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11-multicriteria job evaluation for large organizations

11-multicriteria job evaluation for large organizations



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Multicriteria job evaluation for large organizations
A. Spyridakosa,*, Y. Siskosb, D. Yannacopoulosc, A. Skourisc

aBusiness Administration Department, Technological Educational Institute of Piraeus, P. Ralli and Thivon 250, 12244 Aigaleo, Greece
bDSS Laboratory, Technical University of Crete, 73100 Chania, Greece
cGreek Telecom SA, Marousi, Athens, Greece

Received 3 December 1998; accepted 22 June 1999

The job evaluation problem presents particular characteristics, the most important of which are: (1) the existence of multiple factors that in\u00afuence the evaluation; (2) the decision is often the duty of a committee; and (3) the available data include fussiness while the description, responsibilities and requirements of the jobs are usually not precisely deter- mined. Nevertheless, job evaluation for large organisations is a crucial activity that enables the rationalisation of the links between the importance of a job and the corresponding rewards.

In this paper a multicriteria disaggregation\u00b1aggregation approach is proposed to deal with the problem. Speci\u00aecally, the UTA-II method was used in order to assess a consistent additive value model that allows the ranking of the jobs according to its relative importance. An application of this approach into a large Greek organisation is also described in order to present the adjustment of the multicriteria disaggregation\u00b1aggregation philosophy to this kind of evaluation problems. The implementation of this research project was supported by the MIIDAS system, which applies the above- mentioned approach.\u00d3 2001 Elsevier Science B.V. All rights reserved.

Keywords:Multi-criteria decision support; Job evaluation
1. Introduction

One of the recent trends in the management of large private or public enterprises is mainly based on two processes: (a) the competence related hu- man resources management; and (b) the perfor- mance management. The \u00aerst is oriented towards

the improvement of the production or the services o\u0080ered by exploiting the capacity that exists in a person so as to satisfy the job demands. The sec- ond concerns the management and development of human resources and is based on the principles of management by contracts or agreements. These two processes are linked together since: (a) com- petence involves personal trait, characteristics and skills, which are related to e\u0080ective or outstanding job performance (Murphy, 1993); and (b) perfor- mance management emphasises the development and initiation of self-management plans as well as

European Journal of Operational Research 130 (2001) 375\u00b1387
*Corresponding author.
E-mail address:tspyr@01p.gr (A. Spyridakos).
0377-2217/01/$ - see front matter\u00d3 2001 Elsevier Science B.V. All rights reserved.
PII: S 0 3 7 7 - 2 2 1 7 ( 0 0 ) 0 0 0 3 9 - 4
the integration of individual and corporate objec-

The job evaluation is a systematic process that enables the design and establishment of human resources improvement procedures and fair reward systems. Actually, job evaluation concerns the as- sessment of a value system that encapsulates the importance of the parameters that re\u00afect the global responsibility and duties of a job. It is re- markable that job evaluation does not concern the holders of the job but how responsible the job is and its share in the production of the desired re- sults.

The upshot of the job evaluation has a positive in\u00afuence on the above-mentioned two processes (competence and performance management) since it:

(a) aids the establishment of a reward system that links the importance of the jobs to the pay- ment o\u0080ered, and

(b) supports the designation of human re- sources development requirements in order to improve the e\u0080ectiveness of the jobs\u00d5 opera- tion.

This paper deals with the design and the imple- mentation of a job evaluation system, which is based on the multicriteria disaggregation\u00b1aggre- gation UTA II method (Siskos, 1980). The re- search work that is presented in this paper aims at dealing with the particular characteristics of the job evaluation problem by utilising the features of the disaggregation\u00b1aggregation approach (Siskos et al., 1993; Jacquet-Lagr\ue000eze and Shakun, 1984; Despotis et al., 1990; Hammond et al., 1977). This approach was used for the evaluation of the managerial jobs of a large Greek enterprise. The outcome of this study was utilised to design the payroll system.

The paper consists of an Introduction and four other sections. An analysis of the job evaluation problem and its associations with the payroll strategy are presented in Section 2. In Section 3, the methodological frame of the proposed multi- criteria approach is analytically described. Then, the above-mentioned case study is presented. Fi- nally, the paper concludes by reviewing the out- come of the proposed methodology on this kind of evaluation problems.

2. The role of job evaluation in organisations

Job evaluation includes comparative processes due to the fact that the relations and dependencies among the jobs have to be explained. This consists of an essential determinant that allows the man- agement (through the analysis of the targets, achievements and factors that in\u00afuence the re- quirements of the jobs) to assign the correspond- ing proportions of every job. For this reason job evaluation usually includes an extensive analysis of the roles, the objectives and the corresponding actions and achievements of the jobs (Elliott, 1991). The outcome of this analysis is the estab- lishment of structures that aid the comparison among the jobs and support the evaluator(s) to make consistent and reasonable judgements. This is the reason why analytical processes have to be implemented so as to make the collection and handling of the required data be e\u0081ciently achieved.

In most of the cases, especially in large organ- isations, job evaluation is the duty of a committee composed of medium and high level managers. Usually members of the workers' union also par- ticipate in the Evaluation Committee. Conse- quently, it is expected that there will be less objectivity and con\u00aficting standpoints are likely to arise. Nonetheless, it is obvious that a global ac- ceptance of the job evaluation model constitute a critical factor that e\u0080ects the e\u0081cient utilisation of the planned reward system.

Furthermore, di\u0081culties and crucial factors ap- pear in the design and enforcement of a job evalu- ation system and it is not incongruous to consider that it is a semistructure or unstructured decision problem (Roy, 1985). Some of these particular characteristics are described in the following:

\u00b7There is a rather large number of linked or con-
\u00aficting factors, which in\u00afuence the evaluation.
\u00b7There is no step by step procedure or a structure

that enables the direct evaluation of the jobs. In addition, every enterprise has its own strategic and market plans that entail an individual nature for the job evaluation procedure.

\u00b7There is a wide di\u0080erentiation among jobs in re-
lation to their contribution to the results (quan-
titative and qualitative) of the enterprises. Some
A. Spyridakos et al. / European Journal of Operational Research 130 (2001) 375\u00b1387

jobs have mainly supportive orientation (e.g. In- formation Centre, Human Resources Manage- ment) and others have a direct bearing to the creation of the results (e.g. Marketing Depart- ment, Branches, Sales Department, etc.). For the \u00aerst group of jobs is often di\u0081cult to esti- mate their contribution to the results of the or- ganisation and to establish a fair measurement system.

\u00b7The enterprises (public or private) operate in a

dynamic environment. Consequently, the job evaluation data as well as the strategy and the policy of the organisations are continuously un- der modi\u00aecation or adaptation.

Job evaluation within organisations aims at the establishment of a relative value system that rein- forces payroll decisions. The main attitudes of the job evaluation system can be categorised as fol- lows:

\u00b7provides a rational framework for planning and
establishing a fair payroll structure;
\u00b7allows job relation management within organi-
\u00b7aids the de\u00aenition of the payroll analogies that
are correlated to the corresponding work (equal
payment for equal work).

The above described lead the analysts to take into consideration three factors during the design of the payroll system:

\u00b7The trends of the labour market since equilibri-
um is commonly established between the labour
needs and the salaries o\u0080ered.
\u00b7The job importance from the organisation\u00d5s
management point of view, which is the object
of the job evaluation system.
\u00b7The jobholder\u00d5s performance (performance
measurement system).

For the job evaluation a considerable number of approaches have been developed and used. The most simple of them treat the problem providing a ranking or a classi\u00aecation of the jobs based on a simple comparative process or on a simple points factor rating system (Armstrong and Murlis, 1994; Neathley, 1994).

One common approach consist in providing a ranking of the jobs according to the perception of their relative size. This approach is characterised by low degree of rationality since the judgement of

the relative sizes of the jobs is not based on a kind of standards or measures. Another approach uti- lises a scale for the classi\u00aecation of the jobs. Dif- ferent levels of grades are assigned into a number of characteristics such as ``decision making'', ``knowledge required'' and ``equipment used''. Every job is posed on a position on the total scale by its evaluation on the characteristics. This ap- proach can be easily applied in cases where: (a) there is a small number of jobs to be evaluated; (b) the jobs are not too complex and they can be de- scribed by the characteristics used; and (c) it is quite easy to determine the borderlines between two neighbouring positions on the scales for every characteristic. Another commonly used approach is based on the comparison of the jobs with an internal benchmark one. This approach cannot be applied in cases where there is a small number of jobs and a high degree of di\u0080erentiation among the jobs does not exist. Otherwise it is di\u0081cult to de- \u00aene a job which can be used as a benchmark.

The most common approach is the ``point fac- tor rating'' (Candlili and Armagast, 1987; Plachy, 1987). According to this method the evaluation of the jobs derives from a multiattribute value sys- tem. The principles of this value system are based on the essential of the Multiattribute Utility The- ory (Keeney and Raifa, 1976; Keeney, 1992). This approach is widely used by management consul- tants and usually provides reasonable results but lacks on the estimation of the weights of the at- tributes and on the evaluation of the jobs on the criteria. Actually, the factors\u00d5 weights are esti- mated through a survey analysis or are directly expressed by an expert or a management consul- tant. It is obvious that in this case the determina- tion of the components of the value system operates like a ``black box'' for the organisation. Also, the individual circumstances of the enter- prise or organisation are not taken into account to the extent that is required.

In spite of the job evaluation assessment pro- cedures the payroll strategies can be e\u0081ciently determined based on a rational evaluation system. Most of the cases the payroll is a combination of:

\u00b7A standard bonus aligned to the ranking of the
job positions in the organisation\u00d5s job evaluation
A. Spyridakos et al. / European Journal of Operational Research 130 (2001) 375\u00b1387

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