This project will give you hands-on practice in a context that reflects the real-world. Projects may span several months and you will need to check in with stakeholders to present your progress. This project is due in Unit Seven and you will have the opportunity to submit ungraded work-in-progress for formative feedback from Units one through six.
- Task: Contact a Human Resources Department Professional of your choice for any available materials regarding the Compensation Management System: i.e. hiring practices, current position(s), policy, procedures, etc. used.
- Follow up: You are to develop a position provided by the HR Department Professional, or one approved by your instructor by completing these nine steps. There are questions at the end of each step. Answer each question in one or two sentences in a word document.
- Resources to assist you:
- O-NET Pages 128-132 of our Textbook. Demonstrate that you have a working knowledge of this managerial tool.
- Task: Design a Compensation System.
- Follow up: Complete these six steps to develop your compensation system. The regression analysis can be done in Excel, or some other appropriate software (SPSS, etc.).
- Resources to assist you:
Submit a word document with both Parts A and B by Sunday, 11:59 p.m. (CST) Unit 7.
- All writing is to be completed in APA Format. Summaries should include 3 to 5 references. You may select from Reference List provided.
- Proof Read and Spell Check your work. Spelling and Grammar are critical in all personal and professional documents. First Impressions really do matter!
Project example steps
Part A: Nine Steps
Job Analysis: Determine the kinds and levels of knowledge, skills and the number of qualified employees required to achieve organizational objectives, and that promotes organizational success and profitability.
Job Analysis involves the identification and description of what is happening on the job. Job Analysis is the first step in designing and implementing a Compensation System. The objective in completing a Job Analysis is to identify the content of the job, the knowledge and skills necessary to perform the job successfully, and the conditions under which the job is performed.
There are Five Procedures commonly used for collecting Job Analysis information:
- Combination of any of these
Whatever method is used, job content must be identified clearly and concisely through the use of activity statements.
There are several Job Analysis Methodologies: Department of Labor (DOL) Methodology 1934, the U. S. Employment Services (USES) began a study to identify through Job Analysis, the common denominator of jobs, regardless of industry. The USES and the Employment and Training Administration of the U. S. Department of Labor (DOL) developed a methodology for analyzing and classifying job content.
The DOL Methodology first classified job analysis into two major categories:
- Work Performed
- Worker Traits or Characteristics.
Work performed is further sub-divided into:
- Worker Functions
- Work Fields
- Material, Products, Subject Matter, and Services.
Worker Traits have five sub-headings:
- Traveling Time
- Physical Demands and Environmental Conditions.
Oâ€™NET: Over the last quarter of the twentieth century, the U. S. Department of Laborâ€™s Employment and Training Administration undertook a massive effort to update and refine the 60-year-old Dictionary of Occupational Titles (DOT). This effort resulted in the production of O-NET (Occupational Information Network) System. By November 2003, the O-NET System included the O-NET Data Base. O-NET Online and O-NET Career Exploration Tools.
O-NET is an easy-to-use database that runs on a Windows-based personal computer. It contains comprehensive information on job-requirements and worker competencies.
QUESTION: Why is it necessary to perform a Job Analysis?
Job Description: Design jobs that (1) support a desired organizational structure that in turn ensure organizational effectiveness; (2) are compatible with organizational culture and philosophy; and (3) permit each jobholder to recognize the relationship between job activities and the common purpose of the organization.
Job Description is a tool used to help managers meet legal requirements and aid in industry relations and collective bargaining procedures. The Job Description is used in the following human resources and compensation management functions:
- Training and Development
- Pay Grade
- Pay Structure Design
- Compensation Surveys
- Completion of Performance Appraisals
The Elements of a Job Description include:
- Job Title
- Job Summary
- List of Responsibilities and Duties
- Job Employment Standards â€“ which includes:
- Environmental or Work Conditions
- Knowledge Skills
- Abilities necessary to do the job
QUESTION: Describe the major sections of a job description. What purpose does each section serve? How does Qâ€™NET help in writing a Job Description?
Job Evaluation: Determines relative worth of all jobs to ensure fair and equitable pay treatment for all employees.
A number of Methodologies are available for establishing the worth or value of jobs. The term job evaluation is used to identify various methodologies that provide a hierarchy or ordering of jobs according to some concept of value or worth of the employer. Two general ways of classifying job evaluation methods are those that investigate the job as a whole and those that investigate the job from a variety of components. These components are frequently labeled compensable factors. Major methods using compensable factors are point-factor, factor comparison, and multiple regression-based methods. Seldom is it possible to use one job evaluation method for all employees. It is common to use at least one method for all nonexempt employees; a second method for mid-level managers and professionals, and at least a third method for senior managers and top executives.
QUESTION: What is a benchmark or key job? Why are these kinds of jobs so critical in various job evaluation methodologies?
A Point-Factor Method of Job Evaluation: Evaluate job content using a process that is understood by all employees and recognized as fair and just.
The Factor Evaluation System (FES) is the application of a point-factor method of job evaluation, to establish the foundation for a motivating pay plan. Most well-designed point-factor job evaluation methods will produce similar hierarchical results or internal equity relationships. Point-factor job evaluations depend on the evaluatorsâ€™ knowledge of the job to be evaluated and the evaluatorsâ€™ skills in the use of the job evaluation methodology. Point-factor evaluation ratings can be manipulated by incumbents, supervisors of the jobs being rated, or the raters themselves. Evaluation methods such as FES have conventions that assist raters in recognizing similarities and differences among jobs. The ultimate strength and test of point-factor ratings occur when all job ratings by organization, by work unit, or by occupation are compared factor by factor. The factor-comparison process is made readily available through the use of spreadsheet software programs.
QUESTION: How does FES differ from other point-factor job evaluation methodologies? Give examples of bobtailing in FES.
Surveying Market Pay and Compensation Practices: Recognize what competitors for comparable jobholders are paying in relevant labor markets to permit organizations to attract and keep competent employees.
The compensation survey facilitates an understanding of the competitive forces in the market-place regarding pay practices. Recognizing and relating their own pay structure to compensation trends is useful to organizations in hiring and retaining competent employees, in promoting worker productivity, and in developing an adequate and acceptable pay structure. Steps in conducting a compensation survey include deciding the data needs of the organization, deciding where the data will come from, determining the survey methods, and determining the information collection method. Survey data can be gathered through matching benchmark jobs, classes, or by using the occupational survey method, the job evaluation method, as well as, broad classification methods. Possibly the greatest value of a survey is that it informs the user of what is happening in the marketplace.
QUESTION: Explain why an organization must relate to a variety of labor markets when conducting a compensation survey. What is meant by the scope of the survey? Describe some of the factors that affect the scope of a survey.
Designing A Base Pay Structure: Develop a clear link between work required, performance demonstrated and pay provided to each employee.
Pay structure designers must not operate in a vacuum. They must recognize market conditions. This does not mean that it is necessary to follow market trends blindly. The designer must be able to recognize differences in the pay structure compared with what is being presented by market data and know why these differences exist. The first step in building a pay structure is to set midpoint, minimum, and maximum rates of pay, including minimum and maximum rates of pay for each pay grade and for the organization as a whole. The number of grades, range of pay within each grade, the amount of overlap between adjoining pay grades, and the difference between grade midpoints must be determined. The pay structure weaves together internal requirements, and enables the organization to compare itself with its competitors in the human resources market place. The ability to make market comparisons, as well as, the ability to relate to economic changes, permits the organization to raise the entire level of the pay structure when necessary, making it competitive with its environment without changing internal relationships
QUESTION: Why would an organization use more than one pay structure? Describe some of the factors that influence the design of a pay structure.
Team-Based Pay In A Knowledge-Based World: Integrate the development and understanding of work and role requirements to ensure team success.
The use of teams is becoming increasingly popular and more widely employed within contemporary organizations. Teams of employees can be delegated the authority to make a wide variety of work-related decisions that were once the domain of managers and professional staff personnel. The team has the authority to determine layout of equipment and design of workplace operations. Traditional job analysis, job evaluation, pay structure design, and market pay analysis practices are being modified to support team operations.
QUESTION: What are the major characteristics of a team? How are organizations using teams? How is broad banding used in designing a pay system for team members?
Measuring and Paying For Performance: Recognize performance that supports work unit and organizational efficiency by rewarding employee-achieved results and behaviors demonstrated.
More and more organizations are embracing and implementing some kind of pay-for-performance program. Performance management programs are linking employee behaviors and contributions to desired organizational results. Recognizing merit and paying for performance frequently require some kind of performance appraisal. Performance appraisal within a contemporary performance management system involves a clear understanding of job requirements and job expectations between those doing the rating and those being rated. The performance appraisal is a formal process that centers on the identification and measurement of employee contributions and workplace behaviors during a specified period. The ultimate purpose of the Performance Appraisal is to direct the efforts of all employees toward the achievement of organizational objectives and goals. A Performance Appraisal should be fair, accurate, and objective. Government regulations and court rulings have been applied to performance appraisal in attempts to maintain equity. Performance dimensions should facilitate accurate and objective measurement. The design process includes determining the number of intervals and the descriptors to be used in a rating scale and developing performance standards.
QUESTION: Why is it necessary for an organization to appraise performance formally?
- W. Cunningham. T. C. Tuttle, J. R. Floyd, and J. A. Bates. Occupational Analysis Inventory (Raleigh:North Carolina State University, Center for Occupational Education. 1970).
Raymond E. Christal, â€œThe United States Air Force Occupational Research Project. AFHRL-TR7375, â€œOccupational Research Division, Lackland Air Force Base, Texas. January 1974.
Jerry Newman and Frank Krzytofiak, â€œQuantified Job Analysis: A Tool for Improving Human Resource Management Decision Making,â€ paper presented at the Academy of Management, Orlando, Florida, August 15, 1997.
- S. Department of Labor: Administration, Handbook, for Analyzing Jobs (Washington, D. C.: U. S. Government Printing Office 1972). NOTE: This book includes a complete description of the DOL Methodology. It is a valuable reference for anyone involved in Compensation Management Methodology.
Weighing and Rating Compensation Factors (FES)
1963 Equal Pay Act (EPA)
Lottâ€™s Point Method
Bengeâ€™s Factor Comparison Method
Hayâ€™s Profile Method
The NEMA Method
Factor Evaluation System (FES)
Other Job Evaluation Methods:
Time-Span of Discretion (TSD) Method
Decision Band Method of Job Evaluation
Problem-Solving Compensable Factor Method
Benchmark Guide Chart Method
Job Evaluation Methods With Core and Secondary Factors
Using Multiple Regression Analysis in Questionnaire-Based Job Evaluation
Oâ€™NET: Is an easy-to-use managerial database that runs on a Windows-based personal computer. It contains comprehensive information on job requirements and worker competencies.
NOTE: Page 128-132 of our Textbook.
Conclusion: What have you learned from â€œBuilding Internally Consistent Compensation Systems Exerciseâ€? Reference Textbook Chapter 6. In your summary, include and answer the following questions:
- Explain the concept of internally consistent compensation systems.
- Summarize the practice of job analysis.
- Describe the practice of job evaluation.
- Give two examples of job evaluation techniques and briefly summarize each one.
- Explain how internally consistent compensation systems and competitive strategy relate to each other.
NOTE: Proof Read and Spell Check your work. Spelling and Grammar are critical in all personal and professional documents. First Impressions really do matter! Submit your work by Sunday, 11:59 p.m. (CST) Unit 7.
Part B: Six Steps
Get a sample of jobs in a job family.
Analyze those jobs for their relevant KSABs.
Score those jobs appropriately.
Regress the scores against salary data.
Write an analysis of your results.
Write a conclusion. What have you learned from this exercise? In your analytical summary, include and answer the following questions:
- Explain the concept of designing a compensation system
- Summarize the practice of sampling jobs in a job family.
- Describe the practice of analyzing those jobs for their relevant KSABs.
- Give two examples of scoring those jobs appropriately.
- Analyze the regression of the scores against salary data.