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Growing sophistication of survey methods and options should remain focused on key design decisions.

Organization data also important:

•Nature of organization

•Nature of total compensation system

•Incumbent/job

•HR outcomes
Who administers?
••Third-party anti-trust protection

••Confidentiality
How many employers?
••Geography may be a factor

••Peer approach (custom data option)

••Public data option
Which Jobs?
••All

••Benchmark

••High-Low

•• Benchmark conversion

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confirm the external policy - lead, lag, or match
select market - same occupation/skills, same geography, same products/services
Handle Fuzzy markets - anticipate inter-disciplinary settings and non-traditional competitors
design the survey - important: plan to get the most out of the survey effort

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what forms to pay?

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how much to pay?

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Management makes choices related to:

•Employer of choice status

•Offer employee choices

•Leverage cash and relational returns

in order to secure or maintain competitive advantage.
Performance driven, market match, work/life balance, and security.

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Competitive choices are to:

•Lead market

•Match market

•Lag market

in order to secure or maintain competitive advantage

Lead:
•Maximize attract/retain

•Increase satisfaction

•Increase costs
Match:
•May retain if good mix of pay options

•Pay mix may support satisfaction

•Productivity more important than costs
Lag:

Challenge to attract

Future returns (pay & relations) could help retain

Beneficial to cost but productivity impact unknown

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approaches management can take to balance needs.
Workforce needs: ability to attract and retain necessary workforce to carry out the business strategy.
Cost/Productivity: ability to contain cost yet benefit from higher productivity that higher pay can deliver
Satisfaction: influences perceptions of fairness as well turnover intentions and actual turnover

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single employer gains advantage from paying above or below the market
Supply - Human Capital: employee must see return to invest in training/skill development

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single employer gains advantage from paying above or below market

marginal product: additional product associated with employment of 1 additional person.

Marginal revenue: additional revenue generated by employment of 1 additional person

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unique to the organization and its business strategy; these factors also influence pay level and mix decisions
Labor market: supply/demand competition for the talent needed (external)
Product Market: availability and cost of talent to support productivity and profitability (external)
Organizational factors: includes technology, industry, personal preferences and culture (internal)

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•Encourages learning

•Potential for development, higher pay

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•Clear link

•Matches people to the work flow

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•Supports strategy

•Directly related to business objectives

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•Competencies underlie successful work behaviors, •Go beyond skills, knowledge, •Self-concepts, traits, motives, •Attitudes, disposition, thoughts that drive behavior

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Person based pay design
•Skills are relevant to type of work that must be done.
Focus is on depth and breath

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Protection from appeals and undue influence.

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Ranking: alternation ranking, paired comparison. Fast, simple and easy to explain but can be cumbersome for many jobs.
Classification: boundaries and slotting. can be used to group wide range of work but may include room for manipulation.
Point factor: factors, scales and weights. can be used to show what is valued but may be bureaucratic and rule bound

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Market pricing is not a traditional job evaluation method - limitation is matching all jobs to surveys - value of bench marking jobs for internal structure

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Internally aligned pay structure should meet the following objectives: supports the organization strategy, supports the workflow, is fair to employees, motivates behavior toward organization objectives

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Content: what needs to be done. what kind of work is being performed. how is the work getting done.

Value: how do we value these jobs. internal: use or exchange. External: market

Value cannot be determined without the external market. (can't ignore the competition)

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The utility of job analysis hinges on its success in sporting the values and strategy of the organization
Reliability, validity, acceptability and currency

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tradeoffs between time, resources, and analysis rigor

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Prepare: new job? periodic review? complaint?
Ask: interview, questionnaire, observation
Involve: managers, employees, other hr specialist
Anticipate: discrepancies, support, verify

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Reasons for job analysis and efficiency 

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Reasons for job analysis and efficiency 

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Career path/succession planning, organizational design, performance standards, performance appraisals, goal setting/time management, training, compensation administration, compliance/employee regulations, EEO/diversity, recruitment

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managers often are not aware of pay models or growing body of research into pay practices
Equity theory - employees make conscious comparisons
Tournament theory - players often prefer bigger prize differentials
Teams: individual performance + cooperative effort
Institutional theory: bench-marking as a normative habit
Consequences: upside to success alignment (efficiency), fairness (acceptance), and compliance (values)

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Reflects the differences on the scope of responsibility and range of pay among levels.
Hierarchy: likely has more levels, with smaller differences between
Egalitarian: has fewer levels, likely with broader range of tasks and freedom to do them

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Coupling refers to the contrast between consistency (little variance in pay) and flexibility (greater variance in pay)

Tailored (tight): jobs are well defined, detailed steps, minimizes variance.

Loose: need for innovation, multiple demands, process or customer focus

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Differentials refer to work requirements, work conditions, and value to organization.
Use Value: value of goods or services that an employee produces on the job.
Exchange Value: whatever wage the employer and employee agree on for the job.

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pay refers to the array of ray rates for different work or skills within a single organization. Levels, differentials and criteria are used to describe those differences.

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Internal alignment addresses jobs by:
Supporting Strategy: skills/competencies make up jobs, which are building blocks to produce success
Supporting Workflow: workflow is the process by which goods and services are delivered
Motivate Behavior: Structures create line of sight to help achieve organization objectives

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Paying groups in a special way in the most effective way (sales group)

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organizations need people with expert skills or values that the organization needs

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Organizations that have a cost cutting strategy have clear boundaries with strict rules - just get the job done

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specialist has a depth of experience in particular areas - generalist has a lot of breadth over a span of areas

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Job evaluations serve these two purposes. Job evaluations are like a force field between having standards and also being fair with employees. Help employees understand their job and accept their job -- employees and managers need to have confidence that job evaluations are done right.

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job descriptions (micro) > job evaluation (meso) > job structure (marco)

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refers to the pay relationships among organizations - the organizations pay relative to its competitors. In practice, competitive is expressed by pay level such as the average of the array of rates paid, the pay mix such as the various types of payments/forms making up total compensation, and in order to attract and retain the right employees.

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Refers to the pay relationships among different job/skills/competencies within a single organization

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Job evaluation is the process of systematically determining the relative worth of jobs to create a job structure for the organization. The evaluation is based on a combination of job content, skills required, value to the organization, organizational culture, and the external market

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Job analysis is the systematic process of collecting information that identifies similarities and differences in in the work.

One job at a time