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Definition of Reward Management
Definition of Reward Management
Definition of Reward Management
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
Job evaluation is a systematic comparison done in order to determine the worth of one job
relative to another.
Is a systematic of comparing different jobs to provide a basis for a grading and pay structure?
It establish the size (how big is the job) and value (the contribution a person has made) of jobs in
organization.there for ,job evaluation is a proces of determining the worthj of each job to be
performed,ranking and grading each job with respective requirement of
skill,knowledge,responsibility..etc; for fixing wage or reward pable to the job holder.
The basic principle is: jobs that require greater qualifications, more responsibilities and more
complex job duties should be paid more highly than jobs with lesser requirements.the basis
procedure is to compare the jobs in relation to another – for example,in terms of required effort
,responsibility and skills,suppose you know(based on your salary servey) how to price key
benchmark jobs,and then use job evaluation to determine the relative worth of all the other jobs
in your firm relative to these key jobs.you are then well on your way to being able to price all the
jobs in your organization.
Job evaluation is a practical technique, designed to enable trained and experienced staff to judge
the size of one job relative to others. It does not directly determine pay levels, but will establish
the basis for an internal ranking of jobs.
The two most common methods of job evaluation that have been used are first, whole job
ranking, where jobs are taken as a whole and ranked against each other. The second method is
one of awarding points for various aspects of the job. In the points system various aspects or
parts of the job such as education and experience required to perform the job are assessed and a
points value awarded - the higher the educational requirements of the job the higher the points
scored. The most well known points scheme was introduced by Hay management consultants in
1951. This scheme evaluates job responsibilities in the light of three major factors - know how,
problem solving and accountability.
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
Job Evaluation is concerned with measuring the demands the job places on its holder. Most factors that
contribute to this job pressure, e.g. physical strength required, knowledge of mathematics required, are
assessed and the result is a numerical estimate of the total job pressure. When evaluations are carried
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
out on all hourly paid personnel the technique’s uses include establishing relative wage rates for
different tasks. It is possible to use it for all grades of personnel, even senior management.
The Time Span of Discretion is an interesting and unusual method of job evaluation developed by Elliot
Jaques for the Glacier Metal Company. In this method the job pressure is assessed according to the
length of time over which managers decisions commit the company. A machine operative, for example,
is at any moment committing the company only for the period needed to make one product unit or
component. The manager who buys the machine is committing the company for ten years.
This method can be very misleading if is used alone.this method tries to understand the
importance of a particular job to that particular industry and rank them accordingly.the highly
important ones are placed high in the organization chart.the characteristics of this method:
Eg: food industry- the most importyant aspect is the quality assuarance
Hardware industry- the most important aspect is the strength of the steel
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
Ranking Method
The simplest and administratively the easiest techniques.the evaluater compares the job with
other jobs based on duties,respnosibilities and denads made by the jobs on the job incumbment
and the degree of important of the job to the organization and rank all the jobs form the most
important to the least important.the evaluater has to appraise and rank tha jobs but not the
incumbments.
Merits-
a. This method is very simple ,quick and cheaper in terms of terms of time and money.
b. This method is very suitable for small units.
c. It is also usefull for evaluating top executives in big organization
d. It is powerfull instruments for the job evaluation.
Example- assistant accountant,senior accountant and chief accountant are the jobs in the
occupation (grade) of accountant.the group are called classes if they contain similar jobs.
Under this method,jobs at different levels in the organizational hierachy are divided in to various
grades,with a clear-cut definition of each grade.grades are formulated on the basis of nature of
tasks,requirements of skills,knowledge, and responsibilities and authority of variopus jobs.there
are several steps in the mechanism of this method.
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
1. Skill
1. Experience
2. Education
3. Ability
2. Responsibilities
1. Fiscal
2. Supervisory
3. Effort
1. Mental
2. Physical
4. Working Conditions
1. Location
2. Hazards
3. Extremes in Environment
Each factor is then divided into levels or degrees which are then assigned points. Each job is
rated using the job evaluation instrument. The points for each factor are summed to form a total
point score for the job.
Jobs are then grouped by total point score and assigned to wage/salary grades so that similarly
rated jobs would be placed in the same wage/salary grade.
Advantages
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
Disadvanteges
The pay for each factor is based on judgments that are subjective.
The standard used for determining the pay for each factor may have built-in biases that
would affect certain groups of employees (females or minorities).
A set of compensable factors are identified as determining the worth of jobs. Typically the
number of compensable factors is small (4 or 5). Examples of compensable factors are:
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain
characteristics.
the jobs are then priced and the total pay for each job is divided into pay for each factor. See
example matrix below:
The hourly rate is divided into pay for each of the following factors:
Hourly Pay for Pay for Pay for Pay for Working
.
Job Rate Skill Effort Responsibility Conditions
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This process establishes the rate of pay for each factor for each benchmark job. Slight
adjustments may need o 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.
Advantages
Disadvantages
The pay for each factor is based on judgements that are subjective.
The standard used for determining the pay for each factor may have build in biases that
would affect certain groups of employees (females or minorities).
Ranking Method
Ranking This method is one of the simplest to administer. Jobs are compared to each
other based on the overall worth of the job to the organization. The 'worth' of a job is usually
based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal),
and working conditions.
Advantages
Simple.
Very effective when there are relatively few jobs to be evaluated (less than 30).
Disadvantages
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
Classification Method
Classification Jobs are classified into an existing grade/category structure or hierarchy. Each
level in the grade/category structure has a description and associated job titles. Each job is
assigned to the grade/category 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 and 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. The standards identify and describe those key characteristics of occupations
which 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.
Advantages
Simple.
The grade/category structure exists independent of the jobs. Therefore, new jobs can be
classified more easily than the Ranking Method.
Disadvantages
Employers do not enjoy high turnover rates, unproductive employees or other issues that
weaken the company. A job evaluation can help an employer avoid these issues--if the
evaluation is used effectively. Although a job evaluation does not determine pay--at least not
directly--it establishes a basis for internal job rankings.
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The Job Evaluation module of CompXpert can help you ensure that your job classification
system supports company equity goals. It enables you to produce a totally transparent, legally
defensible system in compliance with any regulatory or statutory job classification requirement.
CompXpert easily adapts to any organizational structure and can manage multiple pay structures.
With CompXpert from NPKtools, you are not tied to any particular methodology. Out of the box,
CompXpert supports any point/factor job evaluation method. Essentially, any evaluation
methodology that can be implemented with a spreadsheet can be implemented with
CompXpert.
For those accustomed to working with Excel, CompXpert will feel very comfortable. All the
analytical tools you are accustomed to are there at your fingertips: Filter, sort, lookup, and the
rest. What’s missing is the “oops” factor that ever-present danger when working with
spreadsheets that you could lose your work or worse, your data.
In CompXpert, your company data is stored in an industrial strength database. Multiple users can
be using data at the same time. Get info from people who know the jobs best. Control access by
dept or function. Compare evals across business units or any organizational function to ensure
hierarchy and consistency. This might be an analyst preparing a survey submission, an HR
manager creating a custom report, and a line manager contributing factor ratings. All access is
governed by highly granular, rules-based security that you control.
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
The job evaluation process established the relative value of jobs throughout the university. There
are two steps involved in this process:
1. Job Analysis and Job Description - Using a "job profile," the content of each job is
analyzed to identify key duties, responsibilities, and qualification necessary to perform
the job. Written job descriptions are then prepared to contain this information.
2. Job Evaluation - A computer assisted job evaluation plan, measuring 17 dimensions of
nonexempt work and 28 dimensions of exempt work, is used to evaluate the relative
worth of staff positions. This evaluation process focuses on valuing the content of each
position in terms of a series of well defined compensable factors.
The factors for clerical, service, technical, and administrative support positions include:
a. Knowledge: Minimum required level of specialized training, education, and
previous related work experience.
b. Skill: The manual and physical skills required to perform the duties of the
position.
c. Work Complexity: The degree and amount of judgment, initiative and ingenuity
involved in accomplishing work.
d. Contact with Others: The extent to which the work entails dealing with others in
the course of one's regular duties, including the frequency and nature of contacts
and the likely results of such contacts.
e. Property Protection and Use: The extent to which the position has responsibility
for university property, including funds, vehicles and confidential information.
f. Work Leadership: The responsibility for directing, instructing and training
personnel; and for planning controlling and assigning work.
g. Working Environment: The physical conditions encountered during a typical
work day. Conditions such as heat, cold, dirt, fumes, hazards, etc. are considered.
h. Student Relations: The responsibility for dealing with students, including the
nature and frequency of contacts.
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At the conclusion of the job evaluation process, the compensable factors are weighted. A
numerical total is then derived and each position is assigned a salary grade which has a salary
range A salary range consists of a:
The lowest wage paid to a new employee with limited or no experience in this specific
MINIMUM:
position.
MIDPOINT: The "market" (or average) wage paid to one who is fully qualified.
MAXIMUM
The highest wage paid for jobs in the salary grade.
:
Each salary range has different jobs, e.g. Clerk and Grounds Worker, because they have the same
relative value as determined by job evaluation.
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Salary ranges - intentionally overlap from one grade to another. Fully qualified incumbents in a
lower salary grade may be at the high end of their salary range, while the salary of a less
experienced employee in a higher salary grade may be near the minimum of the range. It is thus
thesameormore than the salary of an inexperienced incumbent in a higher rates position possible
that the salary of an experienced incumbent in a lower rated position will be.
Salary surveys are conducted annually and analyzed to establish and maintain competitive pay
levels with all the markets in which the university competes and recruits, as summarized in the
following exhibit.
SURVEY SOURCES
A. Exempt
1. Department Head National Customized surveys with data form selected private research
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2. Below Department Regiona Customized surveys with data from selected private research
Head l universities
3. Entry Level Local Local surveys for service employees and salary data from the
College Placement Association
B. Nonexempt
All Jobs Local Local surveys of selected manufacturing and service employers
(banks, insurance, health care, etc.)
This market data is correlated with the job evaluation results and salary ranges are established.
These ranges are then periodically reviewed and adjusted to reflect changes in the marketplace.
Starting salaries of new hires are normally placed within the first quartile of the salary range but
occasionally may go up to the range midpoint to accommodate special recruiting needs. Salary
progression in the range occurs over time, based on the salary budget and employee
performance.
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Sex-
Assesor:
Skills:(45)
Training time 15 10
Dexterity 10 08
Complexity 10 08
Basic knowledge 10 06
Respnsibility:(18)
For crash 04 01
Intermediate and finish product 04 03
Control over cost 04 03
For tools 03 03
For recrds ets: 03 01
Physical requirements:(05) 05 04
Working conditions:(12)
Working environment 08 06
Hazards 04 02
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JOB CLASSIFICATION
Grade A B C D E F
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Job analysis
Job rating
Salary/wage allocation
Employee classification
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Advantages
A base pay system provides an employer with a systematic approach to balance human resource
costs with the ability to attract and keep employees. It assures that the following criteria are
addressed:
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SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION
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