Overview from Job Analysis to Compensation Decisions 1

Course Project: Overview from Job Analysis to

Compensation Decisions

Athena Giokaris

HRM 590

Prof. Carlos Jon

October 18, 2014

Overview from Job Analysis to Compensation Decisions 2

Table of Contents

Job Analysispage 3

Job Recruitment...page 5

Employee Selection.page 7

Performance Evaluation..page 8

Compensation Decisions...page 10

Literature Review: Compensation.page 12

Overview from Job Analysis to Compensation Decisions 3

Course Project: Overview from Job Analysis to

Compensation Decisions

Job Analysis

Being a part of the Human Resources department comes with creating and analyzing job

descriptions. It is important to be clear, concise, and informative when forming a job description

for applicants to apply to. The best way to start is by forming Task Statements, which then leads

to KSA (knowledge, skills, and ability) Statements. Task Statements describe, in a definable and

understandable way, the various duties assigned to the particular job at hand. It helps the HR

Manager clearly define certain task sentences using a verb, receiver of the verb, how the action is

performed, and why. Once those four categories are determined for a specific job task, a KSA

statement can be put together in order to determine which knowledge, skills, and abilities are

desirable. With all this information written out concisely, a proper job description can be created

and distributed for potential job candidates.

When forming the job description for an HR Receptionist, I included the written out Task

Statements in order to provide the candidate with all the essential job functions for the position.

This also helps the HR Management team know exactly what to expect from new hires once the

position is filled. This way, there can be no confusion as to what the HR Receptionist is

supposed to do on a daily basis. I then added the KSA Statements in order to describe the certain

skills necessary to perform the job well. A potential job candidate would need to be able to

understand what is expected of them, and the HR Manager can determine if that candidate would

be a good fit based on those qualities. This helps match the person to the job in a way that leaves

no room for misunderstandings.

Overview from Job Analysis to Compensation Decisions 4

Also included are the required education and experience levels. When a certain level of

education/experience is determined, it can help weed out those applicants who have neither. It all

depends on the type of job being described, as well as the level of training a company is willing

to commit to for new employees. Conditions and physical requirements need to be stated, if there

are any, in order to gain applicants that are physically capable to perform the tasks necessary. A

brief description of the workplace environment can be included in order to provide the applicant

with how it is to work in the office. Any equipment or computer applications, such as Microsoft

Word, that the new hire would be handling would need to be stated so that it can help determine

the candidates level of experience.

For the HR Receptionist position, there were certain tasks necessary for applicants to have

skills for in order to know exactly how to perform the job successfully. These included

maintaining personnel files, answering phone calls, monitoring staff/payroll items, handling the

HR Directors calendar, handling office mail, typing important documents, following company

policy when dispersing information, assisting the public/employees with personnel questions,

reviewing/processing forms of personnel changes, and performing other administrative functions

for office personnel. Each task was outlined with how to perform them, and why they need to be

performed. The KSA Statements outlined which skills were needed to perform each task well.

For example, for maintaining personnel files, the job applicant needed to have the knowledge of

identifying/filing documents, the skill of filing chronologically/alphabetically, and the ability to

file efficiently and accurately.

There is nothing that I would change about the job analysis I completed for the HR

Receptionist position. The Task Statements were specific and measureable, the KSA Statements

were clear and identifiable, and the job description contained all the important components and
Overview from Job Analysis to Compensation Decisions 5

was outlined well for the applicant. Once the job description is clearly written and complete, the

recruiting and selection process can begin.

Job Recruitment

The first step in this process is to create a job advertisement. There needs to be a brief

description of what type of job the advertisement is for in order to reel in the potential candidates

who are looking for a specific job. It also needs to list all the essential job duties that the

receptionist will have to perform. Clearly stated duties and responsibilities can help applicants

know exactly what they are getting into before submitting their applications, as well as help the

company know exactly what to expect from new employees. Another important aspect is to

include the education and experience section in order to summarize the important aspects of an

employee desirable for this particular position. The job advertisement needs to be clear and to the

point, as well as organized and readable for the applicant. How it is structured and what

information is provided can help deter unfit candidates from submitting their application and

flooding our application inflow.

For the HR Receptionist position, I included a little information on the company itself so

that applicants can decide if the mission statement is something they can follow before

submitting their application. I also included the time aspects of the job (full-time, salary, etc.) to

deter those applicants looking for part-time work or hourly-based pay from applying and

therefore limiting the pool of potential employees. In order to get a brief overview of a persons

personality, I decided to request a cover letter in order to view the applicants own words about

themselves and how well they do with basic writing aspects. Since typing is part of the job

description, a cover letter would help determine the writing level of the applicant as well.
Overview from Job Analysis to Compensation Decisions 6

Now that the advertisement is completed, the company or HR Management team needs to

determine how they will receive applications and where they will advertise. With the use of

computers, it can significantly help with this process. I had originally suggested using an email

system for receiving resumes can help drastically with the volume of applications received.

There is software nowadays specifically for applications through email, such as Peoplesoft,

Recruiterbox, etc. These programs can help the process by filtering out certain emails and auto-

searching through resumes for key words. However, utilizing the email software can be costly

with implementing and training in how to work the program. It is better to ask candidates to

submit their applications through the company website in order to manage the application flow

and database more efficiently and with less cost.

In order to ensure a wide range of applicants, the company needs to use the appropriate job

search avenues. I had originally chosen only a few of the top job-recruitment websites: TLNT for

its HR-specificity, Careerbuilder for its popularity, and Simply Hired for its additional job

aspects. This was all based on a Forbes article listing the most influential job sites for 2014.

However, in order to expand on areas of recruitment to maximize the number of applicants that

fit this job description, I would add the use of local college career centers, employee referrals,

internal job posting and local papers. The e-recruitment method has gained popularity and is

more orderly in its design, requires less coordination, and is more efficient for the company

when hiring external candidates. On top of this, a time limit needs to be determined for how long

to effectively advertise. Continuous advertising until the position is filled will help elicit the right

person for the job instead of going with what is available at the time in order to meet a deadline.
Overview from Job Analysis to Compensation Decisions 7

Employee Selection

There are many different methods to use for employee selection, such as observations,

interviews, questionnaires, or SME consultations to name a few. Each method has its own

advantages and disadvantages, no method is perfect. For the HR Receptionist position, I decided

to use the interview method, where a trained interviewer asks questions for clarity, and an

applicant can provide samples of their work for a more accurate analysis. In order to select the

appropriate employee once applications are chosen, interviews are the best tool to gather

information and evaluate qualifications on potential candidates. This method can be time

consuming depending on the number of interviewees available. However, I feel it is the

appropriate method to use for filling the HR Receptionist position.

There are different types of interview methods, but I have decided on the unstructured

interview process in order to find the near-perfect candidate for this position, which will be in

question and answer format. The interviewer will be in charge of final selection, so they will

need to be properly trained in order to perform their own job successfully. There would be an

interview guide to make sure certain points are addressed, as well as the organization itself

would determine exactly which selection criteria is prioritized and how that criteria will be

assessed. Once a candidate is chosen, the effectiveness of the interview would need to be

monitored by collecting data on job performance, job satisfaction, and retention of the individual

after a period of time in order to improve the process if needed. They would also be given a short

typing test pre-interview in order to establish the candidates words-per-minute.

The unstructured interview should focus on prior receptionist experience, customer

service personality, and proper knowledge/skills to handle the essential duties previously

outlined. For instance, the candidate would be asked to elaborate on any related prior
Overview from Job Analysis to Compensation Decisions 8

experiences, such as their prior responsibilities, the amount of people they dealt with on a daily

basis, and what type of company protocols they had to follow. In order to get a feel for the

candidates personality, they would be asked certain questions, such as if they enjoy interacting

with people. Inter-office morality scenarios, such as what they would do if they caught a co-

worker stealing, can help determine the applicants level of trust and ethics. To evaluate

qualifications, going down the list of essential duties previously listed and asking if they feel

confident to handle each one, as well as asking if they have questions that need clarifying, will

provide a decent look into the candidates level of understandability and confidence. And finally,

for validity purposes, they should be asked to clarify their education and work experiences listed

on their resume. In this day and age, many people fabricate certain aspects of their resume in

order to guarantee themselves a position that they are not necessarily qualified for. The interview

process should assist the interviewer in determining whether or not the candidates should be

chosen for the job.

In order to finalize the recruitment process, the company should ask the candidate for any

references of prior work experiences, as well as administer background checks to make sure the

office stays a safe working environment. Once a candidate meets all requirements, provides

credible references, and passes the background check, they can begin working and doing their

tasks. They should be monitored for the work performance to ensure the correct individual was

chosen, and this is where conducting annual performance reviews comes into play.

Performance Evaluation

The performance evaluation is important in employee development, and needs to be a

structured, accurate, and fair outline of the individuals current performance rating. This provides
Overview from Job Analysis to Compensation Decisions 9

the company with information on how well the employee is working towards the company goals,

and gives a chance for that employee to set goals for professional development. It can also

identify problem areas with the employee so that proper exercises and training can help improve

their overall ratings. It benefits both sides of the coin, the company itself and the individual

employee.

Evaluations are generally mapped out on a form that is filled out by a supervisor,

manager, etc. It lists the key tasks assigned to the employee, with the company goal and the

actual individual results listed in comparison. Any comments regarding each result needs to be

written in order to provide the employee with specific guidelines for improvements in that

section. Therefore, any specific objectives for that improvement, like additional training or

continued monitoring, also need to be made clear so the employee understands exactly where

they fall short and how they can improve. With annual reviews, improvements need to be

acknowledged and preferably rewarded so the employee can gain a sense of accomplishment that

can be a motivator for continued and future progress.

Using a rating scale, in this case from 1-5, will help the manager going the evaluation

with how they rank next to company goals and other employees. It simplifies the evaluation

process and assists in the compensation stage. Cathy, the HR Receptionist newly hired, showed

in her performance evaluation that she has done well in certain areas, but has fallen short in

others. Being able to identify exactly which tasks needs improvement can help determine the

correct plan of action to get those performance numbers back up for the next review period.

After filling out the form accurately and fairly, a development plan was created by identifying

and listing the strengths and weaknesses of the employee based on the review. Doing this

allowed for issuing development goals to improve on the employees weaknesses. For Cathy, her
 Overview from Job Analysis to Compensation Decisions
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strengths were typing, mailing job flyers, logging checks, and job hotline duties. Her

weaknesses, however, outweighed her strengths. She needed to improve in filing, answering

phones, providing information, inputting applications, distributing mail, accuracy of recruitment

folders, and filling out personnel forms. Knowing all this, I was able to form a long-term goal of

focusing on overall accuracy improvements with filing, mailing, and data input, as well as short-

term goals of providing a clear understanding to customers, proper phone etiquette, and meeting

deadlines. Once the goals are set, a new assignment can be given to start the improvement

process. I suggested additional training by shadowing another receptionist, demonstrating proper

techniques for each task, having her reenact demonstrations, role-playing for customer service,

and informing of the importance of meeting deadlines and overall accuracy. Hopefully, with this

detailed feedback, Cathy can continue to learn how to do her job well and improver her overall

performance for the next year.

Compensation Decisions

Employee compensation refers to the payment in return for their services to the company,

i.e. performing their job. This can take on the form of a wages, benefits packages, bonuses, tips,

salaries. There are two types of pay, base pay and variable pay. Base pay is a fixed amount that is

based on the job role and the market for expertise within that role. Variable pay is more based on

the individuals job performance, and includes things like bonuses. The companies themselves

usually determine a pay range for each level of employee, and typically it is encouraged to stay

within that limitation. Part of the HR departments job is to figure out how to compensate the

companys employees. They have to take certain aspects into account in order to remain within

the pay range and distribute the budget fairly and accurately.
 Overview from Job Analysis to Compensation Decisions
11

The factors used to determine each employees salary increase for this project were the

amount of years service, their annual performance reviews, their current skill levels, and any

future predictions of retention. Each aspect is important in deciding how to divvy out the

company budget for salaries. For instance, two of the employees were talking about retiring, so

their annual performances and skill levels played a major factor in deciding on whether it would

be worth it to the company to retain them for future years. Other employees seemed more

motivated than others in performing their job well, so their potential for future improvements

through training was considered important. In the case of Cathy, the new HR Receptionist, I felt

that she had many aspects needing improvement. This sent up a red flag for me regarding the

effectiveness of the training program she had gone through when she started. Because of this, I

suggested that the company re-evaluate the current training programs in order to better provide

new hires with the proper skill sets they need from the beginning.

Providing continued training education to those employees that were considered for

higher raises but fell short of the proper skill sets needed would help those individuals advance

professionally in the future. This could also increase their time spent working for the company

and would higher retention rates since more job opportunities would be available. When it came

to issuing the salary increases to each employee, all their individual attributes were considered in

the decision process. Those that presented with the highest values to the company were given the

higher raises in order to keep them working for the company. In other words, they were

considered too valuable to lose. Others were given lower salaries when higher risks were

perceived for retaining them. These decision processes vary through different companies because

it depends on what the company is looking for in their own employees.

 Overview from Job Analysis to Compensation Decisions
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The bonuses were distributed solely based on appraisal rating from job performances,

which was the decision on made in order to issue these bonuses as incentives for continued

improvements. Employees are more likely to work hard and perform their best every year in

order to receive the maximum bonus amount available. Everyone received a bonus because it

boosts employee drive and morale to know that they are appreciated for their dedication and hard

work when working for our company. I would not change any of my decisions, because I believe

it struck a good balance between the companys interests and the employees.

Literature Review: Compensation

Ho, J. L. Y., Lee, L. & Wu, A. (2009). How Changes in Compensation Plans Affect Employee

Performance, Recruitment, and Retention: An Empirical Study of a Car Dealership.

Contemporary Accounting Research, 26 (1). Retrieved from

http://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?vid=4&sid=2d0c2b06-5e43-4e05-9274-

75631d7d6ac6%40sessionmgr112&hid=117

This article focuses on the effect of less performance-sensitive incentives have on

employee productivity and compensation. The current adopted theory is that

compensation based on employee performance increases the employees incentive to

work harder, which then increases improvements in overall performance. For example,

Sears had decided on a commission-based compensation program instead of

performance-based, and it ended up costing them money because employees were falsely

diagnosing brake and alignment problems in order to up their commission. The article

also mentions how recruitment and retention can also be affected by compensation

decisions. Performance-based compensation programs can be more attract better

 Overview from Job Analysis to Compensation Decisions
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performers and retain them, and can help differentiate between the good performers over

the lower-performing employees. It was found that although going with a less

performance-sensitive plan lowered individual productivity, it had no negative effect on

the companys overall performance.

Larkin, I., Pierce, L. & Gino F. (2012). The Psychological Costs of Pay-For-Performance:

Implications for the Strategic Compensation of Employees. Strategic Management Journal, 33.

Retrieved from

http://eds.b.ebscohost.com.proxy.devry.edu/eds/pdfviewer/pdfviewer?vid=2&sid=2d0c2b06-

5e43-4e05-9274-75631d7d6ac6@sessionmgr112&hid=117

Larkin, et al. focused on the psychological factors that increase costs from performance-

based compensation, instead of the more popular agency theory of analyzing

compensation. Strategic compensation motivates and attracts the employee being

compensated, but it has an impact on peer workers and the firms complementary

activities. Most research on this subject consists of taking on the agency theory for

analysis and focuses on executive compensation instead of non-boardroom employees.

The authors highlight two main factors that impact compensation strategy: (1) social

comparison processes, and (2) overconfidence. It suggested reducing social comparison

processes through intermediate forms of compensation, while to reducing overconfidence

costs by flattening compensation. These psychological costs need to be accounted for in

order to not receive lower effort, lower ability, and sabotage from their workers.

MacKenzie Jr., W. I., Klaas, B. S. & McClendon, J. A. (2012). Information Use in Counter-Offer

Decisions: An Examination of Factors that Influence Counter-Offer Decisions. Springer Science

& Business Media, LLC, 33. Retrieved from

 Overview from Job Analysis to Compensation Decisions
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http://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?vid=10&sid=2d0c2b06-5e43-4e05-9274-

75631d7d6ac6%40sessionmgr112&hid=117

This article deals with how outside employment offers influence assessments of

employee value. It is almost a supply-and-demand approach to compensation decisions.

These decisions have been typically based on structured mechanisms, such as

performance evaluations. However, there is a greater need for responsiveness to the

current labor/product market. Because of this, companies are allowing more unstructured

processes to be an assessment of employee value and compensation decisions. Basically,

managers are forced to evaluate whether the employees past and expected contributions

justifies a substantial counter-offer to those workers who have received a greater outside

offer (MacKenzie, Klass, & McClendon, 2012). Nowadays, there are more bidding wars

for highly skilled workers in the labor market. This can become dangerous in that the

compensation cost can spiral out of control. It is an important challenge that affects

managerial and compensation decisions when another organization attempts to lure away

the valuable employees of your own company.

Weber, C. L. & Rynes, S. L. (1991). Effects of Compensation Strategy on Job Pay Decisions.

Academy of Management Journal, 34 (1). Retrieved from

http://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?vid=11&sid=2d0c2b06-5e43-4e05-9274-

75631d7d6ac6%40sessionmgr112&hid=117

Weber, et al. attempts to explain the occurrence of wide pay variations for employees

working the same job, regardless of current labor market. Different pay strategies affect

pay levels and influence the value of market survey versus job evaluation information.

There has been countless research on recognizing the existence of varying pay for the
 Overview from Job Analysis to Compensation Decisions
15

same job, but there is very little that explains the why. The authors stress the importance

of understanding how compensation managers make their decisions and how to

incorporate knowledge of the process to future studies of individual earnings. Currently,

compensation managers tend to focus on three key aspects: (1) current company pay

structure, (2) market survey information, and (3) job evaluation results. The combination

of these three aspects is what influences employee compensation decisions, as well as the

emphasis on which of the three aspects should weigh more heavily on the final decision.

The results vary depending on the individual in charge of administering the decision and

the type of company the decision is for. In conclusion, compensation managers have for

the most part been persistent with the use of job evaluation systems to determine job and

individual pay, a practice that has remained unchanged since World War II. However,

with the vast changes taking place in the labor and product market conditions, this

method can prove to be less substantial on its own in the future.