compensation and benefit systems questions 3

Chapter 6:

Building Internally Consistent Compensation Systems Copyright © 2017 Pearson Education, Inc.6-1 Internal Consistency  Compares the value of each job within the same company against the rest of the jobs found within that company  Represents job structure or hierarchy  Job descriptions are its cornerstone  Recognizes differences in job characteristics Copyright © 2017 Pearson Education, Inc. 6-2 Internally Consistent Compensation Structure Copyright © 2017 Pearson Education, Inc. 6-3 Internally Consistent Compensation Structure Copyright © 2017 Pearson Education, Inc. 6-4 Tools for Building Job Structures  Job analysis (LO 6-2)  A descriptive procedure  Identifies and defines job content  Job evaluation (LO 6-3)  Reflects value judgments  Compensation systems set pay levels Copyright © 2017 Pearson Education, Inc. 6-5 Job Analysis Job analyses describe:

 Job content: actual activities  Greeting clients • Saying “Hello” • Asking the client’s name • Offering beverages, etc.  Worker requirements: minimum qualifications and KSAs  Working Conditions: social context or physical environment Copyright © 2017 Pearson Education, Inc. 6-6 Worker Requirements  Knowledge, Skills, and Abilities (KSAs)  Education  Experience  Licenses  Permits  Special abilities  Ex: HR managers must have knowledge of recruitment, selection, training, compensation and benefits, labor relations and negotiations, human resource information systems, oral/written comprehension, active listening, critical thinking. Copyright © 2017 Pearson Education, Inc.6-7 Working Conditions  Social context  Physical environment  Vary along dimensions  Based on level of noise and possible exposure to hazardous factors Copyright © 2017 Pearson Education, Inc.6-8 Job Analysis Process  Determine job analysis program  Select and train analysts  Direct job analyst orientation  Conduct the study  Summarize results: write job descriptions Copyright © 2017 Pearson Education, Inc.6-9 Job Analysis Data Gathering Methods  Questionnaires  Interviews  Observation  Participation Copyright © 2017 Pearson Education, Inc.6-10 Job Analysis Units  Element: the smallest step  Ex: Connecting a flash drive into a USB port.  Task: one or more elements  Ex: Keyboarding text into memo format.  Position: acollection of tasks  Ex: Clerk typist. Copyright © 2017 Pearson Education, Inc. 6-11 Job Analysis Units (cont’d)  Job: a group of positions with similar tasks  Bob, John, and Jason are clerk typists  Job family: a group of two or more jobs with similar characteristics  Clerical job family: file clerk, clerk typist, administrative clerk  Occupation: a group of jobs  Office support occupation Copyright © 2017 Pearson Education, Inc. 6-12 Standard Occupational Classification System (SOC)  SOC  Published by the Office of Management and Budget  Lists 23 major occupational groups Copyright © 2017 Pearson Education, Inc. 6-13 Sources of Data  Job incumbents  Supervisors  Job analysts Note: A review of O*Net, which falls within the scope of job analysis, follows as an appendix. Copyright © 2017 Pearson Education, Inc. 6-14 Reliable and Valid Job Analysis Methods  Reliable Job Analysis Method: Yields consistent results under similar conditions.

 For example, two independent analysts reach similar conclusions about the duties that constitutes a job  Valid Job Analysis Method: Accurately assesses each job’s duties or content Copyright © 2017 Pearson Education, Inc. 6-16 Writing Job Descriptions Should include:

 Job title  Job summary  Job duties  Worker specifications Copyright © 2017 Pearson Education, Inc.6-16 Worker Specifications  Education  Skills  Abilities  Knowledge  Other qualifications to perform job Copyright © 2017 Pearson Education, Inc.6-17 Equal Employment Opportunity Commission (EEOC)  Distinguishes among the terms knowledge, skill, and ability  Skill refers to an observable competence to perform a learned psychomotor act  Ex: Typing 50 words per minute.  Knowledge refers to a body of information applied directly to the performance of a function – Ex: Compensation professionals should know FLSA’s overtime provisions. Copyright © 2017 Pearson Education, Inc. 6-18 Equal Employment Opportunity Commission (EEOC) (cont’d) • Ability refers to a present competence to perform an observable behavior or a behavior that results in an observable product –Ex: To mediate a dispute between labor and management successfully. Copyright © 2017 Pearson Education, Inc. 6-19 Legal Considerations  Equal Pay Act  Must justify pay differences  FLSA  Determine exemption status  ADA  Determine essential job functions Copyright © 2017 Pearson Education, Inc.6-20 ADA Guidelines Essential Job Functions  Position has an essential function  Requires high skills or expertise  Decided case by case  Nonessential jobs are marginal Copyright © 2017 Pearson Education, Inc. 6-21 Job Evaluation  Systematically recognizes differences in the relative worth among a set of jobs  Helps to establish pay differentials accordingly  Job evaluation partly reflects the values and priorities that management places on various positions  Job analysis, in contrast, is almost purely descriptive Copyright © 2017 Pearson Education, Inc. 6-22 Universal Compensable Factors  Skill  Effort  Responsibility  Working conditions Copyright © 2017 Pearson Education, Inc.6-23 Job Evaluation Process Steps  Select technique  Choose committee  Train members to evaluate  Document plan  Communicate with employees  Set up appeals process Copyright © 2017 Pearson Education, Inc.6-24 Two Examples of Job Evaluation Techniques  Market -based evaluation: uses market data to determine differences in job worth  Job -content evaluation: emphasizes company’s internal value system by establishing a hierarchy of internal job worth; the point method is a job-content evaluation system Copyright © 2017 Pearson Education, Inc. 6-25 The Point Method  Most popular job-content method  Uses quantitative methodology  Evaluates jobs by comparing compensable factors Copyright © 2017 Pearson Education, Inc. 6-26 Point Method Steps  Select benchmark jobs  Choose compensable factors  Define factor degrees  Determine weight of factors  Determine point value  Verify factor degrees and point values  Evaluate all jobs Copyright © 2017 Pearson Education, Inc.6-27 Job Evaluation Qualitative Approaches  Simple ranking plan  Paired comparisons  Alternation ranking  Classification plans Copyright © 2017 Pearson Education, Inc.6-28 Internally Consistent Compensation Systems and Competitive Strategy  Internally consistent pay systems may reduce a company’s flexibility to respond to changes in competitors’ pay practices  Narrowly defined jobs Copyright © 2017 Pearson Education, Inc. 6-29 O*NET Categories  Experience requirements  Occupational requirements  Occupation specific requirements  Worker requirements  Worker characteristics  Labor market characteristics Copyright © 2017 Pearson Education, Inc.6-30 O*NET Content Model Copyright © 2017 Pearson Education, Inc.6-31 Experience Requirements  Experience and training  Related work experience  On-site training  On-the-job training  Licensing  Licenses and certificates  Formal education  Additional education and training  Organization and agency requirements  Legal  Employer  Union, guild, professional association Copyright © 2017 Pearson Education, Inc. 6-32 Occupation Requirements  Generalized work activities  Organizational context  Work context Copyright © 2017 Pearson Education, Inc.6-33 Occupation-Specific Requirements  Occupational skills  Occupational knowledge  Tasks  Duties  Machines  Tools  Equipment Copyright © 2017 Pearson Education, Inc. 6-34 Workforce Characteristics  Labor market information  Occupational outlook Copyright © 2017 Pearson Education, Inc.6-35 Worker Requirements and Characteristics  Requirements  Basic skills  Cross-functional skills  Knowledge  Education • Characteristics  Abilities  Interests  Work styles Copyright © 2017 Pearson Education, Inc. 6-36 O*NET Content Model: Worker Characteristics (sample of full list) Copyright © 2017 Pearson Education, Inc. 6-37 Abilities •Cognitive abilities • Verbal abilities 1. Oral comprehension 2. Written comprehension 3. Oral expression 4. Written expression • Idea generation and reasoning abilities 1. Fluency of ideas 2. Originality 3. Problem sensitivity • Quantitative abilities 1. Mathematical reasoning 2. Number facility • Memory 1. Memorization • Perceptual abilities 1. Speed of closure 2. Flexibility of closure 3. Perceptual speed O*NET Content Model: Worker Requirements (sample of full list) Copyright © 2017 Pearson Education, Inc. 6-38 Basic skills • Content 1. Reading comprehension 2. Active listening 3. Writing • Process 1. Critical thinking 2. Active learning 3. Learning strategies Cross -functional skills • Social skills 1. Social perceptiveness 2. Coordination 3. Persuasion • Complex problem -solving skills 1. Problem identification 2. Information gathering 3. Information organization Using O*NET  HR professionals consult the O*NET user’s guide and most current O*NET database  U.S. Department of Labor Employment and Training Administration at: http://online.onetcenter.org Copyright © 2017 Pearson Education, Inc. 6-39