Human Resources Chapter 5 Vii Balancing Chaos And Control Job Evaluation With Its Specified Procedures And

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5 – 13 Compensation – Thirteenth Edition Gerhart │Newman │Milkovich

the organization tends to use that factor for the entire work domain.

• Once a factor is part of the system, other workers are likely to say

their jobs have it, too.

▪ In one study, a 21-factor plan produced the same rank order of jobs that

could be generated using only seven of the factors.

Third – Scale the Factors

o Once the factors are determined, scales reflecting the different degrees

within each factor are developed.

o Most factor scales consist of four to eight degrees.

▪ For example, the difference between the first and second degrees in

Exhibit 5.13 should approximate the difference between the fourth and

fifth degrees, since the differences in points will be the same.

o The following criteria for scaling factors have been suggested:

1. Ensure that the number of degrees is necessary to distinguish among

jobs

Fourth – Weight the Factors According to Importance

o Factor weights reflect the relative importance of each factor to the overall

value of the job and to the organization.

Fifth – Select Criterion Pay Structure

o Contemporary job evaluation often supplements committee judgment for

determining weights with statistical analysis.

o The committee members recommend the criterion pay structure, that is, a

Chapter Five: Job-Based Structures and Job Evaluation 5 – 14

pay structure they wish to duplicate with the point plan.

o The criterion structure may be the current rates paid for benchmark jobs,

market rates for benchmark jobs, rates for jobs held predominantly by males

o Not only do the weights reflect the relative importance of each factor, but

research demonstrates that the weights influence the resulting pay structure.

▪ Selecting the appropriate pay rates to use as the criteria is critical.

▪ The job evaluation and its results are based on it.

Sixth – Communicate the Plan and Train Users

o A manual is prepared so others can apply the plan.

o The manual describes the method, defines the compensable factors, and

provides enough information to permit users to distinguish varying degrees

of each factor.

Seventh – Apply to Nonbenchmark Jobs

o The compensable factors and weights were derived using a sample of

benchmark jobs.

o The final step is to apply the plan to the remaining jobs.

o If the policy-capturing approach is used, then an equation can be used to

5 – 15 Compensation – Thirteenth Edition Gerhart │Newman │Milkovich

▪ They may also be part of panels that hear appeals from employees.

Eighth – Develop Online Software Support

o Online job evaluation is widely used in larger organizations.

V. Who Should Be Involved?

• If the internal structure’s purpose is to aid managers—and if ensuring high involvement

and commitment from employees is important—those managers and employees with a

stake in the results should be involved in the process of designing it.

A. The Design Process Matters

• Research suggests that attending to the fairness of the design process and the

approach chosen (job evaluation, skill/competency-based plan, and market

• Additional research is needed to ascertain whether the payoffs from increased

participation offset potential costs (time involved to reach consensus, potential

problems caused by disrupting current perceptions, etc.).

o Remember, no amount of participation overcomes low wages.

Appeals/Review Procedures

o No matter what the technique, no job evaluation plan anticipates all

situations.

o It is inevitable that some jobs will be incorrectly evaluated—or at least

Chapter Five: Job-Based Structures and Job Evaluation 5 – 16

o When the evaluations are completed, approval by higher levels of

management is usually required.

“I Know I Speak for All of Us When I Say I Speak for All of Us.”

o One study found that more powerful departments in a university were more

successful in using the appeals process to change the pay or the

classification of a job than were weaker departments.

VI. The Final Result: Structure

• The final result of the job analysis–job description–job evaluation process is a

structure, a hierarchy of work that translates the employer’s internal alignment policy

into practice – as shown in Exhibit 5.3 at the beginning of the chapter.

• Exhibit 5.15 shows four hypothetical job structures within a single organization. These

VII. Balancing Chaos and Control

• Job evaluation, with its specified procedures and documented results provided work-

related and business-related order and logic.

o However, over time, complex procedures and creeping bureaucracy can cause users

• At the same time, the world of work is changing.

o The work of many people now requires that they figure out what to do in a given

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changing conditions.

• Some balance between chaos and control is required.

o History suggests that when flexibility without guidelines exists, chaotic and

VIII. Your Turn: Job Evaluation at Whole Foods

Summary of Case

Students are expected to design a job structure using information available through job analysis

and 10 job descriptions that have been completed already.

Learning Objective

Teaching Guideline

Use this case to help students understand the complexities in designing a job structure.

Discussion of Case Questions

1. Divide into teams of four to six each. Each team should evaluate the jobs and prepare a

job structure based on its evaluation. Assign titles to each job, and show your structure

by title and job letter. A broad hint: Recall from our discussion of Whole Foods’

business and pay strategy that teams play an important role.

This exercise is mainly directed at encouraging class participation. The instructor can divide

2. Your team should describe the process it went through to arrive at that job structure.

The job evaluation techniques and compensable factors used should be described, and

the reasons for selecting them should be stated.

This exercise is directed to improve any ambiguity in understanding the concept of job

structures and to encourage class discussions. Each team may put forth their analysis of the

Chapter Five: Job-Based Structures and Job Evaluation 5 – 18

process of having arrived at the particular job structure and explain the job evaluation

techniques and compensable factors used, and the reasons behind doing so. The

compensable factors that students choose should be based on the strategy and values of the

organization, and on the work performed. It should be acceptable to the stakeholders

affected by the resulting pay structure.

Students might choose some of the following compensation factors:

• Skills (analytical, communication, interpersonal)

• Responsibilities of the work

3. Each team should give each job a title and put its job structure on the board.

Comparisons can then be made among job structures of the various teams. Does the

job evaluation method used appear to affect the results? Do the compensable factors

chosen affect the results? Does the process affect the results?

This exercise will encourage class discussions and student answers will vary. Students

should be able to analyze the descriptions and provide a suitable job title (similar titles to

what is provided in companies).

Job Number

Job Title

Keywords to identify the job title

JOB A

Team Member,

Deli

Prepares food items

Follow through on supervisor requests

Enjoys mentoring people

Comply with safety procedures

JOB B

Cashier

Assist and focus on customers

Perform cash register operations

Pass entry-level PLU code test

JOB C

Team Leader,

Prepared Foods

Two years relevant experience as a team leader

Responsible for team member hiring, development,

and terminations.

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Involved in financial management, team member

development, regulatory compliance, merchandising /

marketing management

JOB D

Team Member,

Prepared Foods

Assist team leader or associate team leader

Mentor team members

Knowledge on operations of the store

Demonstrated decision-making ability, and leadership

skills

JOB E

Team Member,

Kitchen

Performs all duties related to dishwashing

Prep work and maintaining food quality and sanitation

in kitchen

Entry-Level Position

JOB F

Team Member II-

Stock and Display

Breaking down deliveries

Training entry-level grocery clerks

Performs all duties and responsibilities of grocery team

member.

Able to direct team members

One-year experience

JOB G

Associate Team

Leader, Prepared

Foods

Reports directly to Prepared Foods Team

Leader.

Can be responsible for team member hiring,

development, and terminations

One to two years of department experience

JOB H

Regional Team

Leader

Assist and support the store team leader

Operate the store

Understand store financials and labor budgets

Review department schedules and research

productivity improvements.

Communicate company goals and information

JOB I

Grocery Team

Member

Breaking down deliveries

Retail grocery or natural foods experience a plus

Encourage students to notice the similarity in description between JOB A and JOB G, JOB F

and JOB I. They should be able to analyze the differences and similarities between job

descriptions for jobs in the same department and similar classes.

Chapter Five: Job-Based Structures and Job Evaluation 5 – 20

Education.

Students’ version of a job structure would be based as follows: team members under

operational group, associate and department team leaders under professional or

administrative group; associate store team leaders and store team leaders under managerial

group.

4. Evaluate the job descriptions. What parts of them were most useful? How could they

be improved?

This exercise will encourage class discussions and student answers will vary. Student

answers on which part of the description was most useful would be ‘the kind of work’ since

Answers to Review Questions

1. How does job evaluation translate internal alignment policies (loosely coupled versus

tight fitting) into practice? What does (a) organization strategy and objectives, (b) flow

of work, (c) fairness, and (d) motivating people’s behaviors toward organization

objectives have to do with job evaluation?

• Organization strategy and objectives—Job evaluation aligns with the organization’s

strategy by including what it is about work that adds value and contributes to pursuing

the organization’s strategy and achieving its objectives.

5 – 21 Compensation – Thirteenth Edition Gerhart │Newman │Milkovich

Education.

chance, favoritism, and bias in setting pay.

• Motivate people’s behaviors toward organization objectives—Job evaluation calls out

to employees what it is about their work that the organization values, what supports the

organization’s strategy and its success. It can also help employees adapt to organization

changes by improving their understanding of what is valued and why that value may

have changed.

2. Why are there different approaches to job evaluation? Think of several employers in

your area (the college, hospital, retailer 7-Eleven, etc.). What approach would you

expect them to use? Why?

Different employers wish to emphasize different aspects of work; the different approaches

should support the organization’s strategy. Consequently, a wide variety of job evaluation

approaches exist. Some organizations desire to be more formalistic, legalistic, and thus use

3. What are the advantages and disadvantages of using more than one job evaluation

plan in any single organization?

The advantage of using multiple plans is it provides a higher likelihood of covering all

significant aspects of work content (due to the wide diversity of work among various job

families). For example, production jobs may vary in terms of manipulative skills, knowledge

of statistical quality control, and working conditions. But these tasks and skills may not be

4. Why bother with job evaluation? Why not simply market-price? How can job

Chapter Five: Job-Based Structures and Job Evaluation 5 – 22

evaluation link internal alignment and external market pressures?

With job evaluation, the systematic evaluation of jobs reflects the internal job structure

within a single organization. This structure and the underlying relationships among jobs are

the basis of internal alignment. As a process, job evaluation can help gain employee

acceptance of pay differences among jobs. The usefulness of job evaluation is that it

5. Consider your college or school. What are the compensable factors required for your

college to evaluate jobs? How would you go about identifying these factors? Should the

school’s educational mission be reflected in your factors? Or are the more generic

factors used in the Hay plan okay? Discuss.

Colleges need high-quality professors who can “package” the material based on the type of

students (admissions standards vary widely so the skill level of students will also differ).

Thus, faculty needs technical competence—knowledge/skills—in their chosen fields, plus

the ability to interact constructively with students. Since knowledge is so important, it will

5 – 23 Compensation – Thirteenth Edition Gerhart │Newman │Milkovich

Education.

accountability), would not be applicable as such when evaluating faculty jobs. Of these

generic factors, know-how is the only applicable factor. The other factors would have to be

modified to apply to faculty positions.

6. You are the manager of 10 people in a large organization. All of them become very

suspicious and upset when they receive a memo from the HR department saying their

jobs are going to be evaluated. How do you try to reassure them?

First, find out from the HR department what forums are available for employee participation

and the anticipated uses of the job evaluation information. Ideally, one or more employees

should be provided an opportunity to be involved in the job analysis phase of the process.