Winnipeg Free Press - Section H - - CAREERS -

One of the im­por­tant steps that should be taken in de­vel­op­ing an ef­fec­tive com­pen­sa­tion sys­tem is to con­duct what is called a job eval­u­a­tion process, a com­pre­hen­sive and sys­tem­atic sys­tem for de­ter­min­ing what value each par­tic­u­lar job has to an or­ga­ni­za­tion.

One of the most com­mon job eval­u­a­tion sys­tems is called the point fac­tor sys­tem. This al­lows each job to be bro­ken down into sub-fac­tors that can be mea­sured sep­a­rately and as­signed a point value. This point value is then trans­lated and com­piled into so-called job fam­i­lies and salary ranges. Most fre­quently, the sub-fac­tors in­clude el­e­ments such as skill, which con­sid­ers both aca­demic and on-the-job knowl­edge. An­other fac­tor as­sesses in­ter­per­sonal com­mu­ni­ca­tion and job com­plex­ity.

The sub-fac­tor re­ferred to as ef­fort in­cludes con­sid­er­a­tion for the na­ture of phys­i­cal and men­tal de­mand found in each job. Fi­nally, the sub­fac­tor of re­spon­si­bil­ity in­cludes an as­sess­ment of el­e­ments such as the na­ture of de­ci­sions made in a job and re­spon­si­bil­ity for fi­nan­cial or ma­te­rial re­sources.

Once an eval­u­a­tion in­stru­ment is se­lected, then a sys­tem­atic ad­min­is­tra­tive process must be es­tab­lished to col­lect the job in­for­ma­tion, so that jobs can be rated and eval­u­ated. To do this, em­ploy­ees are asked to com­plete a com­pre­hen­sive ques­tion­naire in which they are asked to re­spond to ques­tions re­lated to the var­i­ous job fac­tors. The ques­tion­naire is thor­ough as re­sponses must be pro­vided with re­spect to the fre­quency of job tasks, whether the tasks are rou­tine or unique, how im­por­tant the tasks are re­lated to the over­all work and how much time each task re­quires.

One of the ad­di­tional val­ues of a job eval­u­a­tion process is that man­agers will find out what their em­ploy­ees are re­ally do­ing. In fact, they may be sur­prised to find a large amount of job creep. In other words, the man­agers will of­ten find that many em­ploy­ees are spend­ing far too much time on tasks the man­ager may not see as im­por­tant.

While an or­ga­ni­za­tion may choose to have an ex­ter­nal ven­dor con­duct the job eval­u­a­tion, the most ef­fec­tive way is to train an in­ter­nal group of ob­jec­tive em­ploy­ees to con­duct the eval­u­a­tion. The best par­tic­i­pants for this process are em­ploy­ees who can see the big pic­ture and un­der­stand how most jobs fit into the or­ga­ni­za­tion. Next, the eval­u­a­tion com­mit­tee must be pro­vided with in-depth train­ing on the whole process.

Un­der­tak­ing a job eval­u­a­tion process also re­quires com­mu­ni­ca­tion to em­ploy­ees, as many will be­come anx­ious and wor­ried about their job. On the other hand, you can count on at least one group of em­ploy­ees who au­to­mat­i­cally think this process will re­sult in a raise. Em­ploy­ees need to re­ceive com­mu­ni­ca­tion on how the job eval­u­a­tion process will roll out within the com­pany, how they are ex­pected to par­tic­i­pate and what will hap­pen with the re­sults.

Once the jobs are eval­u­ated, they are placed into what is called job fam­i­lies based on the num­ber of points as­signed. So for in­stance, a se­cu­rity guard and a re­cep­tion­ist with the same num­ber of value points will be placed within the same job fam­ily. These job fam­i­lies and their as­signed points are re­viewed many times to val­i­date the rat­ings and en­sure the cor­rect­ness of the fi­nal point as­sign­ments.

Once this is com­plete, an anal­y­sis is con­ducted to de­ter­mine if some jobs of the same value are out of align­ment with re­spect to the over­all com­pen­sa­tion. This anal­y­sis will de­ter­mine if jobs are over­paid and/ or un­der­paid. At this point, the or­ga­ni­za­tion will have to make sev­eral de­ci­sions with re­spect to cor­rect­ing the mis­align­ment, be it over­paid jobs and/or un­der­paid jobs. These de­ci­sions re­quire con­sid­er­able dis­cus­sion and plan­ning.

While the job eval­u­a­tion process is stren­u­ous and time con­sum­ing, to say the least, once com­pleted the or­ga­ni­za­tion will have a sys­tem that will last for many years. A job eval­u­a­tion process is es­pe­cially help­ful when mis­align­ment is ram­pant within an or­ga­ni­za­tion and is also uti­lized af­ter a merger and/or ac­qui­si­tion or when roles have dras­ti­cally changed. Once the sys­tem is in place, newly cre­ated roles can be eval­u­ated and then eas­ily placed within the salary ranges set up. Fi­nally, the ques­tion­naire pro­vides suf­fi­cient in­for­ma­tion for spe­cific job de­scrip­tions to be set up and ap­proved.

Po­ten­tial can­di­dates and cur­rent em­ploy­ees alike pay at­ten­tion to com­pen­sa­tion. If peo­ple do not have a sense of “fair felt pay,” be­lieve me, they will be­come dis­grun­tled and will leave for bet­ter salaries else­where. So, if you have ar­eas of high turnover due to com­pen­sa­tion is­sues and/or if there is a good deal of salary mis­align­ment in your or­ga­ni­za­tion, now is the time to re­view your com­pen­sa­tion prac­tices and to use a process such as job eval­u­a­tion to amend any ar­eas of chal­lenge.

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