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