Chapter Six
Other Job Evaluation Types,
Person-Focused Pay
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Other Job Evaluation Types
Classification
Ranking
Market Pricing
Competency-Based
© Prentice-Hall, Inc., 1998
Ranking








Whole job technique
Rank jobs high to low
Easy, inexpensive, informal
Effective when: few, similar jobs
Popular with small companies
Subjective, non-specific
May be hard to defend
Simple, Alternative, Paired
Comparison
© Prentice-Hall, Inc., 1998
Paired Comparison Ranking



Compare each job against
every other job
Give a “win” (X) if the
job is more valuable
Rank according to
frequency of “wins”
Results:
Shift Supervisor
Control Rm Opr
Equipm’t Opr
Laborer
Control LaborerS hift
Control Room Opr
X
Laborer
Shift Supervisor
X
X
Equipment Opr
X
3
2
1
0
Equipment
TOTAL
X
2
0
X
3
1
© Prentice-Hall, Inc., 1998
Classification







Whole job technique
Slot jobs into labeled classes
Classify jobs by similarity to prototypical/benchmark job,
label, and compensable factor
Common in public sector
Federal gvt: Factor Evaluation system
GS classification system: 18 classes
Used for wide variety of dissimilar jobs
Inexpensive, simple, flexible
Difficult to build classes, generic
classes, vague descriptions
© Prentice-Hall, Inc., 1998
Job Classification Schedule

GS 9 Includes all classes of positions the duties of which are
(1) to perform, under general supervision, very difficult and
responsible work along special technical supervisory, or
administrative experience which has (A) demonstrated
capacity for sound independent work, (B) thorough and
fundamental knowledge of a special and complex subject
matter, or of the professional, art, or science involved, and (C)
considerable latitude for the exercise of independent
judgment; (2) with considerable latitude for the exercise of
independent judgment, to perform moderately difficult work
requiring (A)...College degree... (B)...additional
training or experience...; or (3) to perform other work
of equal importance, difficulty, and responsibility,
and requiring comparable qualifications.
© Prentice-Hall, Inc., 1998
Market Pricing




Determines market rate for each job
Pays market rate
Ignores internal consistency in favor of
external competitiveness
Rates may be unrelated to relative
value of skills, responsibility, value
within the firm
© Prentice-Hall, Inc., 1998
Competency-Based Pay

One of fastest-growing personnel innovations in
U.S.
 Mostly in service and manufacturing industries

Rewards employees for acquiring job-related
competencies, knowledge, skills
 rather than demonstrating successful job performance.

Includes pay-for-knowledge and skill-based pay
 Pay-for-knowledge rewards managerial, service, or
professional workers for successfully learning specific
curricula.
 Skill-based pay rewards employees who do physical
work for mastering new skills
© Prentice-Hall, Inc., 1998
Competency-Based Pay




Pay based on knowledge or skill,
not the job performed
Employee carries the wage,
regardless of the tasks performed
Pay increases are linked to
knowledge/skills, not promotions
Assess and values skills, not jobs
© Prentice-Hall, Inc., 1998
Pay for Knowledge Skill Blocks

Horizontal skills
 Similar skills/knowledge, e.g. several types of
record-keeping tasks.

Vertical skills
 Supervisory skills, e.g., scheduling, training,
coordinating.

Depth of skills
 Level of specialization or expertise: specialize in
particular aspect of job.
© Prentice-Hall, Inc., 1998
Varieties of Pay-for-Knowledge
Programs

Stair-step model
» Steps represent jobs from a particular job family that differ in
complexity
» Focus on skill/knowledge depth

Skill blocks model
» Jobs in same job family, employees progress to increasingly complex
jobs, but skills do not build on each other.
» Focus on horizontal and vertical skills

Job-point accrual model
» Focus on skills/knowledge that bear directly om companies attainment
of co petitive advantage

Cross-departmental models
» Focus on staffing flexibility. Traian one departmewnt with critical slills
ned to perform in other departments.
© Prentice-Hall, Inc., 1998
KBP--Increased Knowledge
Systems:
$7.00
Base Rate
$7.35
$7.70
$8.05
Level 2
Rate
Level 3
Rate
Level 4
Rate
1Job Function 1 Job Function 1 Job Function 1 Job Function
+1 know. cell +2 know. cells +3 know. cells +know. cells
Safety/
Housekeeping
Safety/
Housekeeping
Preventive
Maintenance
Safety/
Housekeeping
Preventive
Maintenance
Product
Knowledge
Safety/
Housekeeping
Preventive
Maintenance
Product
Knowledge
SPC
© Prentice-Hall, Inc., 1998
KBP--Multi-Skill System
$7.00
$7.35
$7.70
$8.05
Base Rate
Level 2
Rate
Level 3
Rate
Level 4
Rate
Mastery of 1
job
Mastery of 2
jobs
Mastery of 3
jobs
Mastery of 4
jobs
Filter
Assembly
Filter
Assembly
Material
Handling
Filter
Assembly
Material
Handling
Final assembly
Filter
Assembly
Material
handling
Final assembly
Polish/QC
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Borg Warner Auto Assembly
Classifications
CURRENT
measurer
nChain checker
nUltrasonic tester
nInspect/repair
nChain cleaner/oiler
nChain Packer
FUTURE
nChain
nCell
Operator C
nCell
Operator B
nCell
Operator
A Inc., 1998
© Prentice-Hall,
nRiveter
nAssembler
hand machine
nAuto assembler
Exhibit 6-4
Skill-Based and Job-Based Pay: A Comparison
FEATURE
SKILL-BASED
JOB-BASED
Pay level
determination
Base pay
Market bases for skill
valuation
Awarded on how much as
employee knows or on
skill level
Awarded on an employee’s
gain in knowledge or
skills
Awarded on an employee’s
skills base and
proficiency on past work
Job variety and
enrichment
Market bases for job
valuation
Awarded on the value of
compensable factors
Base pay
increases
Job promotion
Key advantage
to employees
Key advantage
to employers
Work scheduling flexibility
Awarded on attaining a
job-defined goal or
seniority
Awarded on exceeding
job performance
standards
Perform work and
receive pay for a
defined job
Easy pay system
administration
© Prentice-Hall, Inc., 1998
Exhibit 6-3
Skill-Level-Performance Matrix
SKILL LEVEL1
HOURLY PAY FOR PERFORMANCE RATING
BELOW AVERAGE
AVERAGE
ABOVE AVERAGE
Clerk I
Clerk II
$5.25
$5.50
$5.75
$6.00
$6.25
$6.75
Clerk III
Clerk IV
Clerk V
$5.70
$5.95
$6.20
$6.30
$6.60
$6.85
$7.25
$7.45
$8.25
1Skill
defined according to a skill blocks model (as in Exhibit 6-2).
© Prentice-Hall, Inc., 1998
Advantages

Advantages to Employers
 Employees see compensation as a reward rather than
an entitlement
 Competitiveness
 Technological innovation—skills become obsolete
 Increased global competition—more productive requires
leading-edge skills
 Improved job performance, reduced staffing, greater
flexibility

Advantages to Employees
 Increased job enrichment: skill variety, task identity,
autonomy, feedback.
 Increased job security
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