Job Analysis:
Examine what technique[s] you would use to conduct a job analysis on the job you described in
the exercise for this week.
Your initial post should be at least 250 words in length. Support your claims with examples from
required material in addition to 1 outside scholarly source and properly cite any references.
4
Job Analysis and Evaluation:
Foundation of Compensation
and Benefits Systems
AbleStock.com/Thinkstock
Learning Objectives
At the conclusion of this chapter, students will be able to:
1. Discuss why internal consistency for compensation systems is important.
2. Discuss the major laws impacting job analysis and job evaluation.
3. Explain what a job analysis does and why it is needed.
4. Explain what a job evaluation does and why it is needed.
5. Explain compensable factors.
6. Discuss what difficulties a small company can run into in conducting a job analysis and job evaluation and
what can be done to overcome those difficulties.
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Introduction
How much will I get paid?
How many vacation days do I get?
What insurance coverage do I have and how much does it cost?
How can I get a raise?
Do I get a bonus? If so, how much?
In order to adequately answer questions like these for its employees as well as job candidates, a company needs to have a cohesive approach to providing compensation and benefits.
Before a company can design its compensation and benefits system, however, it must first
define what jobs and tasks are performed by employees in the company. This is a process that
is much more difficult than it initially sounds, and it consists of more than simply reviewing
job descriptions. Only then can a company strategically, and not reactively, determine how to
pay and reward those performing the work.
In this chapter, we will discuss job analysis and job evaluation, the foundation of compensation and benefits systems. We will begin, however, by briefly discussing the idea of internal
consistency as it is an underlying goal when creating a compensation and benefits system.
From a compensation perspective, internal consistency refers to the relative value of each
job within a company compared to every other job. Internally consistent compensation systems establish a hierarchy designed to provide order to a firm’s compensation system. Internal consistency uses KSAOs, which stands for knowledge, skills, abilities, and other factors, as
the basis for creating the hierarchy of jobs within a firm. Every job requires the incumbent to
possess certain types of knowledge (K), the capacity to use particular skills (S), specific jobrelated abilities (A), and other characteristics (O) such as particular aptitudes. In some
instances, personality variables relative to the job are also evaluated.
The goal of internal consistency is to ensure
that jobs requiring higher levels of KSAOs
Critical Thinking
are eligible for higher levels of rewards.
Job analysis and job evaluation are used to
Why is internal consistency important?
establish an internally consistent job and
How can it be achieved?
compensation system. We will explore each
of these topics in full detail. First, we turn
our attention to determine what each job
entails. This information is needed so that the company can then determine the value of each
job within an organization to make a determination of how to pay each job.
4.1 Job Analysis
A job exists to fulfill an organizational function. The job analysis documents what that function is and how it is fulfilled. More specifically, a job analysis is the systematic process used
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to determine what a job entails, both in terms of the content and duties of the job, as well as
what is required from the worker to perform the job. It determines what a worker does in a
particular job, under what kinds of environmental conditions, and while using what specific
types of knowledge, skills, abilities, and other characteristics (KSAOs) in order to accomplish
organizational goals. Sometimes, the terms work analysis or role analysis are used to describe
this process. The terms have slightly different nuances—for example, the term work analysis
is capturing the idea that the work an employee does is fluid and not always tied to a specific
job, while role analysis looks at the role the job plays within the organization instead of the job
itself since the role doesn’t typically change but the specific ways of completing the job might.
Overall, however, all three terms capture the concept of needing to know what is being done
in the organization as well as how and with what skills. Therefore, these terms are often used
interchangeably; we will use job analysis for our discussions.
To understand why people behave as they do in the workplace and to improve their job effectiveness, we must know what they do. Therefore, a job analysis is the first step in employee
selection, training, performance measurement, and other personnel programs.
It is important to understand that a job analysis is an evaluation of the job, not the person. A
job analysis determines the skills and abilities a person needs to do the job, but it does not
evaluate individual workers. This is a key distinction that often gets blurred. Performance
measurement, discussed in Chapter 5, is the mechanism used to evaluate individuals performing a job.
A job analysis documents what occurs on the job. However, while job titles or descriptions
may be outcomes of the job analysis process, they alone are not enough to convey the details
of the job. A thorough job analysis is a way to ensure common understanding of the job across
different users and perspectives. Before we get into these details, however, let’s gain an understanding of the legal reasons for conducting a job analysis.
Legal Considerations for Job Analysis
As we learned in Chapter 2, there are many laws governing issues of compensation and benefits. There are three key ones that impact a job analysis: (1) Title VII of the Civil Rights Act,
(2) the Americans with Disabilities Act, and (3) the Equal Pay Act.
Title VII of the Civil Rights Act
Title VII of the Civil Rights Act prohibits discrimination in employment based on race, color,
religion, sex, and national origin. A job analysis focuses on the requirements of the job and
not on the individual. This helps ensure that the company does not inadvertently discriminate
against an individual based on one of these protected classes.
Americans with Disabilities Act
A job analysis defines the key elements of a job, including the essential functions, the working environment, and the physical demands of a job. Since the Americans with Disabilities
Act prevents discrimination against a qualified individual with a disability in employment
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matters, the job analysis can be used to help determine if the person is qualified—can perform the essential functions of the job, with or without reasonable accommodations—and
what reasonable accommodations are needed so that a person with a disability could perform the job. By performing a job analysis, a company can determine if a person meets the
qualifications for doing the job as well as what type of accommodations might be needed to
help ensure compliance with the Americans with Disabilities Act.
Equal Pay Act
The Equal Pay Act stipulates that men and women
who are employed by the same company must
receive the same pay if their jobs are identical or
very similar. Specifically, if the jobs demand equal
levels of skills, responsibility, and effort and if
their working conditions are the same, then men
and women in those jobs must be paid the same.
The criteria that are used to determine if the jobs
are identical or very similar and therefore qualify
under the act—the skills, level of responsibility, and
working conditions—are found in the job analysis.
Legally Defensible Job Analysis
Given these laws, it is important that a company
has a well-constructed job analysis for each job so
that it can make sure it is not discriminating against
any protected person with regard to its jobs. What
makes a well-constructed job analysis? Thompson
and Thompson (1982) found that there are nine
factors that are important and necessary to having
a legally defensible job analysis. They are as follows:
Everett Collection/Superstock
The fight for equal pay—a protest at
the offices of the Houston Chronicle in
1970.
1. A job analysis must be performed and be
for the specific job. This means that the
company has done a job analysis for the
specific job and didn’t just “make it up” or use a job analysis for another job.
2. Results should be in written form. This alleviates having to rely on someone’s
memory of what was done and helps ensure consistency.
3. Data should be collected from multiple up-to-date sources by expert job analysts.
This is to ensure that the job analysis is accurate and covers all perspectives of the
job.
4. Data should be collected from a large and representative pool of subject matter
experts (SMEs). Subject matter experts are people who are recognized as experts
for their knowledge in a particular area or topic. This makes sure that a sole expert
was not relied on as the source of information as well as that the experts chosen
were knowledgeable in the particular job being analyzed.
5. The procedures used should be described in detail. This eliminates any doubt as to
what techniques were used and what factors were considered in the analysis.
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6. Tasks, duties, and activities should be identified and included in the analysis. These
are critical components that need to be included since they are the basis for how
employees know what to do for their jobs as well as factors that impact their performance evaluations.
7. The most important tasks should be identified, especially for employee selection.
This ties the job analysis (what is the job) to employee selection (who will do the
job). Employee selection is beyond the scope of this book and will not be covered in
detail; however, as mentioned in the “Uses of a Job Analysis” section below, employee
selection is one of the outcomes of a job analysis. The job analysis provides the
company with a detailed job result that it can then use to select the right worker for
that job.
8. The entry-level competencies needed for the job should be specified. This means setting the minimum requirements needed to perform this job. Some requirements are
needed immediately upon beginning a job, while others can be learned. It is important to know what employees must
be able to do on day one and what
they can learn to do after beginning
Critical Thinking
a job.
9. At a minimum, the KSAOs and tasks
What are some of the aspects of a
should be specified. This entails
legally defensible job analysis? Describe
being specific about which knowlinstances in your own work experience
edge, skills, abilities, and other attriin which these aspects have been
butes are needed for the job as well
applied.
as making sure that actual on-the-job
behaviors are included.
Goal and Objectives of a Job Analysis
The overall goal of a job analysis is to translate what is actually done in a job to something that
can be put down in writing. This means that the understanding of the job cannot be vague—
instead, it must be specific, detailed, and distinct (Harvey, 1991, 2012). Accordingly, these are
the key objectives of a job analysis:
• Identify behaviors and tasks that must be done in order for the job to fulfill its
function.
• Identify the knowledge, skills, abilities, and other characteristics (KSAOs) that are
needed to perform job functions.
• Identify the work environment or context in which the job exists (work schedule,
physical location, etc.).
• Record the materials, tools, and equipment needed to perform the job.
• Document the amount of time spent by employees in accomplishing major work
tasks, goals, etc.
At a macro level, measurable or observable KSAOs and behaviors critical to successful job
performance are often grouped together as competencies. You will encounter competencies
more when considering employee selection and training versus compensation, but be aware
that these macro level considerations are what are typically meant when a company refers to
“core competencies” and are often identified in a job analysis.
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Additionally, you want the job analysis to be reliable. A reliable job analysis will produce
consistent results upon repeated evaluation or under similar conditions. That is, if several
analysts conduct a job analysis in a similar manner (e.g., using the same data-gathering techniques), their methods are reliable if they reach similar conclusions. Ultimately, our concern
is with the validity (i.e., accuracy) of the job analysis, and reliability is a necessity for accuracy.
Elements in a Job Analysis
A job analysis involves looking at both the actual work to be done and the tools needed by the
worker in order to get the work done. Specific and detailed information needs to be gathered
about each of these aspects—the work and the tools—in order to understand what is actually
done on the job. Below are the key elements that are included by the Department of Labor and
most organizations when conducting a job analysis.
Behaviors and Tasks
Behaviors and tasks relate to the activities the worker does while performing the job. These
activities are both tangible, which can be seen or observed, and intangible, which cannot be
directly seen or observed. This element covers the worker’s actions and activities used in
getting the job done. Consider the job of payroll clerk. This job involves keeping track of data
about individual employees and ensuring they each get paid the correct amount and on time.
For this job, tangible tasks would involve activities such as entering data into a spreadsheet,
while an intangible activity would be analyzing the data once it is entered.
Roles and Relationships
Roles and relationships encompass how the job fits within the overall organization and what
interactions the person in the job has with information and other people, both inside and outside the organization. For example, for a payroll clerk position, the job fits within the accounting function that is used to support the company’s human resources department, which supports the company’s overall operations. The position of payroll clerk entails working with
other accounting personnel and managers, among others, within the company and with
third-party vendors outside the company. An organizational chart (see Figure 4.1) shows
boundaries, reporting relationships, communication channels, and a visual representation of
job relationships.
Traits
Traits are those elements of education, vocational or technical training, personal characteristics, aptitude, and attitude required of the worker. For our payroll clerk example, such traits
could include having an associate’s degree, being precise and accurate, and paying attention
to detail.
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Job Analysis
Figure 4.1: Sample organizational chart
An organizational chart helps outline how a position interacts with the rest of the company.
CEO
CFO
VP of HR
COO
VP of Finance
Manager Benefits
VP of Operations
Manager Payroll
Manager Selection
Payroll
Clerk
& Other
Employees
Employees Employees Employees Employees Employees Employees Employees Employees Employees
Treasurer
Controller
Manager - Manager Distribution
R&D
Manager Products
VP of Sales
Manager Marketing
Manager Bus. Dev.
Materials and Technology
Materials and technology cover the tools, equipment, and other aids that a worker would
need to complete the job. For our payroll clerk, the tools needed range from basic paper and
pencil to a computer to a filing cabinet. A more mechanical job, like a car mechanic, would
involve specialized equipment such as a jack to lift a car or a specific type of wrench.
Physical and Mental Demands
Physical and mental demands refer to the conditions required of the worker to perform the
job. This covers what is physically demanded of the worker, such as standing or sitting for
long periods of time or lifting a heavy weight, as well as the mental demands on the worker,
such as how stressful the job is and what the impact of making decisions is. For example,
an ER doctor faces more mental demands due to the life-and-death decisions being made in
critical situations, whereas a payroll clerk does not face that level of instant impact based on
decisions made.
In our payroll clerk example, the physical conditions are likely to involve frequently sitting
at a desk and working with a computer. While this may not sound particularly challenging,
it is important to consider what is needed relative to the Americans with Disabilities Act to
determine if a particular handicap may be reasonably accommodated by an employer. In our
example, if the clerk is blind, it is likely the job context would involve providing access to
auditory information from the computer and the use of a headset or semiprivate office so
sound would not affect nearby workers. For some companies and jobs this would represent a
reasonable accommodation and for others it would not.
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Work Environment
The work environment consists of the environmental conditions that a worker operates in.
This section details areas such as the noise level, the temperature, and the cleanliness of the
area where the worker operates. Our payroll clerk would most likely operate in a typical office
setting with a low to moderate noise level, controllable temperature, and a clean, nondusty
area.
O*NET
The U.S. Department of Labor provides an invaluable starting place for job analysis, job evaluation, and writing job descriptions, known as the Occupational Information Network
(O*NET). It allows anyone—job seekers, employees, employers, job and compensation professionals, and any other interested party—to browse occupations to see what the work
involves, what specific tools are used, and what specialized training (e.g., licenses, educational
level) are required. O*NET (www.online.onetcenter.org) is a continuously updated database
that contains hundreds of job-related descriptors. The database also provides seamless connectivity to the site’s career exploration and assessment tools for job seekers, students, and
anyone else interested in exploring, identifying, finding, or changing jobs, occupations, or
careers.
Each job, each occupation, and each career requires a different mix of and a different emphasis on knowledge, skills, abilities, and other characteristics required to perform a job effectively. Such distinguishing elements are used to explain and define important features of an
occupation using standardized, measurable sets of variables referred to as descriptors. The
daily aspects and activities of the job together with the interests of a typical worker doing that
specific type of work are available. There are 277 descriptors collected by the O*NET program
in addition to others provided by various federal agencies. O*NET also provides a taxonomy
(a scheme of classifications) to define the set of all occupations. This classification system,
last revised in 2010, includes 974 occupations.
O*NET has replaced the Dictionary of Occupational Titles and in most cases should be used.
However, the Dictionary of Occupational Titles is still provided on the Department of Labor’s
website (www.oalj.dol.gov/libdot.htm) because it provides a mechanism for researching
past jobs and because it was a standard reference in several types of cases adjudicated by the
Office of Administrative Law Judges. The last published edition of the Dictionary of Occupational Titles was 1991.
To see the O*NET report for a payroll clerk, visit the website (http://www.onetonline.org/
link/summary/43-3051.00).
Job Analysis Techniques
Now that we know what needs to be included in a job analysis, how do we get that information? There are numerous techniques that can be used to gather the detailed information
about a job that is needed in order to perform a job analysis. Some techniques allow you
to gather a lot of information cheaply, while others are more expensive but allow intensive
examination of the job. You will have to determine what time and budget constraints you have
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and then pick the best methods for your particular situation and company. Additionally, you
need to determine which positions and how many are to be examined.
Before getting into the techniques used to gather information, you need to consider the
sources of that information. There are four basic sources of job information. Each has its own
advantages and disadvantages, so you will want to use more than one source.
• Incumbent—Since this is the person doing the job, the incumbent will know more
about what he or she actually does than other sources will; however, the information
provided isn’t always accurate or reliable. The incumbent may have some bias, may
want to inflate his or her status, or may not understand the context of the job in relation to the overall operations of the company.
• Supervisor—The supervisor knows what is supposed to be done in the job but not
necessarily what is actually done or how it is done. The supervisor also is not actually doing the job, so he or she may not understand the full scope or nuances of the
job.
• Other Knowledgeable Individuals—These are individuals such as customers (both
internal and external to the company), subordinates, industry analysts, and executives that have some, usually specialized, knowledge of the job.
• Preexisting Information—This uses information that is already available, such as
previous job analyses, job descriptions, policies and procedures manuals, or outside
sources like O*NET.
What follows are the basic techniques used in conducting a job analysis. You will often see
these techniques presented as if they are independent—they aren’t. They should be used in
conjunction with each other to give you a more complete picture of the job.
Interviews
Interviews are probably the most commonly used technique because they are flexible and
easy to understand. However, they are also the most common technique that is not used well
because people assume they know how to do an interview and don’t need to be trained on
how to properly conduct one. Interviews may range from completely unstructured (such as
“Tell me all about your job”) to highly structured interviews that involve a detailed checklist of
every possible aspect of a job. Usually, the best and most efficient approach falls somewhere
between the two extremes.
Conducting an Interview
To conduct an interview properly, you need to follow a structured procedure to ensure consistency across interviews and to make sure you are gathering all pertinent information. The
first step in the process is to clarify why you are talking with this particular person, keeping
in mind what information you can learn from the individual as well as the context and overall
goal of the job analysis. An interview with an incumbent, the person doing the job, will be different from an interview with a supervisor, which in turn is different from an interview with
senior management.
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The next step is to create an interview guide that has the questions to be asked as well as
room for notes. When creating the interview guide, remember you are looking for the whole
picture of the job—what is done, who does the work, the resources available, the environment in which the work takes place, and the end result. You are trying to determine all the
components that go into the job. An example of an interview guide to use when conducting a
job analysis is presented in Figure 4.2.
Keep in mind that an interview guide is not universal. You will need to tweak it to fit the job
you are looking at since not all questions are appropriate for every job. Also, you will want to
allow room for follow-up questions and time for discussion. As an interviewer, it is usually a
good idea before concluding the interview to end with a “what have we left out of this discussion” question to make sure you are getting a complete picture of the job and capturing the
essence of what the job entails.
When conducting an interview, you need to be structured, yet flexible. This will enable you to
obtain standard information while also providing room to adjust for the flow of the interview.
Listed below are some hints for successful interviewing:
• Take notes.
• Use the interview guide as just that, a guide, not a recipe you have to follow line by
line—don’t ask questions if they have already been answered by an interviewee in
response to a different question.
• Be professional, but try not to be too formal; put the interviewee at ease.
• Start off by saying something like, “I’m here to learn from your expertise; you are the
expert in your job and my goal is to learn about your job from you.”
• Get complete answers to your questions. Ask follow-up questions such as these:
• Give me another example.
• Walk me through the process.
• What else is involved?
• When does this occur?
• When/how often does this occur?
• What happens/happened next?
• Ask for clarification of jargon or professional language you do not understand. (You
can say, “You are the expert here; tell me what that means.”)
• Don’t accept generalizations; get details.
• Be unbiased—you aren’t there to judge what the person is saying.
Types of Interviews
Interviews are typically conducted face-to-face on an individual basis. There are some times,
however, when other methods are more conducive, such as the special cases below.
Panel Interview—A panel interview involves multiple people interviewing
one person. A panel interview would be used when multiple people need
to understand the job or when experts are needed to ask more technical
questions.
Focus Group—A focus group, also called a group interview or workshop, typically involves one person interviewing multiple people. Focus groups are used
when you want the group to interact and build on each other’s ideas. They
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Section 4.1
Job Analysis
Figure 4.2: Sample interview guide for conducting a job analysis
Determining all the components that go into a job can be complicated. It’s best to create a structured
procedure that will help you gather all the important details.
Sample Interview Guide for Job Analysis
BACKGROUND INFORMATION:
Employee’s Name
Job Title
Department
Interviewer’s Name
Date of Interview
PURPOSE OF JOB:
JOB DUTIES (what, how, when, why):
Main Duties and Responsibilities
Daily Tasks
Weekly Tasks
Quarterly Tasks
Periodic Tasks
Duties This Job Shouldn’t Do
Duties Not Included in Job Description
COMMON ISSUES, PROBLEMS, or OBSTACLES:
IMPACT of JOB on COMPANY:
Financial
Other
IMPACT of ERRORS:
On Job
On Others
On Company
EDUCATION REQUIREMENTS:
Degree(s)
Certifications/Licenses
EXPERIENCE REQUIRED:
TOOLS REQUIRED:
Tools, equipment, etc.
SUPERVISION REQUIRED:
Of the Incumbent
By the Incumbent
LEVEL of DECISION MAKING:
PHYSICAL DEMANDS:
Standing/Kneeling/Pushing/Pulling/Carrying/
Sitting/Reaching/Climbing/etc.
ENVIRONMENTAL CONDITIONS:
Noise/Temperature/Location/Vibration/
Hazard Materials/Ventilation/etc.
OTHER:
Anything else; anything we’ve missed
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are also used when there are time or schedule constraints since multiple people can be interviewed in one sitting. When putting together a focus group,
make sure the people in the group are of the same level. If you have a manager
in the group with subordinates or lower-level employees, you won’t get full
answers because the manager will typically dominate the conversation and
could intimidate (likely unintentionally) the other employees, who will look
to the manager to gauge what they are supposed to say.
Technology-based Interviews—These interviews are conducted utilizing technology, such as phone, video, and chat, rather than in person. Typically these
are designed to help with logistics for those who are not in the same location
or to save on costs. The interviews can be conducted as a typical interview,
with the procedures we discussed above. Adjustments might need to be made
to account for the technology used and any issues that might arise.
Written Interview—A written interview is an open-ended questionnaire. It
usually starts off with general categories and then leads into specific examples. A written interview is used to gather information from a large number of
people when data collection isn’t feasible with the other methods discussed
due to time and logistics issues. A limitation of the written interview is that
it does not allow for follow-up questions based on answers the person gives.
You lose out on the interactions between the interviewer and interviewee that
often lead to insightful information.
Observation
Using observation to understand a job is one of the oldest approaches. Frederick Taylor’s
scientific management was all about using observation to get information. The observation
technique for conducting a job analysis is especially important if you are not familiar with
the job being analyzed. It helps you get a “day in the life” perspective of the job and gathers
information beyond what would be provided in interviews and questionnaires. Observation
can also help with gaining knowledge about the vocabulary, tools, tasks, and environment
of a job. An added benefit is if the observer can participate in the job, as long as it is feasible
and practical for the observer to do so. Additionally, judges and lawyers in cases challenging
employment procedures appear to put more faith in a job analysis if it includes observation.
Below are some hints to help make the observation technique effective:
•
•
•
•
Take notes.
Remember the goal of the job analysis (selection, training, etc.).
Be unobtrusive; ask questions but don’t get in the way.
Observe for enough time to see a representative sample of the job (it is better to observe
one incumbent for a decent length of time than several for short periods of time).
• Observe during peak times.
• Make note of both the frequency and duration of behaviors.
Questionnaire
A questionnaire is a written set of questions about a job that ask respondents to rate certain aspects of the job (KSAOs, tools, equipment, etc.). The questionnaire, either online or in
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paper-and-pencil format, is administered to employees and supervisors who know the job,
to subject matter experts, to former job incumbents (if possible—e.g., they still work at the
company but in different jobs), and to customers. This technique is useful as a backup to
observations and interviews as it provides a different perspective and additional information
than that gathered through interviews and observations. You can use off-the-shelf or customized questionnaires. They both use the same basic approach: (1) Jobs are broken down
into a set of elements or characteristics and then (2) the selected respondents complete the
questionnaire based on their knowledge of the target job. The questions asked are similar to
those asked in an interview, such as what are the duties of this job; how do you perform those
duties; what do you use in terms of equipment, tools, and so on to perform your job; how
many employees report to you; and what certifications and education are needed for this job.
Some practitioners use only custom measures or specific published measures; however, the
type of measure used should really be based on the situation. Sometimes a custom approach
is needed and sometimes an off-the-shelf approach is best. Both methods have merit. The
custom measures provide more job-specific information, while prefabricated measures allow
you to compare across jobs that are otherwise different. Look at the goal of the job analysis to
decide which type of measures to use.
The most common tailored questionnaire is the Task Analysis Inventory. This questionnaire
collects information from SMEs about ratings of tasks and other necessary information as
determined by the goal of the particular job analysis. When using the questionnaire, you will
want to make sure you document the SME’s expertise and job knowledge as well as the ratings of task importance or frequency. You can modify the questionnaire to adjust for things
such as the relevance of the task knowledge to a new hire, the coverage of the task by the
selection test proposed, the difficulty of task, and the trainability of the task.
Questionnaires can get long and tedious to fill out. To help combat this problem, streamline
the questions as much as possible, format the questionnaires with a professional and clean
look, and break out the different sections to make the questionnaire easier to complete. You
also want to make sure the questionnaire is as easy to understand as possible.
A variation or expansion of the questionnaire is keeping diaries and logs. With this technique,
employees are asked to record significant or important activities on a regular basis and their
reactions, feelings, or speculations about the event in terms of its relevance to the organization’s goals. Another way this technique is handled is by texting or calling employees to
indicate when to record what they are doing at a point in time while they are working. Usually, the messages are randomly distributed throughout the workweek, averaging three times
per week. This technique provides a different angle or perspective for gathering information; however, it uses self-reported data, so the information may not be the most accurate or
unbiased.
Critical Incidents
Critical incidents focus on collecting information about critical aspects of job performance—
both good and bad. It is usually done with a focus group, but most of the formats previously
discussed can be utilized. With the critical-incidents technique, information about the situation, the behaviors involved, and the outcome is collected using specific behavioral examples
of especially good and especially bad performance.
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Section 4.1
This approach requires keeping detailed and ongoing records of key aspects of a given job
that impact the organization and the goals of the business unit in which the job exists. The
record-keeping is ex post facto, or after the fact. That is, the supervisor must record behaviors
based on results of actions previously taken that, in his or her judgment, were particularly
effective or ineffective in terms of desired results. Information must include the events leading up to the situation, a precise description of the actions taken by the employee, the results
of the actions taken, and a judgment as to the amount of control exhibited by the worker
(Antariksa, n.d.; Morgan & Smith, 1996).
This technique should be used in conjunction with other techniques and never alone. It can
be a fun session because incumbents get to talk about the situations that have been most
influential to them on the job; however, it is easy to get off track with this technique. Also, you
can get biased information from this technique as individuals tend to present themselves in
the best light possible.
Flow-Charting
Flow-charting allows people to connect the work performed by several individuals, such as
on a team or between teams of people, whose work impacts the next related team in the production or service process. The advantage of this approach is that individual job boundaries
do not exclude adjacent jobs that impact one another, resulting in a more strategic picture
of jobs in an organization (see Sanchez, 1994). Flow charts can be very useful in graphically
representing processes and work flow.
Choosing the Best Techniques
Choosing which job analysis techniques to use is not always easy. The best advice is to do as
much as you can with the time, resources, and budget available. At a minimum you will want
to do some observations, a few interviews, and a review meeting with SMEs. Additionally,
you will need to be sure to validate that the data collected accurately reflects the actual work,
conditions, and other characteristics
being examined. To do so, use a combination of approaches (e.g., interviews
and questionnaires) and check with
job incumbents, former incumbents,
supervisors, subject matter experts,
and even customers outside of the
organization. An example of this latter item is the recorded message commonly played before a customer service representative comes on the line
indicating that the phone call made
to the company may be recorded for
quality assurance purposes. Alternatively, the customer may be asked if he
iStock/Thinkstock
or she would be willing to stay on the
The task statement for this textile worker could be
phone, or in the chat room for online
“write a project summary report for the supervisor
interactions, for a short survey after
to document work accomplishments.”
the call is completed.
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Section 4.1
The last step in the process of gathering information is to take the narrative information provided
by the different techniques, such as interviews, observations, and so on, and turn it into tasks
(information centered on the work to be done) and KSAOs (information centered on the worker).
Let’s discuss how this is done. First, you need to understand what a task is. A task is defined
as one complete activity with a beginning and an end that is performed by only one person
and results in an outcome that contributes to a product or service. Therefore, you will need
a task statement for each activity or task that an employee will perform. Good task statements should describe the what, how, and why (the who is the worker) of each task—what
the worker does, how the worker does it, and why the worker does it. Below are examples of
poor task statements:
• Attend meetings (problem: not clear what the task is—ask why the action is needed).
• Create, maintain, and audit personnel records (problem: covers three different
tasks—each one needs a separate task statement).
• Schedule work activities (problem: too broad—need to be more specific).
Examples of good task statements are below, with each one covering only a single task and
answering the what, how, and why for each task.
•
•
•
•
•
Attend weekly and monthly staff meetings to discuss priorities for the next week.
Evaluate new operating system software to determine its utility for the office.
Write project summary reports for supervisor to document work accomplishments.
Update computerized personnel data for all employees to maintain current records.
Establish work standards for accounting department based on accounting principles.
The other component needed is the KSAOs for the position. Based on the data gathered
through your job analysis techniques (interviews, observations, critical incidents, etc.), you
will need to detail the knowledge, skills, abilities, and other characteristics that are necessary to perform the job. You want to truly capture what KSAOs are needed by the worker in
order for the worker to be able to perform the job efficiently and effectively. You don’t want to
include unnecessary KSAOs, nor do you want to make the level of KSAOs higher or lower than
that truly needed to perform the job. If there is a KSAO that you would like but is not necessary in performing the job, you can put it under “preferred,” such as “preferred—bilingual
(Spanish and English).”
To use our payroll clerk example, below is an example of a task statement and some KSAOs
that would be created based on the information obtained through the various job analysis
techniques. Note: There will be multiple task statements and KSAOs for each position.
• Task Statement: enters and verifies employee times in the timekeeping system to
ensure accurate recording and calculation of weekly payroll amounts
•
•
•
•
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Note: You wouldn’t want to just list the task as “enters employee times”
because it doesn’t give the why and how that task is done.
Knowledge: knowledge of basic payroll terminology
Skills: skill in operating current versions of payroll software systems
Abilities: ability to perform basic math functions to identify pay administration errors
Other Characteristics: attention to detail
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Section 4.1
Approaches for Conducting a Job Analysis
The previous section discussed job analysis techniques, which are the ways to gather information about the different components of a job. This section covers the approach toward
conducting a job analysis—how you put all the information together. There are two different
basic approaches for this: using a customized approach or using an off-the-shelf technique.
Customized
Using a customized method means the job analysis is done explicitly for that job in that specific company. A person or team is dedicated to conducting the job analysis. An internal or
an external approach can be taken. With an internal approach, someone within the company
who is properly trained conducts the job analysis. In this situation, it is important that the
head of the team, such as the HR manager or director of selection, is a trained job analyst. He
or she guides the overall process and delegates specific steps to others on the team. Working
with the core team members, the head of the team determines which techniques will be used,
who will be involved, and so on, as well as how all information will be gathered and compiled.
The head of the team reviews the completed analysis and makes it final.
With an external approach to a customized job analysis, the same steps are taken as with an
internal approach except that the person or team doing the work is from outside the company.
They are consultants hired to conduct the job analysis. The consultants handle all the details of
the job analysis, with final approval given by the head of HR or other person designated within
the company to be the contact person for the consultants. Before being hired, the consultants
would typically have presented a bid in response to the company’s RFP, or request for proposal.
The RFP details what the company is trying to accomplish, what time frame is available for the
project, and how much money is allocated to the project. Often, multiple consulting companies
will bid on the project and each will submit a bid that details how the consultant will get the project done. After review by the head of HR or other members of the RFP committee, the company
then selects the winning bid and awards the project to that consulting company. The consulting
company then takes over the project, keeping the designated company representatives in the
loop on the process and typically having company employees serve as SMEs on the project.
This approach is used when a company doesn’t have someone within the company who has
the expertise to conduct a job analysis or when the person in the company has the expertise
but doesn’t have the time, or desire, to conduct a job analysis from start to finish. Often, it is
more efficient to outsource the process to experts rather than have someone take on the project along with his or her regular duties.
Off-the-Shelf
With the off-the-shelf approach, the job analysis is conducted using a standardized job analysis process that is not created specifically for the job being examined. A detailed analysis is
done for the job, but in more general terms, and the analysis is packaged in a set format for
other companies to use, with little or no ability to customize it for their specific situations.
This approach offers a cheaper and faster way to conduct a job analysis; however, the tradeoff for the speed and lower cost is loss of customization. Many different off-the-shelf techniques exist. The two examples we will discuss are the Position Analysis Questionnaire (PAQ)
and the Common-Metric Questionnaire (CMQ).
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Section 4.1
Position Analysis Questionnaire
The Position Analysis Questionnaire (http://www.paq.com) is a structured, systematic data
collection and interpretation methodology used to measure job elements and relate them to
human characteristics (McCormick, Jeanneret, & Mecham, 1972). The PAQ evaluates basic
units of work, called job elements, to analyze jobs. Trained analysts then evaluate these elements and rate jobs across dimensions such as information input (where and how the worker
gets information), mental processes (reasoning and other processes that workers use), work
output (physical activities and tools used on the job), relationships with other persons, and
job context (the physical and social contexts of work).
The PAQ is used to
• compare jobs to one another to achieve internal compensation equity;
• create recruiting and selection criteria for jobs by identifying the demands of a given
job and worker aptitudes, interests, and temperaments;
• study the nature of work; and
• together with O*NET, and historically the Dictionary of Occupational Titles, to help
apply the provisions of the ADA in the workplace.
Common-Metric Questionnaire
The Common-Metric Questionnaire (http://commonmetric.com/cmqonline) utilizes general
work activities (GWAs) to describe jobs. The goal is to evaluate all jobs on a standard scale or
“common metric” that allows comparisons across jobs, even when different tasks are performed in the jobs. Thus, the CMQ is designed specifically for comparing different jobs for the
purpose of setting employee-selection standards, developing compensation systems, providing career guidance advice, developing job families, and other such activities.
Uses of a Job Analysis
A job analysis results in a lot of useful information that can be utilized by a company to
Critical Thinking
improve and enhance its operations since it
provides the company with systematic sets
Why can it be said that a job analysis is
of tasks, skills, and tools needed to complete
the basis for most HR decisions?
key functions within the company. The results
from a job analysis can then be used to determine a company’s training, selection, and performance measurement needs. A job analysis can also highlight the need to redesign or reorganize a job as well as future job needs.
Job Description
One basic output of a job analysis is the job description. A job description is a list of the
duties, responsibilities, tasks, working conditions, and other essential elements needed to
complete the job in a satisfactory manner as well as the traits, skills, educational background,
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Section 4.1
Job Analysis
and personality characteristics needed of the worker. The job description tells the worker
what he or she will be doing and what background he or she needs in order to qualify for the
job as well as be successful in it. The job description helps clear up ambiguity about a job
since it details what the position is in terms of duties, responsibilities, tasks performed, and
so on. An example of a job description is shown in Figure 4.3.
Figure 4.3: Sample payroll clerk job description
A job description performs the important function of clarifying a position’s duties, responsibilities, and
tasks performed. It can be a useful tool in training, selection, and performance measurement.
Sample Job Description
Title: Payroll Clerk
Position Overview:
In this position, the employee is accountable for accurately collecting timekeeping information and issuing pay to
employees by calculating earnings and deductions in accordance with legal and company policies and practices
Responsibilities:
• Collect and summarize timekeeping information
• Review and verify source documents
• Enter payroll data using appropriate software
• Process payroll by established deadlines
• Investigate and correct payroll discrepancies and errors
• Adjust payroll accounts due to job moves, salary increases, changes in deductions, etc.
• Update payroll accounts to account for new employees, retirements, and terminations
• Maintain comprehensive records
• Ensure compliance with federal and state regulations and guidelines
• Other duties as assigned
Qualifications:
• High school diploma or equivalent; Associate’s degree in business preferred
• 1+ years of payroll processing experience
• Solid computer and data entry skills
• General math skills
Competencies:
• Detail oriented
• Communication skills—verbal and written
• Customer service orientation
• Confidentiality
• Planning and organizing
• Financial software
Training Needs
A job analysis shows what skills are needed to perform a job. The company can then use that
information to design a training program to improve its workers’ abilities to perform those
skills. The training program can cover soft skills, such as leadership, communication, and conflict resolution, as well as hard skills, such as how to operate a piece of machinery and how to
use spreadsheet and word-processing programs like Microsoft Excel and Word. By knowing
what is needed to perform a job—information derived from a job analysis—a company will
be able to provide the training needed to improve the performance of its workers.
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Section 4.1
Selection Criteria
In order to select the right person for a job, it is first necessary to carefully analyze the
requirements of the job. A job analysis provides this information. It identifies the knowledge,
skills, abilities, and other characteristics (KSAOs) that are needed in order to perform a job.
By knowing this, it can be determined what to look for in new employees. A job analysis also
provides the information needed to give a realistic job preview, including the duties of the job
and the working environment, to job candidates so that they understand what the job entails
and can decide if it is something they want to do and can do. As we mentioned at the beginning of the chapter, a job analysis can provide information that can be used to help prevent
discrimination, a key element that is taken into account in a personnel selection system.
Basis for Performance Measurement System
Whereas a job analysis is the evaluation of a job, a performance measurement system is an
evaluation of the person doing the job. Before a person can be evaluated, it is necessary to
know the details of the job. That’s where a job analysis comes in. It identifies the outputs of a
job as well as the KSAOs needed by an individual to perform a job. A company then uses this
information to evaluate how a person is performing in the job. The company compares what
is required for the job, per the job analysis, to how the individual is actually doing in the job. A
performance measurement system is used to evaluate how much a person should be compensated for a job, the basis for a compensation and benefits system and the focus of this book.
Performance measurement will be covered in Chapter 5.
Redesign Jobs
A job analysis can be used to redesign and reorganize jobs to make them better and more
efficient. By knowing the details of a job, gaps or problems in a job as well as overlap between
jobs can be identified and then fixed. Additionally, sources of discomfort, such as stress, environmental demands, and problems with human-machine interface or ergonomics issues, can
be identified and corrected.
Identify Future Jobs
Sometimes a job analysis must be performed for a job that does not currently exist. Sometimes referred to as a visionary job analysis, this goes beyond simply redesigning a currently existing job. For new jobs, it is necessary to carefully consider who the SMEs for the
position could be. There are no incumbents to serve as experts and, correspondingly, managers do not have previous experience with the position. In this instance, it becomes critically
important to consider why a new job is being created and what function that job will fill in
the organization. Only once the purpose for the job is fully understood can experts be identified, typically based on the tools and technology being utilized, as well as knowledge acquired
from potential experts both internal to and from outside the organization.
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Job Evaluation
Impact of the Use of a Job Analysis on Techniques Used
As we mentioned previously, choosing which job analysis techniques to use is not always easy
and is limited by the time, resources, and budget available. The uses of a job analysis also
impact which job analysis techniques you will use. For example, if the information is to be
used primarily for recruiting potential employees and developing job descriptions, interviewing job incumbents and supervisors, having the information reviewed by SMEs, and using
checklists of duties is likely to be sufficient. Using the PAQ, CMQ, or similar measure, however,
may be better suited for developing quantitative data used for classifying jobs and comparing
them to each other within a given business unit or across business units as part of your selection system or performance measurement system. Of course, this also depends on internal
resources and budgetary issues.
Critical Thinking
A large oil company has decided to
implement an accelerated “highpotential” development program to give
potential high performers exposure to
and familiarity with multiple aspects
of the organization. You must do the
job analysis to use as a basis for setting
the pay for individuals in this program.
What techniques would you use? Any
special considerations? Who would be
your SMEs?
Additionally, a job analysis needs to be
updated periodically to account for changes
in the workforce and the ways things are
done. Even though a job title may stay the
same, the underlying duties and responsibilities of the person will change in response
to changes in the business environment.
For example, the move from typewriters
to computers changed not only the skills
needed but also how work was performed.
Workers now needed to know keyboarding
(“typing”) skills as well as how to operate a
computer and use software programs, such
as word-processing and client relationship
management systems, on the computer. It
also changed the role of the secretary, as
many managers took on the task of creating
their own memos and documents.
A job analysis is a critical building block when developing a compensation system. It impacts
what is done, how it is done, by whom it done, and how the people are selected and paid
within a company. Therefore, a quality job analysis must be performed in order to gather the
critical information needed. The other critical component that provides the foundation for a
compensation system is job evaluation.
4.2 Job Evaluation
After determining what is involved in performing the jobs in the company from the job analysis, you must then determine how they relate to each other with respect to their value to the
organization. This is where job evaluation comes in. Job evaluation is a technique used to
systematically recognize differences in the relative worth among a set of jobs and to establish
pay differentials accordingly. With job evaluation you are breaking down jobs into classes that
can then be assigned a wage category. The arrangement of jobs within the different classes
reflects the values and priorities that management places on various positions. This results
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Section 4.2
in jobs that require greater qualifications, more responsibilities, and more complexity being
ranked higher on the pay scale, and therefore receiving greater rewards, than those that are
ranked lower. Job evaluation can be looked at as “job analysis for compensation.” Ultimately,
the effort that goes into a job analysis and job evaluation results in a wage and compensation structure within the organization. As we will discuss in Chapter 5, effectively designing a
compensation and benefits program involves both internal fairness and a consideration of the
external job market. This process begins with determining the value of a job to the organization through a job evaluation.
Goals of a Job Evaluation
The goals of a job evaluation are to
establish the pay for each job in the
company and to create a pay structure that is equitable. The job evaluation is used to take all the information
from a job analysis and put it into a
format that allows for comparison to
more easily determine how much to
pay each job. By following a set procedure for establishing pay—the job
evaluation—a company is able to create a pay structure that is fair, consistent, and unbiased. As we mentioned
Wavebreak Media/Thinkstock
in Chapter 1, the goals of a compenA successful job evaluation will help establish a
sation and benefits system are to
fair and unbiased pay structure that consistently
ensure internal and external consisrewards a company’s employees.
tency, attract high-quality talent, motivate and retain talent, and meet legal
requirements. A job evaluation helps achieve this by providing a systematic and equitable
mechanism for establishing pay for each job within a company.
Legal Considerations
As we discussed in the job analysis section and Chapter 2, there are many laws and regulations that must be taken into account when dealing with compensation and benefits issues.
With job evaluation there are two key laws that have an impact on how we develop job evaluation programs—Title VII of the Civil Rights Act and the Equal Pay Act.
Title VII of the Civil Rights Act
As we’ve previously discussed, Title VII of the Civil Rights Act protects against discrimination in employment based on race, color, religion, sex, and national origin. This protection
extends to pay, meaning a company can’t discriminate by paying someone less just because
of his or her race, color, religion, sex, or national origin. This means that when conducting a
job evaluation, care must be taken to avoid biases against these protected groups when setting salary bands.
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Section 4.2
Equal Pay Act
Again, as we’ve previously discussed, the Equal Pay Act stipulates that men and women who
are employed by the same company must receive the same pay if their jobs demand equal levels of skill, responsibility, and effort, and if their working conditions are the same. Often, men
and women hold different titles even within occupational groupings. This practice has often
led to women being paid less than men. The concept of comparable worth has been introduced as a way to remedy this. Comparable worth is the idea that promotes equal pay for
similar work. It takes the concept of “equal pay for equal work” a step further by basing pay
on similar types of work, which includes skill, responsibility, and effort. The idea behind comparable worth is to raise wages for traditionally female-dominated jobs to the level of those
for comparable male-dominated jobs in order to eliminate sex as a factor in setting wages.
Compensable Factors
A job analyst or supervisor may take two different approaches in determining whether one
job is of more value to the organization than another. The first method is intuitive and is generally based on experience, which may work for very small firms. The second method is used
widely and involves factors that jobs have in common. These factors are known as compensable factors, which are significant, measurable job characteristics by which companies
establish relative pay rates. Examples of compensable factors are the amount of effort needed
to perform a job or specific skill sets and how proficient a job incumbent may be in using such
skill sets. Many companies use skill, effort, responsibility, and working conditions as the compensable factors to assess for their compensation systems since these factors are derived
directly from the Equal Pay Act.
Numerous companies have packaged the concept of job evaluation and compensable factors into models to use in providing consulting services to companies wishing to outsource
their job evaluation needs. While the underlying theories and ideas are the same, each consulting firm puts its own spin on the concept. For example, the Hay Group, a global management consulting firm with over 12,000 organizations as clients, emphasizes just three
compensable factors in its model—know-how, problem-solving skills, and accountability
requirements (Hay, 2010). In its model, know-how is the amount and quality of technical/
specialized skills, managerial skills, and human relations skills possessed by and used by
the incumbent. Problem solving has to do with the thinking environment (job context and
problem definition and clarity) and the thinking challenge (types and difficulty level of problems). Accountability has three dimensions, including the freedom to act (how empowered
the worker is to take action and have an impact on decision making), scope (specific business measures used by a firm and the degree to which the job may positively impact the business), and impact (the influence of the job
on business results). The Hay Group model
evaluates jobs using a set of common facCritical Thinking
tors that measure inputs (required knowledge, skills, and capabilities), throughputs
Apply the concept of compensable
(processing of inputs to achieve results),
factors to your resume. What are your
and outputs (end result expectations).
significant qualities as viewed from a job
Each job’s content is analyzed relative to
evaluation standpoint?
each factor and represented by a numerical
value (Hay, 2005).
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Job Evaluation
Section 4.2
Whatever approach is used, the goal is to identify common elements of each job that allow
direct comparisons to other jobs.
Job Evaluation Techniques
To perform a job evaluation, the job evaluator takes a series of factors (effort, skill, responsibilities, problem solving, and working conditions) into account, weights these factors based
on importance or value to the company, and then places each job at a point on a continuum.
This continuum is then broken down into a series of groups that correspond to wage categories or salary bands. One of four methods (ranking, classification, factor comparison, and the
point system) is typically used to do this. Ideally, using more than one method is preferred as
it helps evaluate the jobs, especially diverse jobs, in a more comprehensive manner. In practice, however, it is often not practical to use two different methods to evaluate all jobs, so the
company will select the method that logistically makes the most sense for it to use.
Ranking
The ranking method is one of the simplest to administer. With this method, jobs are compared
to each other and rank-ordered based on the overall worth or value of the job to the organization. After the ranking, the jobs are then grouped to determine the appropriate salary levels.
The worth of a job is usually based on judgments of skill, effort (both physical and mental),
responsibility (supervisory and fiscal), and working conditions.
There are three ways of ranking jobs: (1) ordering, (2) paired comparison, and (3) weighting.
With ordering, you just put job titles in order of importance to the organization. With paired
comparison, each job is compared against all other jobs in the company. Weighting adds a
little bit more sophistication to the process by giving more importance (weighting) to some
factors over others. For example, mental effort may be judged to have more importance than
physical effort.
The advantages of the ranking method are that it is simple and very effective when there are
relatively few (fewer than 30) jobs to be evaluated. The disadvantages are that this method
is subjective and difficult to administer as the number of jobs increases. Additionally, since
there is no standard used for comparison, new jobs would have to be compared with the
existing jobs to determine the appropriate ranks. In essence, the ranking process would have
to be repeated each time a new job is added to the organization.
There are some tips that can be used to make this method a more manageable process. Since
it is usually not realistic to rank all jobs in any given organization, unless it is a particularly
small firm, you can instead rank jobs by department or, if small enough, by strategic business
unit (e.g., marketing). Instead of using all characteristics of a job, you can use a subset, such
as the top three compensable factors, to rank all the jobs in a company. You can split the jobs
among several individuals to rank and then come together as a committee to rank all the jobs
for the company.
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Section 4.2
Classification
The classification method is used if you already have a system in place. With the classification
method, you are fitting the jobs into an existing wage category structure or hierarchy. Raters
are asked to classify jobs into orderly groups called classes if they are similar jobs. Alternatively, the groups are referred to as grades if they contain jobs of similar difficulty level but
are otherwise different. For example, a fire chief and a press secretary in the federal government’s General Schedule (GS) rankings would be considered to be in the same grade level
(http://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule).
Each level in the grade/class structure has a description and associated job titles. Each job
is assigned to the grade/class providing the closest match to the job. The classification of a
position is decided by comparing the whole job with the appropriate job-grading standard.
To ensure equity in job grading and wage rates, a common set of job-grading standards and
instructions are used. Because of differences in duties, skills, knowledge, and other aspects of
trades and labor jobs, job-grading standards are developed mainly along occupational lines.
The standards do not attempt to describe every work assignment of each position in the occupation covered. Instead, the standards identify and describe those key characteristics of occupations that are significant for distinguishing different levels of work. They define these key
characteristics in such a way as to provide a basis for assigning the appropriate grade level to
all positions in the occupation to which the standards apply.
The advantages of the classification method are that it is simple and the grade/class structure
exists independent of the jobs and therefore, new jobs can be classified more easily than in
the ranking method. The disadvantages are that classification judgments are subjective and
some jobs may appear to fit within more than one grade/class. Additionally, the standard
used for comparison (the grade/class structure) can be biased by job titles, and this could
result in some jobs being unfairly impacted, such as female-dominated jobs being rated lower
than primarily male jobs.
Factor Comparison
With the factor-comparison method, a set of compensable factors is identified as determining
the worth of jobs (Benge, Burk, & Hay, 1941). Typically, the number of compensable factors is
small (four or five) and easily identified. For example, it may be decided to use the compensable factors of skill, responsibilities, effort, and working conditions to set the worth of the jobs
in the company. Next, benchmark jobs are identified. Benchmark jobs should be selected as
having certain characteristics: (1) equitable pay (not overpaid or underpaid) and (2) a range
of values across the compensable factors. For each factor, some jobs would be at the low end
of the scale while others would be at the high end of the scale. The jobs are then priced, and
the total pay for each job is split into pay for each factor (see Table 4.1).
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Section 4.2
Job Evaluation
Table 4.1: Sample factor comparison
The hourly rate is divided into pay for each of the following factors:
Job
Hourly
Rate
Pay for
Skill
Pay for Effort
Pay for
Responsibility
Pay for Working
Conditions
Admin Assistant
$11.00
5.50
2.50
2.50
0.50
Accountant
$21.75
9.50
5.25
5.50
1.50
Payroll Clerk
Manager
$15.50
$30.00
7.00
12.00
4.00
6.50
3.50
9.00
1.00
2.50
This process establishes the rate of pay for each factor for each benchmark job. Slight adjustments may need to be made to the matrix to ensure equitable dollar weighting of the factors.
The other jobs in the organization are then compared with the benchmark jobs, and rates of
pay for each factor are summed to determine the rates of pay for each of the other jobs.
The advantages of the factor-comparison method are that the value of the job is expressed
in monetary terms and the method can be applied to a wide range of jobs as well as newly
created jobs. The disadvantage is that the pay for each factor is based on judgments that are
subjective.
Point System
The point system is an extension of the factor-comparison method. With this technique, also
known as the point method, a set of compensable factors are identified as determining the
worth of jobs. Typically, the compensable factors include the major categories of skill, responsibilities, effort, and working conditions. These factors can then be further defined as follows:
• Skill
1. Experience
2. Education
3. Ability
• Responsibilities
1. Fiscal (money/equipment)
2. Supervisory
• Effort
1. Mental
2. Physical
• Working Conditions
1. Location
2. Hazards
3. Extremes in Environment
Each factor is then divided into levels or degrees that are assigned points. The points for each
factor are summed to form a total point score for the job. Jobs are then grouped by total point
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Considerations Due to Company Size
Section 4.3
scores and assigned to grades/classes so that similarly rated jobs would be placed in the same
wage categories or salary bands.
The main advantage of this method is that it expands the factors that are used to evaluate the
jobs to provide a more comprehensive view of the job. It also has the advantages of providing the value of the job expressed in monetary terms and of providing the ability to apply the
technique to a wide range of jobs as well as newly created jobs. As with any of the methods,
a disadvantage is that the pay is based on subjective judgment, although this technique does
give more concrete factors on which to evaluate the jobs.
HR-Software.net offers free point method job evaluation software at http://www.hr-software
.net/cgi/JobEvaluation.cgi. You can experiment with this software to get a feel for how the
point system works.
4.3 Considerations Due to Company Size
While the concepts of job analysis and job evaluation, which lay the foundation for a solid
compensation and benefits system, apply to any organization, there are some differences in
how the topics are approached due to the size of the organization.
A key difference is in the knowledge base regarding job analysis and job evaluation. A large
company can afford—both in terms of money and manpower—for its employees to specialize
in their jobs. Therefore, the different aspects of compensation and benefits can be handled
by small, select groups who focus on their specific areas and are well informed about those
areas. A small company, however, has to rely on just a few people—and often, just one person—to handle its human resource needs. Therefore, the HR professional has to be more of a
jack of all trades. As such, he or she would not be as knowledgeable about the issues involved
with job analysis and job evaluation. It also isn’t likely that management knows of the need
for a job analysis or job evaluation, or if management does know, then the decision is usually
made that it is not necessary to perform these because the company is too small for those
steps. Instead, small companies will often just put together ad hoc job descriptions and assign
salaries to those jobs without any standard process, even though the techniques discussed in
this chapter can be used effectively despite limited resources.
Another key difference between large companies and small companies in the handling of job
analysis and job evaluation is the amount of resources that can be devoted to the topics. Large
companies will have more money to devote to the process, either in the form of hiring internally to cover the work or by outsourcing the work to experts in the field. A small company,
on the other hand, is not going to have the resources to perform an extensive job analysis or
job evaluation. Its money is limited as well as the manpower available to devote to the work
involved.
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Considerations Due to Company Size
Section 4.3
Given the limited resources and small size, it
is understandable that a small company does
Critical Thinking
not go through the same process as a larger
company with more resources and employHow should you approach job analysis
ees. Small companies, however, still need to
and job evaluation differently in a
address the job analysis and job evaluation
small company as compared to a large
topics with a standard process. At a miniorganization?
mum, small companies can use O*NET as the
basis for setting the jobs within a company.
Because O*NET gives the average work done
based on job title—the average skills, average responsibilities, average salary, and so on—the company will need to tweak the O*NET
job to match its requirements. Using O*NET gives some standardization to the job process,
something small companies can benefit from.
Case Study
A Moat for Your Castle Inc.: Out of Control
At the end of Chapter 2, the fictional company A Moat for Your Castle Inc. was introduced.
As a reminder, this company is based in El Paso, Texas, and builds fences and pools. The
company grew from a startup and business is booming.
In fact, the business has grown so much that the owners are finding it necessary to diversify
the number and types of jobs in the organization. Before, the only distinction was between
office workers who handled the logistics of running the business and installers and others
who actually built the fences and pools. The residential pool business that previously
was a small part of the business has now grown to account for as much revenue as fence
construction, and employees have begun specializing in the different types of construction.
Back in the office, it has been necessary to hire a clerk to deal with compensation and
benefits administration, an accountant to keep up with finances, and buyers to deal with
sourcing and purchasing parts. This has all happened organically, with no attention paid
to job descriptions or structure. Recently, several longtime employees have left to work for
other organizations. The company has found it difficult to replace these employees, and
business has slowed as a result.
What are some possible reasons for why long-term employees are leaving the company? Do you
think the difficulty in hiring replacements is due to the same or different issues?
How could job analysis be used to help the company? How could job evaluation be useful for
this company? What impact would being a small company have on the job analysis and job
evaluation process?
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Summary & Resources
Summary & Resources
Summary
In this chapter, we discussed the two components that are the basis for a fair and equitable
compensation and benefits system—job analysis and job evaluation. We learned that job
analysis is examining what each job entails, while job evaluation is determining how much to
pay each job.
Internal consistency provides order to a firm’s compensation system and uses KSAOs (knowledge, skills, ability, and other characteristics) as the basis for setting up the hierarchy of a
compensation system. Compensable factors form the basis from which to evaluate jobs.
As we learned in Chapter 2, there are legal implications when dealing with compensation.
The specific laws dealing with the topics in this chapter are Title VII of the Civil Rights Act, the
Equal Pay Act, and the Americans with Disabilities Act, all of which prohibit discrimination.
Companies can either outsource their job analysis or perform it internally. Either way, there
are various techniques, such as interviews, observation, and surveys, that can be used to conduct a job analysis. Job evaluation can be done by the simple ranking method to the more
sophisticated point system method, with variations in between.
Finally, we ended the chapter by addressing the limitations that small companies have. Small
companies often lack the resources and time, as well as possibly the knowledge, to recognize
that these two elements—job analysis and job evaluation—are key components in a solid
compensation and benefits system. We provided some advice on how small firms can address
these limitations.
Key Terms
classes Groups of similar jobs.
comparable worth The notion that promotes equal pay for similar work.
compensable factors Significant, measurable job characteristics by which companies
establish relative pay rates.
competencies Measurable or observable
KSAOs and behaviors critical to successful
job performance.
grades Groups of jobs of similar difficulty
level but that are otherwise different jobs.
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internal consistency The relative value of
each job within a firm compared to every
other job.
job analysis The systematic process to
determine what a job entails, both in terms
of the content and duties of the job as well as
what is required from the worker to perform
the job.
job description A list of the duties, responsibilities, tasks, working conditions, and
other essential elements needed to complete
the job in a satisfactory manner as well as
the traits, skills, educational background,
and personality characteristics needed in
the worker.
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Summary & Resources
job evaluation A technique used to systematically recognize differences in the relative
worth among a set of jobs and to establish
pay differentials accordingly.
subject matter experts (SMEs) People
who are recognized as experts for their
knowledge in a particular area or topic.
Occupational Information Network
(O*NET) A government database that
documents details on the work involved, the
specific tools used, and the required specialized training for various jobs.
visionary job analysis A job analysis for a
job that does not currently exist.
KSAOs Stands for knowledge, skills, abilities, and other factors; is the basis for creating the hierarchy of jobs within a firm.
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task One complete activity with a beginning and an end that is performed by only
one person and results in an outcome that
contributes to a product or service.
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