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HRM 20012

Pay and Performance


Lecture 11

Job Evaluation

Outline
Purpose and features of job evaluation
Methods of job evaluation
Implementation
Potential problems and critique
Summary so why do it?

What is job evaluation?


Job evaluation is a method of determining on a
systematic basis the relative importance of a number
of different jobs to provide a hierarchy of jobs that
is free from discrimination and felt to be fair by your
employees .
(ACAS 2010)
Job evaluation is a procedure for assessing the
relative demands of jobs with a view to allocating jobs
to positions within a pay structure.
(Heery and Noon 2001)
Purpose: equal pay (legal compliance?)

Grading Structures
Used as a basis for determining basic rate of
pay for each job
Trends towards performance-related pay in
recent years (see previous lecture)
Traditional approach of developing a
salary/pay structure of groups/job families
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Typical Salary Groups

(Source: Torrington et al., 2005: 614)

Therefore job evaluation aims to


Establish the relative value or size of jobs, i.e. internal relativities
based on fair, sound and consistent judgement
Produce information required to design and maintain equitable and
defensible grade and pay structures
Provide a basis for grading jobs within a grade structure, thus
enabling consistent decisions to be made about job grading
Enable sound market comparison with jobs or roles of equivalent
complexity and size
Ensure that the organisation meets ethical and legal equal-pay-forwork-of-equal-value obligations
Source: Armstrong and Murlis, 2004: 114

Why carry out job evaluation?


Lack of rationale for current grades
Organisational change
Too many job rates
Issues over equal pay and equal value
Problems with recruitment and retention
Employee dissatisfaction
Source: ACAS, 2008

Source: ACAS, 2008: 4

Methods of Job Evaluation


Non-analytical methods: e.g.
Job ranking
Paired comparisons
Job classification

Analytical methods: e.g.


Factor comparison
Points-factor rating
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Factor Comparison Matrix (e.g.)


Job

Total
Hourly
pay

Skill

Physic
al
Effort

Mental
Effort

Responsibility

Working
Conditions

8.75 2.50

1.50 2.00 2.25

0.50

9.25 3.00

0.50 2.50 2.75

0.50

9.75 3.00

2.75 1.50 1.75

0.75

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Point-Factor Rating
Analytical method of job evaluation
Based on breaking down jobs into factors of key elements
Methodology used:
1.
2.
3.
4.
5.
6.
7.

Factor selection
Factor plan design (skill, effort, responsibility etc.)
Job or role analysis
Evaluating jobs
Grading jobs
Reviews
Appeals
Source: Armstrong and Murlis, 2004: 116-119
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Points Ranking: Scattergraph

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Key points to note


Job evaluation is concerned with the job and not the
performance of the job-holder
Job evaluation does not eliminate collective bargaining
Only a structure of pay rates is produced; other elements of
earnings e.g. incentives are not covered
Concerned with internal relativities. Job evaluation,
therefore, can only assess the relative size of jobs in that
organisation
The technique is systematic rather than scientific, depends
on judgement; results are not infallible

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Critiques of job evaluation


Bureaucratic, paper intensive, time-consuming and
inflexible
Reinforces the rigid hierarchy
Prevent flexible pay progress

Inconsistent with work being carried out: pay


should be linked with people rather than the job
The issue of equal pay, equal value: it is not
scientific and objective because it involves
managerial decision-making that is based on
subjective processes it may be systematic but
that does not render it scientific!

Summary: JE is expensive and timeconsuming so why do it?


UK: 25% employers have adopted job-evaluated pay
structure (WERS 2004)
Popular in larger firms and the public sector
Reasons:
To satisfy workforce demands for fairness
To legitimise changes in pay structures
To assist management in changing the division of labour
To assist management in intensifying labour
Linked to Taylorism: deskilling & downgrading labour.
Compliance (equal pay)

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