***Mathguy 18*** Unit 3 Compensation and Benefits

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Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:

1. Explain how to perform a job analysis. 1.1 Discuss the importance of a job analysis. 1.2 Determine the information that should be collected in a job analysis. 1.3 Explain the connection among job analysis, job description, and job specification.

2. Develop a pay survey and a pay structure.

2.1 Explain job evaluations and what they are used to determine. 2.2 Distinguish among the three most common job evaluation methods. 2.3 Contrast skill-based structures and competency-based structures.

Reading Assignment Chapter 4: Job Analysis Chapter 5: Job-Based Structures and Job Evaluation Chapter 6: Person-Based Structures

Unit Lesson For a minute, consider this example: J&P Services, a human resources consultant firm, has a client with a 45% turnover rate in production over the past 12 months. After reviewing the resignations, it was determined the length of stay has only been about 7 months. This has caused the company a great loss in terms of productivity and revenue. Based on these results, the consulting firm decided to conduct an analysis. The analysis consisted of interviewing those employees who had resigned in an effort to find out the reason for their resignations. The findings showed that many of the employees were hired to do one thing; oftentimes, however, they ended up doing something totally different. The employees displayed frustration due to lack of training and feared for their jobs. A review of training records indicated the company was over budget for the last two years. The consultant questioned management about these concerns, especially why it was so difficult to match job duties/requirements with employee skills. It was determined that no one in management or HR had taken the time to see what each job consisted of. As with many companies, this company did not take the job analysis process seriously; therefore, they faced tremendous turnover, high training costs, and low productivity and revenue. As you look at this example, you should be better prepared to understand the content of this unit as you cover Chapters 4, 5, and 6. Chapter 4: Job Analysis Job analysis is a systematic method that focuses on describing the differences and similarities among jobs within an organization.

UNIT III STUDY GUIDE

Job Design

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In an effort to produce accurate job descriptions, a job analysis should be done. Job analyses are valuable when determining internal pay structures. Many employees look to receive equitable pay. Conducting job analyses can help companies establish equitable pay, which in turn leads to satisfied employees and organizational goals being accomplished. When looking at the pay, a compensation specialist must look at internal factors and external market forces. Companies strive to have a balance by being able to retain and attract quality employees while providing pay equity and achieving company goals. You may ask, is this really possible? Can an organization keep employees satisfied while creating a pay structure that is aligned with the work performed as well as the organization’s structure and its strategies? How can such alignment occur? Do companies really look at outside/external factors when determining pay structures? If all of this is really possible, what methods will be used to collect the data needed? What determines who will be involved in the job analysis process? How reliable and valid is a job analysis? When you dive into Chapter 4, you will find answers to the questions above.You will also understand the connection between job analysis, job description, and job specification. Chapter 5: Job-based Structures and Job Evaluation This chapter describes the process, techniques, and methods used to evaluate jobs to build a job-based internal pay structure. The focus is on what to value in jobs, how to assess that value, and how to translate it into a job-based structure. Job evaluation is a process for determining the relative value of jobs (Milkovich, Newman, & Gerhart, 2014). Within this chapter, it is very important to make certain you do not get job evaluation confused with performance evaluation. There is a distinct difference among the two. Job evaluation focuses on the job; whereas, performance evaluation focuses on the person performing the job duties. Understanding job based- structures and job evaluations are very important because they help to determine the worth of a job. You may ask, what is meant by job worth? Job worth simply means if there is a need for the job or if the job can be eliminated. How important is the position to the success of the organization? Pay structures are also created and/or changed based on the various job-based structures and job evaluation methods. As an HR professional, having an understanding of these methods can make your job a lot easier. Chapter 6: Person-based Structures This chapter describes the processes, techniques, and methods used to evaluate jobs to build a person- based internal pay structure. In today’s new work culture, employees are told that they must go beyond the tasks specified in their job descriptions. Pay systems that support continuous learning and improvement, flexibility, participation, and partnership are claimed to be essential for achieving competitive advantage in the global environment. Person-based structures provide promise. The logic supporting these approaches is that structures based on differences in people’s skills or competencies will be more flexible and will encourage agility (Milkovich, et.al., 2014). The two approaches to building a person-based structure are skill-based and competency-based. Similarities in the logic underlying job-based versus people-based approaches are highlighted. The chapter concludes with a discussion on the usefulness of the various approaches—job- and person- based—for determining internal structures (Milkovich, et.al., 2014). Gaining an understanding of each of these chapters will allow you to have an in-depth understanding of what management looks at, and/or should look at, when determining the structure of a position. It also provides a process that can be utilized within any organization to develop a job analysis, conduct job evaluations, and determine if a job-based or person-based approach is best when determining the internal structure.

Reference Milkovich, G. T., Newman, J. M., & Gerhart, B. (2014). Compensation (11th ed.). New York, NY: McGraw-

Hill/Irwin.

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Suggested Reading Click here to access the Chapter 4 PowerPoint Presentation. Click here to access a PDF of the presentation. Click here to access the Chapter 5 PowerPoint Presentation Click here to access a PDF of the presentation. Click here to access the Chapter 6 PowerPoint Presentation. Click here to access a PDF of the presentation.

Key Terms

1. Classification 2. Competency-based system 3. Job analysis 4. Job description 5. Job evaluation 6. Job specifications 7. Job-based structured 8. Point method 9. Quantitative job analysis

10. Ranking formats 11. Reliability 12. Skill analysis 13. Skill-based 14. Validity