be prepared and sent for the incumbent’s review and comments within five business days.) Give the incumbent a business card and invite him or her to call if there is anything that should have been discussed but was not. Find out when the best time is to contact the job incumbent with follow-up questions, if necessary.

Most organizations separate the responsibility for job analysis from the responsibility for job evaluation. However, someone in the awkward position of being both analyst and evaluator should not be forced during the interview into giving an indication of the evaluation. Emphasize the current fact-finding role; explain that evaluation decisions will be postponed until the job description is finished and can be reviewed in the context of the larger picture. If the interview was conducted as part of a work-study, explain that the job and the value it adds will be assessed when the whole process has been analyzed.

Often, the incumbent will find that the interview was a valuable experience. Don’t be surprised if the incumbent says afterward, “You know, I never stopped to think about how much I actually get involved with around here.”

When finished with the interview, take time immediately to summarize and organize notes, especially if there is more than one interview a day or if a time lapse of a day or two is expected before it is possible to write the job description or work-analysis report. Time has a way of eroding the understanding and recall of important details.

Group Interviews

Interviewing is not limited to a single job incumbent. It is possible to conduct a “group interview,” where several incumbents are interviewed at the same time. The guidelines presented earlier apply. At times, especially in total-quality programs, it may be desirable to bring several experts from different disciplines together to discuss the work, usually because it is highly technical.

For example, consider an assembler who has to stop occasionally to make an adjustment before attaching the handle. Perhaps there is a problem with the previous operation. By bringing the supervisor, quality-control manager, and parts department together, the problem can be identified and resolved. If not, at least there will be an adequate explanation made of why the adjustment is necessary on some machines but not every machine, and a conclusion can be drawn that there is nothing more to be done to prevent it at this time. Such meetings are known as “technical interviews” because they tend to focus on very specific items. Technical interviews are critical in a total-quality study because they help enhance communications, clarify the source of problems, and identify possible solutions.

Interviewing Customers

Although a different set of questions may be used to interview customers, the questioning techniques will be similar. However, more emphasis will be placed on product quality and customer needs and wants.

Interviewing: Advantages and Disadvantages

Interviewing is the most costly method of job and work analysis, especially when there are many jobs to be analyzed. For one thing, interviewing occupies two people simultaneously in a single-job analysis, or several in a technical interview or quality review. For another, interviewing takes a lot of time.

Interviewing can be inefficient if the analyst and the interviewee(s) are ill prepared to engage in a meaningful discussion of the work. This can happen if the purpose of the meeting is not explained adequately, if the analyst does not consult secondary sources, or if there is resistance to the job or work analysis underway. What adds to cost is the additional time the job analyst spends organizing notes and actually writing the job description or a thorough workflow study. However, the benefits from accurate job descriptions, improved quality, cost savings, efficiency, and enhanced communication often far outweigh the costs involved in the interview method.

Questionnaires

When many jobs are to be analyzed, questionnaires often are used in place of interviews. Questionnaires are interviews on paper. They set forth a list of questions that attempt to capture the same information that would be pursued in a one-on-one interview.

Questionnaires are flexible because they can be tailored to the job population being analyzed, especially when the nature of the work is very different. For example, a questionnaire for production jobs most likely would be modified for professional jobs and further modified for executive-level jobs. Such questionnaires are great devices for preparing a job incumbent for an interview. By sending the incumbent a questionnaire a week or so ahead of the actual interview, the chances of a successful interview are increased greatly because the incumbent has a chance to think through the questions and to gather relevant materials.

Frequently, when there are a number of incumbents (positions), analysts will select a sample of individuals to interview after they have received the completed questionnaires. Often, a manager will help the analyst in deciding whom to interview. Usually, it is best to interview the most experienced job incumbents, and the best performers. A combination of completed questionnaires and selective interviewing can be a highly effective way of conducting a thorough job analysis, and it can provide the analyst with a solid basis for developing an accurate and complete job description or a thorough workflow study.

Open-Ended Questionnaires

There are essentially two types of questionnaires. For most professional, managerial, and executive-level jobs, an “open-ended” questionnaire is appropriate. It is called open-ended because the questions are structured to allow the job incumbent much latitude in responding—the same technique as used during an interview. The questionnaire form should provide a sufficient amount of blank space for job incumbents to complete their answers. (For an example, see  Figure 10.8 .)

The responses to open-ended questionnaires may be inadequate for a complete job analysis. Frequently, it is necessary to follow up with the job incumbent to clarify or elaborate on responses; this process can be handled easily over the phone.

FIGURE 10.8  Position-analysis questionnaire.

If the majority of the incumbents in the job population being analyzed have weak language and writing skills, their responses will be of limited value. This is why open-ended questionnaires often are not used for lower-level jobs. On the other hand, highly creative incumbents may enhance responses so the analyst believes their jobs have a much greater impact on organizational success than they actually do, or the analyst may not notice redundancies or inefficiencies.

Closed-Ended Questionnaires

Closed-ended questionnaires, which focus mainly on the frequency of tasks or responsibilities, typically are used for lower-level, production-type jobs. They measure simply whether an incumbent has responsibility for performing a certain task, and, if so, how frequently. Two sample questions from a closed-ended questionnaire are shown in  Figure 10.9 .

Closed-ended questionnaires are often designed to be analyzed by computers. The mere fact that a worker does or does not perform a task usually does not address the issues an analyst is trying to uncover in a work-study. The analyst’s goal is to improve efficiency and quality, and questionnaires generally are considered to be of limited use in workflow analysis.

There are highly sophisticated closed-ended questionnaires tailored to specific organizations, and some questionnaires are very effective for job evaluation for most levels in an organization because they are behavioral- rather than task-based. These questionnaires are very expensive to develop, and they are processed using computers and statistical techniques. They, too, do not lend themselves to workflow analysis.

Questionnaires: Advantages and Disadvantages

Because the questionnaire method can be used to analyze large numbers of jobs in the least amount of time, it is considered the most efficient method of single-job analysis. However, questionnaires by themselves often result in incomplete, confusing, or insufficient answers. If the language and writing skills of the population are inadequate, the results will be weak. If the job population being studied includes employees who do not read or write English, the English version of the questionnaire will have to be translated and the answers interpreted, adding to the cost.

Using questionnaires may be a necessary step, but it probably will not be a sufficient step in documenting work for purposes of a quality study. Follow-up interviews, most likely technical interviews, will be required.

FIGURE 10.9  Closed-ended questionnaire.

Source: Materials for WorldatWork Certification Course C2: Job Analysis, Documents, and Evaluation, 2007.

Step 7: Document the Analysis

When data gathering is complete, job documentation already has been created, regardless of the data-collection method or combination of methods used. Notes taken during an observation or an interview are a form of job documentation, as are completed questionnaires.

FIGURE 10.10  Example of a human resources manager job description.

Job descriptions are the most common, complete, and usable form of job documentation because they attempt to record the important aspects of a job in an organized, narrative fashion. (See  Figures 10.10 ,  10.11 , and  10.12 .) Because job descriptions vary from organization to organization, there is no widely agreed-upon format. However, descriptions usually contain the following sections:

FIGURE 10.11  Example of a department administrative assistant job description.

· Heading: Important organizational information is provided here (e.g., title, department, FLSA status, current date, job incumbent, reporting relationships, job analyst, etc.).

· Job Summary: Two to four sentences usually are written to answer a single question: “Why does this job exist?” It is advisable to write the job summary only after the rest of the job description has been written and the entire job— including the required knowledge, skills, and abilities—has been “thought through.”

· Principal Duties: This section lists the major duties and responsibilities of the job incumbent. It can be organized a number of ways: from the most important responsibility to the least important, most time spent to least time spent, or in order of sequence. For lower-level jobs, it is a good idea to indicate the percentage of time spent on each responsibility, making sure the percentages, of course, total 100.

Because of the ADA, “principal duties” should be divided into two subsections: essential functions and nonessential functions. Many organizations include a disclaimer statement such as, “Performs other duties as required.” This type of disclaimer becomes particularly important as organizations expand the content of jobs and provide more lateral experiences for job incumbents. In a union environment, however, the disclaimer statement might not be permitted, and under the ADA it should pertain only to nonessential functions.

· Working Conditions: The physical environment in which the work is performed is described here. Adverse environmental conditions such as noise, heat, and fumes are detailed along with the frequency of exposure. Most professional and executive job descriptions do not include this section because work is assumed to be performed under normal office conditions. If it is not, the section should be included.

· Job Specifications: Commonly referred to as hiring or background requirements, job specifications tell the reader what specific knowledge, skills and abilities a worker needs to perform the job at a satisfactory level. Avoid simply stating, “B.A. or B.S. required.” Instead, list the specific areas of knowledge the incumbent must have, and then conclude (if it is reasonable to do so) that what is listed is “equivalent to a B.A. or B.S.” in a specific subject area.

FIGURE 10.12  Example of a human resources manager, human capital team, job description.

Use the financial analyst job as an example. A specification might read as follows: “This position requires knowledge of accounting, financial analysis and forecasting techniques, as well as quantitative methods acquired through formal education and two to three years of on-the-job application. Also required is computer proficiency in spreadsheet software and word processing, and strong writing and verbal skills to prepare management reports and presentations. Equivalent to a B.A. or B.S. in finance or business administration.”

If the objective of the analysis is the “big picture,” it probably will be necessary to submit a work-study report. The format of such a report will, of course, depend on management’s preferences and the person preparing the report. A work-study report usually includes the job descriptions in an appendix, but the body of the report will describe the workflow, opportunities for improvement, quality pitfalls, inefficiencies, and staffing redundancies or inadequacies. Diagram the workflow and highlight the opportunities for improvements. If appropriate, include recommended team rosters.

Step 8: Obtain Necessary Approvals

No job description is complete without the review and approval of the immediate supervisor. If the organization culture supports it, have the job incumbent review a first draft for accuracy, and then submit the revised version to the supervisor for review and approval. Have the supervisor sign and date the description.

Job documentation should be anchored in time so future readers will know exactly when the analysis was done. If someone other than a trained job analyst prepared the job description, have the human resources department review it for content and format consistency. Most organizations require human resources review of the job description.

Obtaining approval for a work-study report might not be straightforward because the recommendations might point to perceived failures on the part of some departments. However, if the whole initiative was positioned as a team effort with substantial participation from line managers and workers, then the final recommendations (Step 11) should be everyone’s, not just those of the report’s author.

Step 9: Test for Legal Compliance

After summarizing the observation or interview notes—or obtaining a completed questionnaire—ask some questions. Are the job specifications defensible? Does the job content described support the knowledge, skills, and abilities required? Will the job content pass an exemption test under the FLSA?

Throughout the observations and interviews, be aware of equipment or processes that would prohibit a disabled person from performing a particular activity, and determine if that activity is “essential” to the performance of the job. Ask whether the activity is necessary to achieve the end result(s) of the job, or whether it is an “add-on” activity that easily could be reassigned to another worker. While going through this analysis, think of ways a disabled worker could perform the activity with the aid of special equipment or with a schedule change.

If appropriate, have the individual responsible for plant safety review the documentation for compliance with the Occupational Safety and Health Act (OSHA). Also, if the final product is a work-study report that recommends substantial organizational changes affecting people’s jobs—especially if it results in staff reductions—the EEO specialist should conduct a population analysis to determine if any adverse impact will result from implementation of the recommendations.

Step 10: Conduct a Reality Test

In addition to testing the job documentation for legal considerations, it is always a good idea to step back and look at the big picture. Even if the specific mission was only to analyze single jobs and write job descriptions, a good job analyst always questions the work design to identify opportunities for improvement. Are the analyzed jobs designed to meet departmental objectives identified in the secondary sources? Is the flow of work consistent with meeting those objectives efficiently? Are the right workers interacting regularly to ensure quality? Would establishing a team approach greatly improve efficiency? Is there any duplication of effort? Are there enough quality checkpoints? Are roles and responsibilities defined clearly? Do all workers understand their jobs? Are expectations communicated clearly? Are accountabilities understood? Does everyone in the process take ownership of the end result?

These are just sample questions. More specific questions, depending on the goal of the study, also might be required. The ultimate objective is to realize the maximum from efforts to analyze individual jobs and to examine workflow. The most important question is: What specific suggestions or recommendations can be made to management that would improve quality and efficiency, enhance communications, expedite workflow, reduce costs, empower workers, and so on?

Step 11: Formulate Specific Recommendations

If the analyst’s role was limited to single-job analysis for the purposes of job evaluation, Step 11 is not required. However, if the end product is a work-study report, organize the opportunities identified in Step 10 into a final report to the appropriate member of management. Include workflow charts and final job descriptions or team rosters to illustrate recommendations.

Step 12: Keep Up-to-Date

The world is changing constantly. New technology, new products, new markets, and reorganizations make existing job documentation obsolete quickly.

Organizations become bureaucracies when old methods and processes become entrenched. Consequently, these methods and processes need to be reviewed much more frequently than in the past. Initially, the task of conducting job and work analysis and creating job documentation is onerous. However, a comprehensive analysis of all jobs does not need to be repeated every time the organization changes. If a procedure is established for keeping job descriptions and other forms of documentation up to date, a total reconstruction of the job-documentation library is not necessary. Establish a “tickler” file that ages job descriptions so that every two or three years a job description (or questionnaire) can be sent to the incumbent and supervisor for review and comment. Many organizations ask managers and subordinates to review job descriptions annually as performance reviews are conducted. This approach serves the dual purpose of updating the description and focusing both parties on appraising performance on the basis of job responsibilities.

Organizations are reorganizing and creating new jobs continually, and managers frequently approach the human resources department for job re-evaluation. As these events occur, job documentation should be updated. With the powerful word-processing capability that exists today, keeping job descriptions or questionnaires up to date is not as burdensome as it was in the past. Also, there are many software packages on the market that are designed to facilitate the job description and questionnaire process.

When reorganizations occur, processes change, new technology is introduced, or new products are added, the work-study should be updated so opportunities for efficiency and improved quality are not missed. Even if there is no major change, follow-up studies should be scheduled to ensure that the efficiencies and quality improvement initially predicted are occurring.

JOB AND WORK ANALYSIS: WEIGHING COSTS AND BENEFITS

Having a system for managing the job documentation library will ensure that an organization is on top of job and work analysis, and it will strengthen further the organization’s position should it be challenged on the employment-law front. Good job documentation, however, is not simply a preventive measure. It also greatly assists an organization’s efforts to achieve efficiency and quality, and it facilitates the creation of an equitable job-worth hierarchy. Furthermore, job documentation is used in many other initiatives: hiring, training and development, and succession planning, for instance.

Work analysis provides the basis for quality management programs to assess where processes need to be improved through a change in human behavior such as a job redesign and incentive program, or training in new/enhanced competencies. It also helps determine where processes can be eliminated or streamlined. The review should take place at the individual job level, within a department and across functional lines, and it should follow the product or service from raw material to customer usage. In addition, work analysis can assist an organization to determine if certain elements of the workflow should be considered for outsourcing to increase productivity and/or reduce cost.

Initially, job or work analysis appears to be a monumental undertaking, but if approached in an organized way, the effort can yield a tremendous return to the organization over the long term. Perhaps the most important benefit is in improved communications: Job or work analysis can help translate an organization’s strategic plan into specific roles and responsibilities.

JOB EVALUATION

Job evaluation can be defined as a formal process used to create a job-worth hierarchy within an organization. The two basic approaches are market data and job content. The job-content approach can be further broken down into nonquantitative methods and quantitative methods.

The process used for mapping the job process is fairly distinct, and to be a valid and defensible process, each step should feed into the next step. If the job analysis is done properly, it will feed into the job documentation; if the job documentation is accurate and up-to-date, it will help ensure a valid evaluation of the job. When the job is evaluated, it will fall within the job-worth hierarchy of the organization. When each component of this process is correctly completed, all of the necessary information to complete the next component is at hand.

INTERNAL JOB EVALUATION—NONQUANTITATIVE METHODS

Two major objectives of job evaluation are to develop internal standards of comparison and measure relative job values within the organization. For many organizations, the relative value of jobs internally is just as important as external competitiveness.

This may be based on the organization’s compensation philosophy or on a compensation strategy that seeks to ensure that employees feel they are being compensated fairly in relation to their peers, both internally and externally.

The third component of the job-mapping process is to evaluate the job. As stated previously, an organization either can use job content–based evaluation systems or market-based evaluation systems. A job content–based evaluation is a systematic approach designed to help establish the relative value of jobs within a specific organization. The focus of job-content evaluation is on the actual content of the job. Job content can be evaluated using specific, quantifiable measures of job value (quantitative methods) or by other means where no attempt is made to obtain quantitative measures of job value (nonquantitative methods).

The ranking method of job evaluation is the simplest form of job evaluation. Basically, the organization would use a whole job comparison approach and rank order the jobs within the organization from highest to lowest. It is important to note that ranking only gives an organization an indication of how each job fits within the job-worth hierarchy; ranking does not provide any insight as to the relative degree of distance between the various jobs.

Ranking jobs within an organization typically follows three steps:

1. Analyze and document job content.

2. Identify selected groups of jobs (also known as job sets).

3. Rank order jobs within the sets.

The first step with any evaluation process is to determine the job evaluation criterion; by comparing whole jobs, the criterion used is the job itself. The job analysis and documentation steps will provide the organization with a description of the job, which will then be used to compare the jobs with each other. For ranking purposes, the comparison is based on the job as a whole, not its component parts.

The second step in the ranking process is to identify selected groups of jobs (job sets). If the organization has a small number of jobs, all jobs could be ranked at one time; however, this is not always feasible. When an organization has a large number of jobs, they should be broken into groups or job sets. Job sets can be established using any set of criteria (e.g., clerical, supervisory, director, etc.). However, the job sets should assist with the creation of a job-worth hierarchy. The main goal of establishing job sets is to simplify the ranking process, so that one does not need to compare 100 jobs, but 5 sets of 20 jobs, for example.

After the job sets are created, the next step is to rank order the jobs within each set. After each set is ranked, the job-worth hierarchy is established. (See  Figure 10.13 .)

The paired-comparison approach is the second nonquantitative approach. This approach is more effective than ranking when evaluating a larger number of jobs. The paired-comparison approach to job evaluation compares every job to every other job within the organization. Each job is individually compared to every other job and the job that is most valuable from each pairing is noted. The job-worth hierarchy is then established by the number of times a job was selected during the comparison phase. With pair-comparison, it is completely feasible and possible that some jobs could have been selected the exact same number of times; if further ranking is needed for these jobs, whole job ranking can be used.

The paired-comparison approach typically follows the following four steps:

1. Determine number of pairs required.

2. Compare each pair and select the stronger job.

3. Determine the number of times each job was selected.

4. Rank order the jobs.

The first step uses a formula to assist with determination of the total number of pairs required. The formula used is number of pairs × [(number of jobs to be ranked) × (number of jobs to be ranked minus 1)]/2. For example, if an organization had 50 jobs, the number of pairs would be [(50) × (49)]/2 or 1,225 pairs, for paired-comparison.

The second step would be to compare each of the pairs and select the stronger job. Each job will be compared to every other job during this step.

FIGURE 10.13  Job-worth hierarchy using ranking.

Pairs	Selection
Job 1 vs. Job 2	Job 2
Job 1 vs. Job 3	Job 1
Job 2 vs. Job 3	Job 2
Job 3 vs. Job 4	Job 4
Job 1 vs. Job 4	Job 1
Job 2 vs. Job 4	Job 2

The third step of the paired-comparison approach is to determine the amount of times each job was selected during the comparison. Remember, it is possible to have some jobs selected the same number of times. In the example above:

· Job 1 was selected two times.

· Job 2 was selected three times.

· Job 3 was not selected at all.

· Job 4 was selected one time.

The final step in the paired-comparison approach is to rank the jobs and establish a job-worth hierarchy. In the instances that two (or more) jobs have been selected the same amount of times, whole job ranking would determine the hierarchy. Following the example, the job-worth hierarchy of the organization would look like:

· Job 2.

· Job 1.

· Job 4.

· Job 3.

Using the ranking or paired-comparison approach to job evaluation has its advantages and disadvantages. In most cases, both ranking and paired-comparison approaches are easy to administer, inexpensive, and require little training of all the people involved. However, because the jobs are compared “wholly,” several disadvantages exist. One of the most significant drawbacks is the potential of inconsistent judgment across raters. Documentation may not be collected to record differences, so it could be difficult for different evaluators to evaluate the same. Additionally, in cases where the jobs are very similar, important aspects of the job might be over-looked because the details of the job should be ignored.

The final method of nonquantitative job evaluation is the classification method. The best example of classification being used today is in the government. This is a true classification system where jobs are compared on a whole-job basis with predefined class descriptions established for a series of job grades. The jobs then are placed in the classification grouping that best describes the job.

Using the classification approach typically follows five steps:

1. Analyze/document job content.

2. Identify and cluster benchmark jobs.

3. Develop preliminary generic definitions.

4. Compare jobs to definitions.

5. Assign remaining jobs to classification levels.

First, the job analysis and documentation steps will provide the organization with a job description that will be used to compare the jobs with each other. For classification purposes, the comparison is based on the job as a whole, not its component parts.

The second step is to identify benchmark jobs that appear to be similar and cluster them. The similarity used is typically an aspect of the job—nature, scope, or level. This will enable the evaluator to note the similarities and provide that information for the next step.

The third step is to develop preliminary definitions of each cluster. These definitions will be the basis for the generic comparison factors used in classification. This step defines the classification levels or pay grades.

The fourth step is a review step. In the classification model it is important to review the job clusters and ensure that the preliminary definitions match the jobs within the clusters. If they do not, benchmark jobs might be moved to a cluster that better represents the job, or the preliminary classification levels can be adjusted to match the jobs within each level.

The final step is to slot the nonbenchmark jobs into the classification levels. Typically this step is done by comparing the nature, scope, or level of each non-benchmark job to the classification levels that best fit. This final step ensures that a job-worth hierarchy is created with all jobs in the organization.

INTERNAL JOB EVALUATION—QUANTITATIVE METHODS

As opposed to nonquantitative methods of job evaluation, quantitative methods use measures that lend themselves to precise definition and assessment, with very little room for variability of data. When conducting a quantitative job evaluation, it is important to ensure that the factors selected to determine job value do not discriminate against a specific group or class of employees. Additionally, it is important to balance complexity and/or flexibility of a given method against the needs of the organization. This section will discuss the selection and definition of compensable factors.

Compensable factors are the key to quantitative methods of job evaluation. They can be defined as:

· Any criterion used to provide a basis for judging job value in order to create a job-worth hierarchy.

· The elements used to measure a job’s worth.

· Intrinsic elements in jobs that add value to the organization and for which it wants to pay.

Generic compensable factors are skill, effort, responsibility, and working conditions. These generic factors are outlined in the Equal Pay Act of 1963 as the key criteria for determining whether jobs are substantially equal and thereby requiring equal pay.

Most organizations that use quantitative methods of job evaluation use a derivation of the four generic compensable factor groups, which are also known as the level of work. Typically each group is further divided to determine the true worth of the job.

The first generic factor, skill, usually requires a short description when used in a job evaluation plan. This is because skill factors include:

· Experience—which typically relates to actual experience performing the job, either gained through the employer or through previous employers.

· Knowledge—refers to the educational knowledge needed to perform the job. This usually is the minimum knowledge needed to perform the job.

· Manual dexterity—relates to specific movements required.

· Analytical ability—if the job requires the incumbent to analyze, decipher, or explore other possibilities.

· Creativity—typically found in jobs of a creative nature (web design, graphic design, marketing manager, advertising).

· Communication.

· Verbal—refers to the level of verbal communication needed to perform the job (a phone customer service representative may require a higher level of verbal communication than a janitor).

· Written—refers to the level of written communication needed to perform the job (a journalist would need a higher level of written communication than a cashier).

· Complexity of the job—defines the overall use of specific skills needed to perform the job. It is important to note complexity of the job does not always relate to the level of the job; a machinist job could potentially be more complex than an administrative assistant.

The effort factors usually refer to:

· Physical demands of the job—how much exertion is need for this job (lifting, walking, running, sitting).

· Mental exertion required—relates to the amount of mental effort required to perform the job. This could contain both decision making and/or concentration.

Responsibility factors include:

· Supervisory duties—how many direct reports the position has could potentially place the job higher within the job-worth hierarchy.

· Budget—the amount of budgetary responsibility the incumbent has could reflect a higher position within the hierarchy.

· Decision making—this typically relates to the impact of the decisions made to the organization.

· Accountability—refers to the amount of liability the incumbent has on decisions made.

· Impact job has on the organization—how important is the incumbent’s position to the organization.

Working conditions refer to:

· Hazardous environment—refers to the amount of time an incumbent could be exposed to potentially hazardous conditions in the workplace.

· Temperature conditions—relates to the variance of temperature an incumbent might face (e.g., for a person who works on a fishing boat, the day could be sunny or rainy or cold or warm).

· Odors—what adverse odors might an incumbent be exposed to (e.g., smells that could be generated in smelting plants).

· Loud noises—will the incumbent be exposed to loud noises, and how long in duration will the noises last.

· Or lack of hazardous environment—refers to incumbents who are not exposed to potentially hazardous conditions (office environment).

When evaluating a job on the generic factor groups, each group is divided into specific factors. Factors can be defined as an individual component aspect of job content within the generic factor groups. For example, analytical ability is a factor of the skill generic factor group. (See  Figure 10.14 .) Additionally, each factor would be measured in varying degrees on levels of complexity.

When conducting a job evaluation, it is important to select the appropriate compensable factors for the organization. For example, the service industry might determine that the working conditions factor does not really apply to its industry, whereas, the manufacturing industry would place high importance on working conditions. In determining which factors would best fit the organization, it is vital to identify the organization’s internal values. What does the mission statement say? What about the business strategy? These will help the evaluator determine what is important to the organization, and therefore which factors would most support the stated mission and strategy. Going back to the service industry example—if the strategy of the organization is to provide the best customer service while responding to customer inquiries in an efficient, timely manner—the skill generic factor group would be very important, and the communications factor would appear to be vital. Determining the strategy of the organization will help in selecting compensable factors.

The next step in selecting compensable factors is to review the job content of the work group to be evaluated. This is an important step because it will help establish what factors are important to each work group, thus helping to establish an organization-wide evaluation system. Typically, one would examine the results from the job analysis and job documentation relating to each work group. When analyzing each work group, common characteristics usually surface. Additionally, unique aspects of each job or the diverse characteristics of the jobs should be noted.

To use the service example: If the call center work group were reviewed, it would be important to review aspects of the job. For example, how often do they talk on the phone to customers? What about e-mail? How much product knowledge is required? Is there a need for physical exertion? All of these observations/questions will help in determining which factors need to be considered.

When selecting compensable factors, is there a limit on the number of factors to be used? It is important to include enough factors to establish a value differential. That is, if too few factors are selected, it will be difficult to gauge a difference in the value of each job; if too many factors are selected, it will be too administratively burdensome to conduct the evaluation. Usually, 5 to 12 factors should be brought to upper management to determine which ones best reflect what the company values. Bringing the factors to upper management and asking for assistance on the selection process will add the buy-in component to the process. This will help with obtaining management support and stakeholder acceptance.

FIGURE 10.14  Terms—generic factor group: skill.

After receiving input from upper management, the next task is to determine the specific factors to be used. Effective factors should:

· Differentiate job value. For purposes of internal job evaluation, measuring the same of similar job characteristics more than once should be avoided.

· Have a logical relationship to overall job value to the organization.

· Cover all major aspects of job requirements for which the organization is willing to pay.

· Be manageable. It is important to limit the factors used to a reasonable number.

Failure to consider these factors increases administrative time without adding meaningful information and may create systemic bias for (or against) certain jobs. During this process, it is vital to include all important factors. If any important factors are not included, there may be an inadvertent discrimination for (or against) certain jobs, or it may produce a job-worth hierarchy inconsistent with internal values.

After the compensable factors have been selected, the next step is to define the factors. This basically means to develop a clear and comprehensive definition for each factor and define the highest and lowest levels of each factor present in the work group to be covered by the plan. (See  Figure 10.15 .) After the highest and lowest levels are determined, the intermediate levels can be identified, typically in a lowest to highest progression using a logical approach. This ensures that the factors reflect reasonable differences.

Because the goal of compensable factors is to establish a job-worth hierarchy that is consistent with management’s perception of relative job worth, selecting the correct compensable factors is important. The appropriate number of factors and the corresponding levels will assist in construction of the job-worth hierarchy. If too many levels are selected, it may force artificial distinctions between degree levels, as well as increase administrative time. Additionally, having too many levels would require highly detailed job documentation; this increases the possibility of additional requests for re-evaluation of jobs, which, in turn, may result in “grade creep.” If too few levels are selected, it may not fully cover the range of work performed and not adequately differentiate important aspects of job value.

FIGURE 10.15  Factor definition and levels: mental/visual strain and fatigue.

Overlapping levels is another issue to consider. With overlapping levels, it becomes difficult to select the correct level for the job because the adjacent level descriptions are too similar.

Weighting is the final step concerning compensable factors. In this step, weights are based upon the value of each compensable factor to the organization. The more a factor drives the organization’s business strategies and objectives, the higher is the weight value associated to the factor. For example, in a call center environment, factors relating to skill and communication will carry more weight than a factor relating to hazardous work environment. (See  Figure 10.16 .) Determining how much more value the communication skill has versus the hazardous work environment is a very important step in the process.

When establishing the weighting of the factors, it is very important to consider the nature of the work performed by each job group and the appropriate measures. The next step is to rank them in order of importance to the organization. (Please note: This process refers to the larger factor and not the degrees within each factor.) After the factors are rank ordered, the initial factor weights need to be developed. The process of developing the initial factor weights could encompass statistical analysis and/or management judgment. The last step in this process is to review the weights with key management and stakeholders and make any changes as required.

FIGURE 10.16  Call center environment.

The factors and the weights potentially could vary by job group, depending upon the organization’s business strategy. In cases where the factors and weights would vary, this process would be repeated for each job group, based upon the nature of work from each job group.

INTERNAL JOB EVALUATION—POINT FACTOR

A factor comparison method is one of the most commonly used methods of internal job evaluation. It values specific aspects of the job and compensable factors, and assigns a weight and level to that job.

The point factor method, which assigns point totals to each compensable factor, is the most widely used method of factor comparison.

It started in the mid-1930s when Edward Hay began development of one of the first point factor plans. He first installed a job-evaluation program in a bank in the 1940s. He went on to found Hay & Associates in 1943 and continued work on this evaluation methodology. In the 1950s, organizations using this methodology wanted Hay to develop a linkage between internal equity and market pay. Hay was the first to make this linkage through market surveys based on job content versus title matches that were the prevailing practice at the time. Today, this methodology is the most broadly used in the world, with linkages of job evaluation to market pay in more than 40 countries. (See  Sidebar 10.1 .)

Sidebar 10.1 : Hay Point Factor Plans

The Hay Guide Chart Profile Method of job evaluation is considered the benchmark of point factor/factor comparison job-evaluation plans. In the mid-30s Edward Hay began development of this method to determine how to value jobs based on common compensable elements of job value. The Hay plan today typically contains three to four factors (the fourth factor, working conditions, is most typically applied when evaluating nonexempt jobs):

1. Know-how is defined by using the following critical areas of applied knowledge and skill:

a. Technical

b. Managerial

c. Human relations.

2. Problem solving is defined by the following criteria:

a. Thinking environment

b. Thinking challenge.

3. Accountability is defined by the following criteria:

a. Freedom to act

b. Magnitude

c. Impact.

4. Working conditions is defined by criteria such as:

a. Physical effort

b. Working environment

c. Sensory attention

d. Physical risks.

In addition, a unique characteristic of the Hay method is that it incorporates a principle called profile where the weight and relationship of the factors is indicative of the size and nature of the job. For example, accountability is the most important factor for a top executive position, while know-how is weighted more heavily for an entry-level professional. Further, accountability is weighted more heavily than problem solving for line jobs and the reverse is true for research jobs.

The Hay method is the first one to make the linkage of internal job value to external market value through surveys that utilize job content in addition to job titles and organization size as the fundamental criteria for market pricing.

As stated, factor comparison models value jobs based upon specific compensable factors and the importance of those factors to the organization. In the beginning, factor comparison models were entrenched in statistics and mathematics. Many organizations felt these models were very accurate, but extremely difficult to administer and even more difficult to communicate. As factor comparison plans evolved, point factor plans came to the forefront to solve these administration and communication problems, and are one of the most prevalent internal job-evaluation methods.

Point factor plans can be defined as a quantitative form of job content evaluation that uses defined factors and degree levels within each factor (usually five to seven levels, also defined). Each factor is weighted according to its importance to the organization. Job content descriptions are compared to definitions of the degree levels and the corresponding points assigned to the appropriate level are then awarded to the job and summed for all factors to determine the total job score. The total scores are used to create a job-worth hierarchy.

Although organizations have the ability to purchase off-the-shelf versions of point factor plans, some organizations create and use their own version. Designing and developing a customized point factor plan may not be as difficult as one might think, and custom designing a plan that fits the organization can produce a plan that better reflects the organizational values than an off-the-shelf version.

One of the first steps involved in developing a point factor plan is to select and weight the compensable factors that most reflect the organizational strategy. The weighing process would entail defining the factors and degree levels within each factor—each factor should be weighted as a percent, with all factors equaling 100 percent. This process is very important in ensuring that what the organization values will be used to establish the job-worth hierarchy. For example, in a call center environment, if the factor of adverse temperature conditions is selected and assigned a high weight, most employees would receive a lower score because adverse temperature most likely would not be encountered in a call center.

FIGURE 10.17  Weighing compensable factors.

In  Figure 10.17 , the organization has deemed that skill (62.6 percent) is the most important generic factor, and independent judgment (18.3 percent) is the highest-rated factor. It also appears that the jobs covered under this plan have a significant amount of supervision responsibility (12.8 percent), whereas they would not have a lot of supervision. Based upon the distribution of points, this plan was designed for a position group with the following characteristics: (1) high level of education and work experience; (2) high level of analytical ability; (3) high level of independent judgment; and (4) high level of supervision. This could be a financial, accounting, or managerial position.

The next step would be to determine the number of degree levels and assign points to each of those levels. This step adds complexity to the development process. Typically you assign points to the structure by dimension and progression. Dimension refers to the number of factors with which each point relates. Progression refers to the way the numbers increase as the level increases.

There are two ways to look at dimension: single and multiple. Single-dimension factors relate to instances when the factor is dependent on only one variable (e.g., years of experience). (See  Figure 10.18 .)

Multiple-dimension factors relate to when the factor is dependent on multiple variables (e.g., business judgment is dependent on both decision making and scope). When multiple-dimension factors are used, each subfactor must be evaluated as it relates to the main factor. (See  Figure 10.19 .)

As with dimension, there are also two ways to look at progression: arithmetically and geometrically. With arithmetic progression (typically used in the single-dimension factor approach), each level of the dimension receives a number. (See  Figure 10.20 .) The increase between levels could be as simple as 10, 15, 20, etc. With geometric progression (typically used in the multiple-dimension factor approach), each level receives a percent increase over the previous level. (See  Figure 10.21 .) As a percentage, the points assigned to each dimension progressively increases, thereby allocating more points for increasing knowledge.

After the point factor plan is constructed, the next step is to begin evaluating the jobs within the organization. In order to get an accurate evaluation of jobs within the organization, accurate job analysis and documentation must be completed. It is important that all job descriptions are both up-to-date and jobs are described in terms of the selected compensable factors. If the job descriptions are up-to-date but not in a format that is usable for evaluation, the jobs either will be difficult to evaluate or lead to an inaccurate job-worth hierarchy. (See  Figure 10.22 .)

FIGURE 10.18  Single-dimension factor.

FIGURE 10.19  Multiple-dimension factors.

With the evaluation process, each job (job description) will be compared to the degree definitions. The process of evaluating jobs entails looking at each job’s compensable factor and comparing that to the compensable factors in the point factor plan. (See  Figure 10.23 .) For each of the compensable factors defined in the plan, the role of the evaluator is to determine which degree definition of each factor best fits the job and assign the respective point values. When the process is completed, each job will have a total number of job evaluation points. These points will then be used in creating the job-worth hierarchy.

Arithmetic progression.

FIGURE 10.21  Geometric progression.

FIGURE 10.22  Job description.

It is important to note that there is always some inherent bias in any system used to evaluate jobs. As several different evaluators review the same job, it is possible (even likely) that some jobs might receive different point totals. If the job descriptions were written so that they reflect the compensable factors listed on the point factor plan, some of the differences could be eliminated.

Regarding  Figure 10.22 , based upon the job description and review of the position, the position of course developer is worth 546 points out of a total of 862 points. This position’s location on the job-worth hierarchy would be higher than those with fewer than 546 points and lower than those with 547 points or more. But what exactly does this mean to the organization? How does one determine how much to pay a course developer with 546 points? What about someone with 347 points? How does point factor equate into a grade/midpoint structure?

As stated earlier, point factor plans will help an organization with the development of an internally driven job-worth hierarchy. After each job is evaluated and point totals are assigned to each job, a hierarchy can be established.

FIGURE 10.23  Job evaluation plan: professional and technical employees.

FIGURE 10.24  Job-worth hierarchy (point totals).

Remember, when utilizing a job-worth hierarchy based upon internal evaluation, the hierarchy will be established based solely upon organizational criteria and organizational value. These values and placements might not reflect what the market is paying, but how the organization values the positions. In  Figure 10.24 , the buyer is a highly valued position within the organization (higher than the manager of finance). If the organization does a market analysis on the positions within the organization, they might find a buyer position is valued much lower in the marketplace. These discrepancies are common when using internal valuation over external valuation. The key to making this successful is to have a solid structure and be confident in the plan used to value these jobs.

To determine the appropriate way to pay a position once the hierarchy is established, an organization can take several approaches. Most often, organizations market price benchmark jobs and determine a “dollar/point” value using a statistical technique called regression analysis (more on this later). Other methods would be to utilize consultants, government sources, or any other mean to establish a dollar/point value.

FIGURE 10.25  Regression analysis.

Using market data might seem a little strange, as the entire idea behind using a point factor plan is to value jobs internally, without regard to external data. This is true; in fact, before market rates are added to the system, the jobs are evaluated based upon the compensable factors used within the point factor plan. Because each job is assigned a point value, and each job is slotted in the hierarchy based upon that value, the market position of the various jobs should not alter the positioning of these positions.

FIGURE 10.26  Groupings (or clusters).

The first step in conducting a market pricing analysis would be to determine the benchmark jobs within the organization. A benchmark job can be defined as jobs that closely resemble other jobs performed in other organizations and/or across industries. A benchmark job should:

· Be well represented in the marketplace.

· Be important in the organization’s internal hierarchy.

· Represent many organizational levels or grades in the salary structure utilized by the organization.

· Be matched to 70 percent or more of the duties found in the survey jobs.

· Generally have multiple incumbents (with the exception of managerial and executive-level positions) with an organization.

After the organization collects and analyzes market data for the benchmark positions, the next step is to perform regression analysis on the data collected. Regression analysis is the statistical method in which a straight line is created depicting a model of a Y (dependent) variable as a function of one or more X (independent) variables using the method of least squares. (See  Figure 10.25 .) Regression analysis allows the evaluator to create a base pay policy line. This line will be used to determine the dollar/point value. For point factor examples, the Y (dependent variable) will always be market rates (salary) and the X (independent variable) will always be the job points. The simplest way to calculate a regression line would be to use a spreadsheet program that will calculate the value for you (Excel can do this calculation once the Data Analysis ToolPak is activated).

Based upon the equation in  Figure 10.25 , the course developer (545) in  Figure 10.22  would be worth approximately $50,286.50:

Salary = (78.9)Points + 7286

Salary = (78.9)545 + 7286

Salary = 43,000.50 + 7286

Salary = 50,286.50.

How does point factor relate to grades and midpoints? Point factor plans can be used in typical salary structure environments, grades and midpoints, or they can be constructed to have each point be its own grade. Typically with point-type hierarchies, there are two methods used to place a job into a grade. The first method would be to place jobs into grades prior to the market rate analysis. With this method, right after the job-worth hierarchy is constructed, the evaluator will look for groupings (or clusters) of points and use those groups as initial grades. (See  Figure 10.26 .)

The second method would be to conduct the market analysis of the positions, establish the grade structure and slot the positions into the grade that has the closest midpoint. (Although this is a simplified explanation of the process, this is what typically happens in a market pricing environment.)

Another way that point factor plans can utilize a structure would be if each point total had its own minimum, midpoint, and maximum. Although having 862 grades (as in the example of course developer) would appear to be an administrative nightmare, it really is not. With today’s technology and the use of spreadsheets, it is relatively easy to set up this sort of structure, and when the structure moves, the formulas can be entered to automatically adjust when one structure is adjusted.

As mentioned previously, it is important to ensure that job documentation (i.e., job descriptions) is used appropriately to accurately reflect the responsibilities of the job and to accurately place the job within the hierarchy. Job evaluation systems, in general, if not managed properly, can lead to both level creep and job description inflation.