HRMG4020 Compensation and Benefits Fall 2024 PDF

9/10/2024 HRMG4020 – Compensation and Benefits CLO2: DESIGNING COMPENSATION STRUCTURES: INTERNAL CONSISTENCY 11th Canadian Edition Milkovich, Newman, Cole...

9/10/2024 HRMG4020 – Compensation and Benefits CLO2: DESIGNING COMPENSATION STRUCTURES: INTERNAL CONSISTENCY 11th Canadian Edition Milkovich, Newman, Cole 1 Learning Objectives 2.1 Summarize the steps involved with job analysis CLO 2.0 Apply knowledge of job analysis/ job 2.2 Interpret job design evaluation, budget and performance 2.3 Classify the steps involved with management tools to design and conducting a job evaluation develop suitable compensation strategies; 2.4 Explain the importance of the labour market to an organization’s compensation structure 2 1  9/10/2024 Vocabulary Usefulness Skill block Benchmarking Job Design Skill grid Internal Consistency Job Sharing Skill certification Equity Flex Time Job-Based Compensation Structures Telecommuting Person-Based Compensation Structures Technology Stress Job Analysis Job Re-Design Reliability Job Evaluation Validity Pay compression Acceptability Unconscious bias 3 Benchmarking and Compensation Structures 4 2  9/10/2024 What is Compensation (or Salary) Benchmarking? Salary benchmarking, also called compensation benchmarking, is a process by which compensation professionals match internal jobs and their descriptions to similar jobs and descriptions in a salary survey or other source of market pay data, in order to identify the market pay rate for each position – salary.com 1. Build a list of salary ranges 3. Figure out maximum & 2. Set salary ranges for current & future jobs minimum salary ranges 5 Pros & Cons to Salary Benchmarking PROS CONS ❖ Helps organizations stay competitive as salary ❖ Job descriptions can be difficult to match to survey information provides a glimpse of industry information, making comparisons competitor practices re: total rewards inaccurate ❖ Justifies changes to senior management re: ❖ Time consuming for organizations to conduct changes to compensation and/or benefits ❖ Costly as organizations need to purchase ❖ Provides solid information for organizations salary information during salary negotiations, employment contract negotiations etc. ❖ Industry may not be represented (i.e. niche market) ❖ Assists with the budgeting process as organizations have a sense of how total ❖ Not all organizations participate, so the rewards are changing (i.e. 3% salary increase information provided may be incomplete expected in 2021) 6 3  9/10/2024 Compensation Strategy: Internal Alignment/ Equity/ Consistency Before we can compare our company’s pay structure to what our competitors have, we need to look at Supports Organization what our company currently offers employees. Strategy Supports Workflow Internal Equity = comparing positions within your organizations to ensure fair pay. Motivates Behaviour 7 Internal equity example Horizontal (Across departments) Department A Department B Department C Vertical (within the departments) Position Salary (QR/month) Salary Salary (QR/month) (QR/month) Secretary Level 1 5,833 QR 6,067 QR 6,767 QR Secretary Level 2 7,000 QR 7,233 QR 5,833 QR Secretary Level 3 8,167 QR 8,400 QR 11,667 QR 8 4  9/10/2024 Your Turn… Where are the disparities (inequities)? Position Department A Department B Department C Junior Accountant 8,500 QAR 9,000 QAR 7,000 QAR Mid-Level 12,000 QAR 11,000 QAR 10,500 QAR Accountant Senior Accountant 16,500 QAR 18,00 QAR 17,000 QAR 1. What factors might contribute to the salary disparities (inequities) for the same roles across different departments? 2. How can these inequities affect employee motivation and productivity? 3. How could an organization justify paying lower salaries for similar roles in certain departments? 4. How could these inequities lead to legal or ethical issues within the organization? 5. What strategies could the HR department implement to address these challenges? 9 Internal Consistency / Equity ADVANTAGES DISADVANTAGES ❖ Provides assurance to employees that they will be ❖ Restricts management from making exceptions for someone if trying to hire out of the “normal” range treated fairly and consistently based on their skills, abilities, knowledge, and experience rather ❖ Employees’ may view their total rewards as not than other factors (i.e. bias) matching their personal opinion of the value they provide to the organization ❖ Provides reliable information should there be a ❖ Lack of understanding by senior management on the lawsuit re: pay equity (reduced exposure to importance of pay equity (i.e. family business) discrimination) ❖ Lack of knowledge by HR re: job tasks, so jobs are classified poorly ❖ Important in a team structure as they work closely together. Having teams at a similar rate of ❖ Pay compression - when a worker has been with the company for years (decades), and is not pay assists cohesion. promoted/transferred/demoted. New hires are brought in at higher rates, causing internal conflict 10 5  9/10/2024 Bias in Internal Consistency / Equity ❖ Unconscious bias are social stereotypes that are learned which are automatic, unintentional, deeply ingrained, universal, and able to influence behaviour. ❖ Pay gaps often occur in the early stages of talent acquisition, with recruiters asking “how much did you make at your last job?” – what happens if that person has been underpaid? This question could widen the pay gap further ❖ As well, job ads can influence the gender disparities “aggressive, independent” (male) vs. “caring, team-oriented, nurturing” (female) – can also influence internal equity ❖ Performance- related bonuses or incentives can also create bias in internal compensation structures (i.e. when are performance reviews conducted as females traditionally tend to have child care obligations); is the manager asking more from one person in a job vs. another? Note: As of 2024, Women make 84% of what men make. It will take an additional 131 to 134 years to close the gender pay gap (achieve full parity) Visible minorities make 63% of what Caucasians earn. People with disabilities make 70% of what non-disabled workers make. - Source: World Economic Forum 11 Key Components of an Internal Pay Structure Job Descriptions: Detailed documentation of job responsibilities, duties, required skills, and qualifications. Job Analysis and Documentation: Job Specifications: A clear outline of the knowledge, skills, and abilities (KSAs) necessary for a specific job. Job Ranking: Arranging jobs in order of their importance or value to the organization. Point-Factor Method: Assigning point values to various job elements (e.g., skill, effort, responsibility) to Job Evaluation: quantify the relative worth of different jobs. Classification/Grading: Grouping jobs into classes or grades based on similarities in duties, responsibilities, and qualifications. Pay Grades: Grouping similar jobs together into a single category with a common pay range. Pay Grades and Pay Ranges: Pay Ranges: Establishing minimum, midpoint, and maximum pay levels for each pay grade to provide a range within which employees can be compensated. Ensuring that employees are paid fairly in relation to their colleagues within the organization. This involves Internal Equity: maintaining horizontal equity (similar jobs with similar pay) and vertical equity (different levels of responsibility with corresponding pay differences). Benchmarking: Comparing internal pay rates to external market rates to ensure competitiveness. Market Comparisons: Salary Surveys: Collecting and analyzing data from similar organizations to inform pay decisions and adjustments. Skill-Based Pay: Compensating employees based on their skills, competencies, and contributions. Pay Differentials: Shift Differentials: Providing additional pay for working less desirable shifts (e.g., night shifts). Developing guidelines that outline the principles and practices for determining employee compensation, Compensation Policies: including policies on promotions, bonuses, and raises. 12 6  9/10/2024 Importance of an Internal Pay Structure Fairness and Equity: Motivation and Organizational Legal Compliance: Transparency and Promotes a sense of Retention: Effectiveness: Helps organizations Communication: fairness among A well-defined pay Aligns employee comply with labor laws Enhances transparency in employees by ensuring structure can motivate compensation with the and regulations related to compensation practices, that compensation is employees by providing organization's strategic fair pay practices, such as enabling better based on objective clear pathways for career goals, ensuring that the Labour Law 14 of 2004, communication between criteria rather than progression and financial workforce is effectively Arab Charter of Human management and subjective judgments. rewards, thus aiding in incentivized to achieve Rights, and anti- employees regarding pay retaining top talent. desired outcomes. discrimination laws. decisions and career development opportunities. 13 Three types of Pay Structure Formats Job-Based Pay Structure (most common) Person-Based Pay Structure Competency-Based Pay Structure 14 7  9/10/2024 Job-Based Pay Structures Relies on the work content only and ignores all other skills they may possess. A more traditional pay structure. Each position is assigned a pay range based on job duties and the only variance in pay is based on education and seniority. ◦ Pros: ◦ Cons: ◦ Transparency: The pay system is easy to ◦ Limited flexibility: These structures may understand, and employees know how their not account for individual performance, pay is determined based on their role. skills, or market changes quickly enough. ◦ Fairness: By basing pay on the job rather ◦ No incentive to grow: There is little than individual characteristics, it reduces incentive to gain new skills. potential biases. ◦ Retention issues: some people get ◦ Control over costs: Organizations can frustrated when they see they have manage payroll expenses by setting clear worked hard to become a better salary ranges for specific job categories. employee when colleagues who haven’t tried earn the same pay. They may leave. The engineer’s job description: “The limited use of basic principles and concepts. Develops solutions to limited problems. Closely supervised.” 3-15 15 Job-based compensation structures Internal Pay Structures An internal pay structure is defined by: 1. The number of levels of work 2. The pay differentials between the levels 3. The criteria used to determine those levels and differentials 3-16 16 8  9/10/2024 What is an Internal Pay Structure? Definition: An internal pay structure refers to the arrangement of different pay rates or levels (or grades) that determines how employees are compensated relative to one another based on their job roles, responsibilities, experience, skills, and performance. Goal: The goal is to ensure fairness, equity, and consistency in employee compensation, while aligning compensation with the organization’s overall strategy and goals. 17 Job Structure (aka Job Family) for an Engineer 1 2 3 4 5 6 18 9  9/10/2024 1. Number of Levels Pay structure is hierarchical in nature, based on: ◦ Number of levels ◦ Reporting relationships How many levels for the Engineer Job Family? How many levels in the Career Bands listed below? Exhibit 3.2 – Career Bands at GE Healthcare 3-19 19 2. Pay Differentials Differentials: pay differences between levels Pay that is determined by: ◦ Knowledge/ skills involved ◦ Working conditions ◦ Valued addition to the company Percent differentials can be paired with different pay level policies ◦ i.e. for each language a person is fluent in, they receive an additional 2% in salary ◦ i.e. each time a person goes through training, they gain a 5% increase to salary. ◦ i.e. if a person works outside in extreme heat or cold, they are paid more than those people in the same job who stay inside 20 10  9/10/2024 2. Pay differentials Calculate the Pay Differentials: Job Salary/Month Pay Differential Pay Differential (%) (QR) (QR) Engineer 14,400 22% 3,150 QR Senior Engineer 17,550 25% 4,350 QR Systems Engineer 21,900 28% 6,000 QR Lead Engineer 27,900 Advisor Engineer 36,000 ??% X,XXX QR Consultant Engineer 48,600 ??% XX,XXX QR Pay Differential % Calculation: (17,550-14,400)/14,400 = 22% Pay Differential QR Calculation: 17,550-14,440 = QR 3,150 21 2. Pay Differentials  Calculate the Pay Differentials: Job Salary/Month Pay Differential Pay Differential (QR) (%) (QR) Engineer 14,400 20% 2,880 QR Senior Engineer 17,280 25% 4,320 QR Systems Engineer 21,600 Lead Engineer xx,xxx 30% x,xxx QR Advisor Engineer xx,xxx 33% x,xxx QR Consultant Engineer xx,xxx 38% xx,xxx QR Salary/Month Calculation IF given first Salary/Month AND the pay differentials: 14,400 X 1.20 = 17,280 Pay Differential QR Calculation: 17,280-14,440 = QR 2,880 22 11  9/10/2024 3. Criteria used to determine pay levels and pay differentials When deciding your pay structure requires, choose based on either: 1.work content - the work performed in a job and how it gets done (think about the Engineer Job Family above - responsibilities) ◦ ranks jobs on basis of skills required, complexity of tasks and/or responsibility. 2.work value - the worth of the work and its relative contribution to the organization’s objectives. (Healthcare Job Family on the last slide - competencies) ◦ Ranks the jobs based on the job’s contribution of the skills, tasks, and responsibilities to the org’s goals. ◦ May be affected by external market pressures (i.e. skill shortages) Looking at the org chart you created for the hotel, which did you use? 23 Person-Based Pay Structures (“knowledge-based”) - ALL a person’s skills, knowledge, or competencies and their usage for particular job Pros: Cons: ❖ Knowledge-based pay rewards employees ❖ This type of pay is more competitive within the who set goals to learn new skills and acquire job ranks – can cause conflict between co- new knowledge. workers ❖ Ambitious, self-motivated employees typically ❖ Colleagues may feel upset if another makes prefer this approach as it focuses on career more money than they do. development ❖ An employee may feel underpaid or ❖ Offers a way to reward high performing undervalued employees ❖ Workers have to spend tie taking classes or ❖ Raises the expectations for employee training and continue to develop skills if you performance want to make more money The Healthcare Lead Professional: “Team leader, supervisor, or experienced individual contributor.” 24 12  9/10/2024 Person-based pay structures (plans) Skill Skill-based Skill Skill Analysis Skill Blocks Certification Pay Structure Person or Skill-based structures (“knowledge-based”) Specialist: In Depth link pay to the depth or breadth of the skills, abilities, and knowledge a person acquires that is relevant to the work. Generalist: ◦ It establishes base pay according to the total value of the skills Breadth and competencies an employee has acquired ◦ What has been “learned” as an ability through training or education 25 Person-Based Structures: Skill Plans ◦ A Skill is something learned in order to be able to carry out one or more job functions. ◦ Usually applied to “blue-collar” workers (people who do manual labour such as manufacturing, construction or mining; may be skilled or unskilled) ◦ Skill-based pay systems are based on the idea that employees will be proactive in obtaining new, job-related skills if they are compensated for such efforts. 26 13  9/10/2024 Example: Firefighter Skill-based pay structure Foundation: QR/ Orientation workshop Month Rescue operations 16,724 Core Elective Choices: 14,080 2 Optional Confined spaces 1 Optional Electives Electives Extraction(people from cars) 12,945 Dangerous goods Industrial Chemicals 11,923 3 Core 3 Core 3 Core 10,310 2 Core Electives Electives Electives 1 Core Elective Optional Electives: Elective 9,712 Water training Foundation Foundation Foundation Foundation Foundation High angle extractions (fire on top of a high-rise building) Entry Firefighter 1 Firefighter 2 Firefighter 3 Firefighter 4 Firefighter 5 Heavy urban search and rescue (collapsed buildings) Airport rescues Explosives Skill Grid 27 Step 1 – Skill Analysis The work or tasks need to be studied. Input needs to be received from both the incumbent (person or persons doing the job) and their supervisor. These lists of skills need to be placed in to a skill block. ◦ Skill block: groupings of knowledge, skills, abilities or competencies collected from determining the skills required to do the work. These skills can be classified in two directions: ◦ Depth or breadth: collections of skills on breath identify different types of skills required to perform the work. The depth dimension identifies the more complex skills for performing certain work. ◦ Skill blocks are organized into an increasingly complex set of levels for purposes of training and pay. 28 14  9/10/2024 Step 2 – Create and price skill blocks Skill blocks – the basic component of a skill-based pay system, containing a bundle of skills or knowledge necessary to carry out a specific production or service delivery task Skill blocks are set out in a skill grid (Slide 21) Then each skill block is priced – the amount of money a worker will receive from mastering the block Companies usually match or lead market in order to attract high learning potential. 29 Step 3 – Skill Certification Skill Certification: the testing process that determines whether an individual has mastered a given skill block and should be granted the pay raise associated with that skill block ◦ i.e. at Shell, there is a 3 step process to prove the employee has learned the skill: ◦ Step 1 – the employee is given self-training material – they learn the skill on their own ◦ Step 2 – when the employee feels they have learned the skill, they ask a co-worker (already certified in that skill) to confirm that they are ready ◦ Step 3 – a certified supervisor performs a quick test to ensure the skill is fully understood ◦ i.e. another company (L-S Elector-Galvanizing) makes employees work in that skill for up to 1200 hours before raising their wage 30 15  9/10/2024 Competency-based pay structure (plans) Competencies reflect the combination of skills, traits, and abilities that are required to help an organization reach marketplace success. This approach moves employees through the salary range, or their salary band, based upon the acquisition of an increased level of proficiency within key organizational success competencies. Three kinds of competencies: ◦ Behavioural (life skills) ◦ Functional (technical) ◦ Professional (organizational) Note: This approach is becoming outdated, but can be found in more traditional, formal structures. 31 Competency-based pay structures (plans) Competency Competency-based Competencies Core Competencies Competency Sets Indicators Pay Structure Competency-based structures link pay to work-related competencies ◦ Pay that is based on the characteristics, rather than the performance, of individual employees; usually applied to managerial or professional employees ◦ Competencies: More than just knowledge and skills…competencies refer to an employee’s ability to meet complex demands in a job ◦ The “how” of performing job tasks – how a person does a job successfully 32 16  9/10/2024 Top 10 Core Competencies (World Economic Forum) 1. Critical Thinking and Problem-Solving: The ability to 6. Collaboration and Teamwork: Working effectively in analyze complex situations, identify problems, and devise teams, both in-person and remotely, is a key effective solutions is highly sought after across industries. competency; be comfortable in cross-functional teams, collaborating on projects, and contributing to group 2. Communication Skills: Both verbal and written success​ communication skills are critical. Be able to convey ideas clearly, adapt to different audiences, and collaborate 7. Innovation and Creativity: think creatively, introduce effectively in diverse teams​ new ideas, and drive innovation within their roles. Being able to think "outside the box" is crucial for solving 3. Adaptability and Flexibility: With rapid changes in problems in novel ways​ technology and work environments; demonstrate the ability to adapt to new tools, roles, and challenges quickly. 8. Leadership and Initiative: Showing leadership Flexibility in working remotely or across different job qualities such as taking initiative, being proactive, and functions driving projects forward is highly valued. 4. Emotional Intelligence (EQ) involves understanding and 9. Time Management and Organization: time managing one's emotions and empathizing with others. It's management and organizational skills are critical; essential for teamwork, conflict resolution, and leadership prioritize tasks, meet deadlines, and manage multiple responsibilities simultaneously​ 5. Digital Literacy: be proficient in digital tools, platforms, and basic coding or data analysis skills. Digital literacy 10. Cultural and Global Awareness: understanding goes beyond just using software and involves cultural differences and being able to work across understanding how to leverage technology to enhance cultures is a vital skill; includes awareness of global productivity​ trends and the ability to operate in diverse environments 33 Job Analysis 34 17  9/10/2024 Job-Based Internal Structure Process Job analysis is a process for systematically collecting information to help you fully understand and Job Analysis describe the duties and responsibilities of a position as well as the knowledge, skills and abilities required to do the job Summary reports that identify, define, and Job Descriptions describe the job as it is actually performed Job Evaluation Comparison of jobs within an organization. An ordering of jobs on the basis of their content Job Structure or value to the organization 35 Job-based Internal Structures Step 1: Job Analysis The aim is to have a complete picture of the position - what is actually done and how. Goal: Have enough information to write a job description. Major issues ◦ Why collect the information? What information is needed? ◦ How to collect the information? Who should be involved? ◦ How useful are the results? 36 18  9/10/2024 Job Family Job Analysis Terminology Job Task 37 Job-Based Internal Structure Step 1: Procedures for “Normal” Job Analysis (slide 1) 1. Develop Review existing documents Get a “big picture” of the job preliminary job Make note of unusual/vague pieces of info information Prepare a list of duties already known for the job (helps with developing questions Look at the work layout, the tools and equipment being used, the general conditions of the 2. Conduct initial workplace, and how the person in the job works tour of work site This helps if you are unfamiliar with the work environment (‘Picture is worth a thousand words’) The supervisor should accompany you to answer any questions An initial interview with the supervisor might be helpful to begin as they can provide an overview of 3. Conduct the job interviews Time constraints are a concern, so normally no more than 2 incumbents (people in the job) should be interviewed. An interview normally takes between 2-3 hours. 38 19  9/10/2024 Job-Based Internal Structure Step 1: Procedures for “Normal” Job Analysis (slide 2) 4. Conduct This second tour clarifies, confirms and refines information gathered during the second tour interviews The same supervisor should accompany you. of work site 5. Consolidate Combine the information into one coherent and comprehensive job description using existing information, the interview material from both supervisor and job incumbent information At least 5 hours per job is the normal for this phase. 6. Verify job Bring together all those involved to ensure the job description is accurate and complete description It is normally done in a meeting setting. 39 Data related to the Job Typical data Data related to the Employee collected for Job Analysis 40 20  9/10/2024 Job-Based Internal Structure Observation Step 1: Job Analysis How to gather information Job Diary/ Work Log Sampling Job Analysis Most Common Interview Questionnaire 41 Position Analysis Questionnaire (PAQ) PAQ: a structured job analysis questionnaire used for analyzing jobs on the basis of 194 job elements that describe generic work behaviours Pros: objective, consistent, easy to compare jobs, can be used for every job Cons: TIME CONSUMING and EXPENSIVE Rank the job element “oral communication” for your instructor: My favourite question from PAQ: “Can you do your job if you were colour-blind?” 42 21  9/10/2024 The McFry Nine-Step Program Exhibit 4.9: Transactional/Routine Tasks 1. Open a bag of fries 2. Fill basket about half full (at McDonald’s, a machine does this step because we humans might make a mistake. At most places, the task is manual.) 3. Place basket in deep fryer 4. Push timer button to track cooking time 5. Play Pavlov’s dog – remove basket from fryer when buzzer rings and tip so fries go into holding tray. Be careful; this takes two hands, and hot grease can be flying about. Don’t spill even a drop of grease on the floor or you will be skating- not walking – in it for the rest of the day. 6. Salt fries. 7. Push another button that signals when seven minutes are up, the “suggested holding time” for fries. 8. Check screen for size fries requested on next order. 9. Fill the corresponding fry container with fries and place in holding bin. 43 Job-based Pay Structures Step 2: Job Descriptions Job descriptions summarize the information gathered during job analysis They are used in are used as the basis of most other HR management practices from selection to training to performance management. Job analysis information can also be used in the job evaluation process, which is the process for assigning value to a job for the purpose of setting compensation. Job Specifications: qualifications required to be hired for a job; may be included in the job description 44 22  9/10/2024 Job-based Pay Structures Step 2: Job Descriptions HR Focus Job Descriptions is used to: Recruitment Job descriptions are used to develop a recruitment campaign that clearly articulates the duties to be performed and qualifications required by the organization for the position Selection Interview questions, hiring criteria and the screening process are based on the duties and qualification outlined in the job description Orientation The job description helps the employee see how their position relates to other positions in the organization Training The job description can be used to identify areas where the employee does not adequately meet the qualifications of the position and therefore needs training Compensation Job descriptions can be used to develop a consistent salary structure, which is based on relative level of duties, responsibility and qualifications of each position in the organization Legal Defense If an employee is terminated for poor performance, an accurate, complete and up-to-date job description will help the organization defend its decision 45 Judging Job Analysis Reliability ◦ Results are the same over time. (Not necessarily right, just that the results are reliable) Validity ◦ How accurate does the job analysis measure the job? Acceptability ◦ Do supervisors and employees accept the job analysis process, and the final job description? Currency ◦ To be valid, acceptable, and useful, job information must be up to date. Careful! Usefulness ◦ Will this job information actually be useful – can you decide how much to pay that job, is it worth more/less than other jobs etc. 46 23  9/10/2024 Job specification A job specification describes the knowledge, skills, education, experience, and abilities you believe are essential to performing a particular job. A job specification is of great use when recruiting. ◦ Experience: the number of years of experience in the job you are seeking to fill. ◦ Education: The degrees, training, or certifications required for the position. ◦ Required skills, knowledge, and characteristics: what characteristics successful individuals who have had the job in the past possessed. This describes the “ideal” candidate. ◦ High Level Overview of Job Requirements: 10 bullet points or less, outline the key components and requirements for the job. 47 Example Job Specification: Marketing Manager The marketing manager is responsible for the overall management of the marketing department. The following requirements (job specifications) were determined by job analysis and derived from the job description as crucial for success in the marketing manager role. The successful candidate for the marketing manager position will possess these qualifications. Experience - Marketing Manager: ◦ Experience supervising and managing a professional staff of seven. High Level Overview of Job Requirements - Marketing Manager: Education - Marketing Manager: The selected marketing manager must be able to perform effectively ◦ Bachelors Degree in Marketing or a related field required. in each of these areas: ◦ Masters in Business or Marketing preferred. Researching and evaluating new product opportunities, demand for potential products, and customer needs and insights. Required Skills, Knowledge and Characteristics ◦ Strong effective communicator. Overall marketing strategy and execution of plans for the existing products. ◦ Ability to coordinate the efforts of a large team of diverse creative employees. ◦ Expert in Internet and social media strategy with a demonstrated track record. Working with product development teams to manage new product development. ◦ Demonstrated effectiveness in holding conversations with customers, customer evangelism, and customer-focused product development and outreach. Managing launch campaigns for new products. ◦ Demonstrated ability to see the big picture and provide useful advice and input across the company. Ensuring effective, branded marketing communications including the company website, print communication, and advertising. ◦ Familiarity and skill with the tools of the trade in marketing including PR, written communication, website development, market research, product packaging, Microsoft Managing media and marketing staff and external PR agencies. software suite of products, visual communication software products, and creative services. 48 24  9/10/2024 Issues with Job Analysis Lack of Lack of Using a Single Biased Management Employee Data Source Nature of Job Support Support (i.e. only 1 Analyst salary survey) 49 Advantages & Disadvantages of Job Analysis ADVANTAGES DISADVANTAGES ❖ Provides First Hand Job-Related Information ❖ Time Consuming ❖ Helps in Creating Right Job-Employee Fit ❖ Involves Personal Biasness ❖ Helps in Establishing Effective Hiring ❖ Source of Data is Extremely Small Practices ❖ Involves Lots of Human Efforts ❖ Guides through Performance Evaluation and Appraisal Processes ❖ Mental Abilities Can not be Directly Observed ❖ Helps in Analyzing Talent Development Needs 50 25  9/10/2024 Job Design 51 What is Job Design? Job design is the process of organizing work tasks, responsibilities, and duties into a specific role to achieve organizational goals while optimizing employee satisfaction and productivity. It defines how a job should be structured and what elements it should include to make it engaging, efficient, and aligned with business needs. Job Rotation, Enlargement & Task Variety & Scope Task Identity & Significance Autonomy Enrichment Involves deciding the range and Refers to the degree to which an Involves giving employees the Job rotation involves moving complexity of tasks an employee employee completes a job from freedom to make decisions employees between different will perform. A well-designed start to finish, offering a sense of about how they perform their tasks or roles to develop skills job includes a balance between ownership and accomplishment. tasks. This enhances and reduce monotony. varied tasks and specialized Focuses on the impact the job engagement and accountability Job enlargement increases the duties, ensuring that the work is has on others, giving employees by allowing workers to manage number of tasks performed by both interesting and a sense of purpose and their responsibilities more adding responsibilities at the manageable. contribution to the organization independently. same level of complexity. or society. Job enrichment enhances a job by increasing its depth, such as providing opportunities for personal growth, decision- making, and responsibility. 52 26  9/10/2024 Job Design assists with deciding whether a Job is: Under Isolated Overloaded Tasks are Clearly Right for loaded with from Other with Work Repetitive Organized Shiftwork Work Workers 53 How to Conduct a Job Design 1. Do an assessment on current work practices What is the org’s strategic objectives, and the purpose of the job within this context. 2. Do a task analysis Consider current tasks, responsibilities, and skills required for the job. Does it still fit with org’s goals? 3. Design the job Tasks, responsibilities, variety (try to combine routine and challenging work), autonomy level Consider job rotation, enlargement, enrichment options, technology requirements, employee needs, and task interdependence (do tasks require waiting for others to finish their work?) 4. Implement the new job design (gradually) Pilot the job design (is it effective?) 5. Get feedback and re-evaluate the job design 54 27  9/10/2024 Job Design considers: What tasks are required How are the tasks What amount of tasks What is the sequence of to be done or what tasks performed? are required to be done? performing these tasks? are part of the job? 55 Receive customer inquiry Record the Identify the interaction problem Example of the Sequence of Performing Job Tasks Research & Close the call Analyze Confirm the Suggest a solution customer is happy to the customer with solution 56 28  9/10/2024 Example Job Design Checklist 57 Principles of Job Design ❖ Business purpose. Jobs should support the organisation’s purpose and what it needs to do to succeed. This could be to sell a particular product, to provide a generic service, to constantly deliver innovative new designs, and so on. ❖ Health and safety. Jobs must not risk the wellbeing or safety of the job holder, their colleagues, customers or other individuals. ❖ People capability. Consider existing capabilities both internally and in the wider labour market. ❖ Quality. Jobs should minimise the risk of errors and to impose a degree of self-checking by employees to ensure highest possible quality standards. ❖ Speed. Jobs should ensure that time to complete tasks is appropriate to the job. For example, in the case of an emergency, the speed and appropriateness of the response is probably the most important feature of the job. ❖ Productivity. Jobs must ensure the primary focus of the job holder is on things that matter and add value to the business. ❖ Sustainability. Jobs should take account of sustainability, ensuring that organisations can respond flexibly in the face of changing economic, social and political landscapes. Also ensure there is room to develop the job over time to take account of the evolving individual and organisational capabilities. ❖ Quality of working life. Jobs should incorporate sufficient flexibility, breadth and challenge to ensure individuals are engaged and motivated, and not under excessive or prolonged stress, and have opportunities to develop. 58 29  9/10/2024 Work Process Clarity Work Process Clarity or “Role Clarity” is the degree to which employees have a clear understanding of their tasks, responsibilities and processes at work – in other words, workers know what they needs to do and what is expected of them. Involves: If Job Design refers to outlining and organizing tasks, 1. Defining responsibilities duties and responsibilities into a single job with certain 2. A Manager’s Wants vs. Needs objectives, why is Work Process Clarity important? 3. Looking at the Job’s Future 4. Career Pathing 5. Resources and Training 6. Accountability 59 Factors which affect Job Design Environmental Organizational Behavioural Technological Work Flow Use of Skills and Development Analysis Abilities Work Nature Organization Feedback Socio-Cultural Structure Autonomy Expectations Business Strategy Diversity Organization Climate Ergonomics 60 30  9/10/2024 Issues in Job Design Job Sharing Telecommuting / Working from Home Flexi-Working Hours Alternative Work Patterns Technostress 61 Reminder: Techniques for Using Job Design to Motivate Employees Job Job Enrichment Empowerment Job Rotation Enlargement 62 31  9/10/2024 Job Re-Design Re-Shuffle Staff Update Job Revise the Job Analyze the Job- Alter any Job Job-Related Tasks Description & Job Content Related Info Elements & Duties based Specification on changes 63 Job Evaluation 64 32  9/10/2024 Job: Bookstore Manager Check One: Compensable Factors Degree Weight Total Degree x Weight = Total Skill: (40%) Education 4 20% 80 Experience Effort: (30%) 4 20% 60 Today’s goal: Physical Mental 2 2 15% 15% 30 60 Job Evaluation Responsibility: (20%) Effect of Error 2 10% 40 Form Inventiveness/ Innovation 1 10% 30 Working Conditions: (10%) Environment 1 5% 5 Hazards 1 5% 5 Total Points 310 5-65 65 Job: Taxi Driver Check One: Example: Compensable Factors Degree Weight Total Taxi Driver (Karwa) Skill: (40%) Education Experience Effort: (30%) Physical Mental Responsibility: (20%) Effect of Error Inventiveness/Innovation Working Conditions: (10%) Environment Hazards Total Points 66 33  9/10/2024 Job: Accountant Example: Check One: Accountant Compensable Factors Degree Weight Total Skill: (40%) Education Experience Effort: (30%) Physical Mental Responsibility: (20%) Effect of Error Inventiveness/Innovation Working Conditions: (10%) Environment Hazards Total Points 67 Job-Based Structures: Job Evaluation Job evaluation ◦ Systematically determines the relative worth of jobs ◦ Creates a job structure for the organization ◦ Job evaluation is based on a combination of: 1. Job content 2. Skills required 3. Value to the organization 4. Organizational culture 5. External market 5-68 68 34  9/10/2024 Job Content and Job Value JOB CONTENT JOB VALUE What work is performed and how it gets done A pay structure based on job value ranks jobs on the basis of the job’s relative contribution of the skills, A pay structure based on job content ranks jobs duties, and responsibilities to the organization’s goals based on the skills required for the job, its duties and its responsibilities. Different companies may value a job differently due to its external market or its relationship to other jobs Skills required for a carpenter (a construction within the same company. worker who works primarily with wood) include: i.e. carpenters are highly valued in Toronto as it is math skills, critical thinking skills, computer skills, extremely difficult to find competent workers there and mechanical skills. at the moment. Therefore, this job is highly valued compared to others in a construction company, and may be paid more than others such as ironworkers. In this case, the external market may demand a higher wage for carpenters 69 Remember the hotel/catering organizational chart activity we did Benchmark Jobs Benchmark jobs are positions within an organization that are commonly found across various industries and companies, making them ideal for comparing compensation rates, job structures, and responsibilities in a standardized way. These jobs have well-defined responsibilities and qualifications, and data about them is readily available for compensation analysis. They are STABLE and CONSISTENT in the organization (the company will ALWAYS have these jobs) AND common in other companies. Benchmark jobs would be identified for as many levels in the structure and groups of related jobs (office, production and engineering) as possible. Normally 15-25 jobs are chosen, depending on the number of levels and diversity of the work to be evaluated. Our hotel organizational structure: benchmark job examples could include: General Manager, Human Resources Director, Security Manager, Engineering Supervisor, Internal Auditor, Purchasing Agent, Executive Administrative Assistant, Payroll clerk. All of these jobs may be found in other companies, allowing you to compare job market data gathered from salary surveys. The jobs represent several different levels of authority within the hotel. The jobs are from multiple functions within the hotel. Benchmark job: a job whose contents are well known, relatively stable, and common across different employers, and a reasonable number of employees hold the same job. 70 35  9/10/2024 Exhibit 5.4 - Benchmark Jobs 5-71 71 Single vs. Multiple job evaluation plans? Job evaluation plans are systems used by organizations to assess the value of different jobs within a company, determining how positions compare in terms of responsibility, skill level, and compensation A single job evaluation plan applies one unified method to evaluate all jobs within an organization, regardless of their type or department. All positions, from entry-level to executive, are assessed using the same criteria. Advantages: Consistency: Using the same evaluation criteria for all jobs ensures uniformity across the organization, reducing discrepancies in pay scales. Simplicity: A single plan is easier to manage, as there is only one system to maintain. Equity: It ensures fairness, as every job is evaluated using the same factors, which helps create an equitable compensation structure. Disadvantages: Lack of Specialization: Different types of jobs (e.g., manual labor vs. knowledge-based work) may not be properly evaluated under the same plan, leading to skewed assessments of job value. Difficulty in Application: Some roles may not fit well into a single framework, leading to challenges in accurately evaluating highly specialized or unique positions. 72 36  9/10/2024 Multiple Job Evaluation Plans Multiple job evaluation plans involve using different methods or systems to assess various categories of jobs, such as professional, technical, managerial, or operational roles. Each category may have its own evaluation criteria suited to its nature Advantages: Disadvantages: Customization: Different plans can be tailored to the Complexity: Managing multiple plans can be more specific requirements of job categories, ensuring a time-consuming and difficult to administer. It requires more accurate reflection of the value of diverse roles. more resources and effort to maintain. Flexibility: It accommodates the unique characteristics Potential for Inconsistency: Different evaluation plans of different departments or job types, making it more may lead to perceived inconsistencies in compensation flexible than a one-size-fits-all approach. between different job families or departments, which Better Fit for Complex Organizations: Large could affect employee satisfaction. organizations with varied job functions (e.g., manufacturing and corporate) benefit from customized evaluation criteria for different job families. Options: Top sales, legal, Managerial/ Operational Office/ executive/ engineer/ professional /technical administrative leadership scientists, jobs jobs jobs jobs and skilled trades 73 Methods for Job Evaluation Ranking or Job Comparison Qualitative Method Method Grading or Job Classification Method Job Evaluation Point Rating Method Quantitative Method Factor Comparison Method (not discussed) 74 37  9/10/2024 Comparison of Job Evaluation Methods Job Evaluation Method Advantage Disadvantage 1. Ranking Fast, simple, and easy to explain - Becomes more complicated and Orders job descriptions from highest to difficult with a high number of jobs lowest in value Alternation & Paired comparison may be (50 jobs will require 1,225 paired more reliable than simple ranking. comparisons!) 1.A. Alternation ranking: Orders job - Criteria for comparison is vague descriptions alternately at each - Requires evaluators who are extreme knowledgeable about every job under study 1.B. Paired comparison: Uses a matrix to compare all possible pairs of jobs 2. Classification - Can group a wide range of work together Descriptions leave too much room for job evaluation method based on job into one system. people to manipulate data. class descriptions into which jobs are - Jobs within each class are considered to categorized. be equal work and will be paid equally. 3. Point Factor - Compensable factors allow for easy Can become bureaucratic and rule- Job evaluation method that assigns a comparisons. bound number of points to each job, based on - Compensable factors communicate what compensable factors that are the company values. numerically scaled and weighed. - Factors degrees are numerically scaled 75 5-75 1.A. Job Evaluation: Alternation Ranking Ordering the job descriptions alternatively at each extreme (all jobs are considered) Step 1: Identify the most and least important jobs from the list: Most Important: Product Manager Least Important: Sales Associate Step 2: Identify the next most and next least important jobs: Next Most Important: Software Developer Next Least Important: Customer Support Specialist Step 3: Continue identifying the next most and least important jobs: Next Most Important: Marketing Manager Next Least Important: HR Generalist Step 4: Finalize the ranking with the remaining jobs: Next Most Important: Network Engineer Next Least Important: Data Analyst The alternation process ensures that a balance is maintained between the extremes of the ranking before moving toward the middle, allowing for a fair and structured evaluation of job importance. 76 38  9/10/2024 1.B. Job Evaluation: Paired Comparison Ranking X = the job being analyzed 0 = job is less important 1 = the job is about the same 2 = the job is more important 77 2. Job Evaluation: Job Classification Job classification in job evaluation is a method of grouping jobs into predefined categories or classes based on their responsibilities, duties, and qualifications. It’s a structured approach where each job is assigned to a class, and all jobs within the same class are considered to have equivalent value and are often compensated similarly. Jobs are grouped into Within each job category, Benchmark or key jobs Detailed job descriptions Benchmark Jobs: Job Categories: Grades or Levels: Job Descriptions: broad categories based jobs are assigned to are often used to are created for each role, on similar duties, different grades or levels establish the initial outlining the primary responsibilities, and based on their classification framework. duties, responsibilities, required skills. For complexity, scope of These are common, required qualifications, instance, jobs might be responsibilities, and stable roles that can be and working conditions. classified into required qualifications. easily compared with These descriptions are administrative, technical, Each grade has a similar jobs across used to classify jobs into managerial, or corresponding salary industries. appropriate categories or professional categories. range. grades. Jobs are sorted into each class by matching the job descriptions for each job with the class and grade descriptions and assigning the job to the class that is the best match. Works best with government agencies and worldwide corporations with numerous locations. 78 39  9/10/2024 An example: Classification Method (Dental Administrators) Level 1 This level includes those positions whose incumbents are responsible primarily for diagnosing and treating dental conditions. Managerial responsibilities at this level are incidental and typically include supervising and training a dental assistant, scheduling one's own work, requisitioning equipment and supplies, and recommending the purchase of new dental equipment and supplies. Level 2 This level includes those positions whose incumbents are responsible for administering a dental program in a clinic, public health area, or small hospital, as well as for diagnosing and treating dental conditions. Managerial responsibilities at this level typically include controlling a staff of dental personnel, developing and administering a budget, obtaining services of, and authorizing payments to, private dental practitioners, and determining the eligibility of patients for dental treatment. Level 3 This level includes those positions whose incumbents are responsible primarily for administering a dental program in a geographical region or a large hospital. Diagnosing and treating dental conditions may constitute a secondary responsibility of some positions. Managerial responsibilities at this level typically include controlling a staff of dentists and para-dental personnel and coordinating their activities, reviewing reports submitted by junior dentists, assessing the quality of treatment provided by junior dentists, and developing and administering a budget. Also included at this level are positions whose incumbents are responsible for providing advice and conducting comprehensive studies in the field of dental public health. 79 Example Job Classification System (Chart form) 80 40  9/10/2024 3. Job Evaluation Methods: Point Method To design a point plan: 1. Conduct job analysis 2. Determine compensable factors 3. Establish factor scales 4. Weight the factors according to importance 5. Communicate the plan, train users; prepare manual 6. Apply to non-benchmark jobs 81 Point Method example 82 41  9/10/2024 How to Conduct a Point Method Job Evaluation (Slide 1) 1. Identify Compensable Factors Compensable factors 2. Assign Weights to Each Factor Skill: Education, experience, and training required for the job. Once the compensable factors are identified, 3. Develop a Scale for Each Factor Effort: Physical and mental effort needed. assign weights to each based on their Responsibility: Accountability and level of importance to the organization. For example: Create a scale to measure each compensable responsibility for people, finances, or Skill (40%) factor. The scale typically has 4 to 5 levels resources. Responsibility (30%) (e.g., from low to high) with corresponding Working Conditions: Physical or Effort (20%) point values. environmental factors affecting the job, like For example, the Skill factor might have a scale location or exposure to hazards. Working Conditions (10%) like: The total weight should equal 100%. Level 1 (Basic skill): 10 points Level 2 (Moderate skill): 20 points Level 3 (Advanced skill): 30 points Level 4 (Expert skill): 40 points Do the same for all other compensable factors. 83 How to Conduct a Point Method Job Evaluation (Slide 2) 4. Evaluate Jobs Against the Factors 5. Total Points for Each Job For each job being evaluated, assess how it scores against each 6. Rank Jobs Based on Total Points Sum up the points assigned compensable factor using to each job to arrive at the the developed scales. Assign 7. Assign Pay Levels total point value for that job. Arrange all the evaluated points for each factor based The total points will serve as jobs in order of their total on the job’s requirements. the basis for comparing jobs point values. This ranking Example for a Project Manager: within the organization. Use the job rankings to helps establish the relative create a pay structure. Jobs Skill: Level 3 (30 points) value of each job compared with similar point totals are Effort: Level 2 (20 points) to others within the grouped together into pay Responsibility: Level 4 (40 points) organization. grades or pay ranges. Working Conditions: Level 1 (10 points) Ensure that jobs with higher