JOB EVALUATION & SALARY ADMINISTRATION

ILO 5:
Pricing the Jobs and Administering and Controlling the Job Evaluation Program

Course Content:
ILO5-A
 What is Job Pricing?
 What is Wage Survey?
 How to Conduct a Wage Survey
 Uses of Wage Survey
ILO5-B
 What is a Wage Curve?
 Developing a Salary Structure
 Assigning Money Values to Job Grades

ILO5-B

WHAT IS A WAGE CURVE?

The wage curve depicts graphically the relationship between the current average pay rates paid
for jobs in each pay grade and the rated point values assigned to each job after evaluation.

The purpose of the wage curve is to show the relationship between the value of the job as
determined by any of the evaluation methods and the current average pay rates for the pay
grades.

The derivation of the wage curve begins with the construction of a scatter diagram. The diagram
readily reflects the relative positions within the framework of the rate structure of all jobs
evaluated and shows at a glance how rational or irrational the wage structure is.

The diagram is constructed by plotting the position of each job. The point values along the
abscissa (the horizontal axis) and the rates in money or peso values up the ordinate (the vertical
axis).

After plotting the jobs in the scatter diagram, the trend or conversion line that best fits the
distribution points on the scatter diagram is determined. This will facilitate conversion of
evaluated points into money value into pesos. When drawing the line, attempt to minimize the
vertical distances between the job plots and the line. The best fit of the line may either be
straight or curvilinear. The form the line should take must be decided on the basis of the
clustering of the jobs along the line. Whether straight or curvilinear, the line of best fit is the
wage curve.

DEVELOPING A SALARY STRUCTURE

Before deciding on a wage structure, management should first determine what wage level policy
to adopt for the company which could be either one of the following:

1. Policy of average position where the company rate curve is identical with that of the wage
curve.
2. Policy on low wage scale where the company rate curve is lower than that of the survey
curve.
3. Policy on leadership where the company rate curve is higher than that of the survey rate.

When constructing a wage structure, a choice of single rate or a rate range can be applied to
each job grade. Where a single rate is assigned to a job grade or level, all jobs falling into that
grade or level automatically receive the assigned rate. The number of job grades governs the
number of rates in effect at any one time.

If the rate range is assigned to each job grade or level, all jobs falling into a particular grade or
level will carry the rate range of the grade or level. The use of rate ranges enables management
to reward seniority within a job grade or to recognize or reward individual merit in performance
or to do both. The number of rate ranges will depend on the number of job grades. The extent
of the rate range should be sufficient for rewarding merit and/or seniority within each job grade.
Policies will be needed to either set the number of the amount of steps which may be given or
merely establish the minimum and maximum limits of the rate range.

The BASE COMPENSATION STRUCTURE is a function of point values and monetary values. Pay
rates are established at different levels corresponding to the point values or range of points
used in the classification of jobs, thereby facilitating the conversion of a job’s relative value to its
equivalent pay rate.

One form of pay structure is to provide rate ranges for each job grade or pay class. This form
finds general acceptance because it recognizes and provides for rate increases within the range
for individual merit and/or longevity.

ASSIGNING MONEY VALUES TO JOB GRADES

After jobs have been plotted on the scatter diagram, conversion line drawn and adjusted to
reflect the wage rate survey, the number and worth of job grades determined as well as the
extent of rate ranges established, money values should be then assigned to job grades following
a simple procedure.
The procedure involves plotting the final wage curve on a sheet of graph paper large enough to
permit reading off rates to the nearest peso. . Along the abscissa of the graph, the midpoint of
each job grade is marked while up the ordinate, the money scale is marked off. From the
midpoint of each job grade, lines are drawn perpendicular to the abscissa and extended upward
until they meet the wage curve. From the point of intersection with the wage curve, the lines
are continued at right angles and parallel with the abscissa and extended to meet the ordinate
or money rate scale. At the point where the lines intersects the money scales, the rate (median
rate) for the job grade can be read.

Applying the rate ranges, these median rates are reduced or decreased according to the flat
rates or percentages determined for each job grade.

*****

QUESTIONS:

1. What is a scatter diagram?

2. What is the meaning of “conversion” as applied to job evaluation?
3. In constructing a wage structure, a choice between a single rate and a rate range can be
applied. Which would you recommend and why?

CAPSTONE 5-B
Triple K Company

Your General Manager called for an urgent meeting to discuss several complaints he received on
salary related matters, most of which came from the non-supervisory employees.

The nature of the complaints involves pay inequities. Some employees in the same salary grade
receive less compared to those who are relatively new, a few staff in a higher grade gets less
than some who are in a lower pay grade, no substantial pay differentials due to seniority and the
like.

You were instructed by the General Manager to look into these complaints and submit to him
your recommendations as soon as possible.

Your staff has submitted to you the following documents which can possibly assist you in your
analysis:
a. Position classification plan (Exhibit 1)
b. Salary data as of September 2015 (Exhibit 2)
c. Present salary scale for non-supervisory positions ( Exhibit 3)

Case Instructions:
 1. Prepare the salary scatter diagram for the Triple K Company.
2. Plot the company trend line and the present salary scale of Triple K Company.
3. Based on the salary scatter diagram, what conclusions can you make?

*THIS IS A GROUP EXERCISE. PLEASE WORK ON THIS CASE WITH YOUR RESPECTED GROUP.

Exhibit 1
POSITION CLASSIFICATION PLAN
(Non-Supervisory Positions)

PAY CLASS ADMINISTRATION ACCOUNTING/ AUDIT HUMAN RESOURCES

Security Inspector Auditor Training Coordinator

E
Executive Secretary Accounting Clerk III Executive Secretary
Property Custodian Confidential Staff Nurse
Administrative Staff Dept. Secretary Dept. Secretary
Liaison Staff Clerk-typist Psychometrician
D
Library Assistant Accounting Clerk II
Electrician
Mechanic
Shift Electrician Accounting Clerk I Records Clerk
Library Clerk Purchasing Assistant
AC Technician
Driver
C
Welder
Plumber
General Service Clerk
General Repairman
Carpenter Filing Clerk HR Clerk
Property Clerk Purchaser /Canvasser Clerk
Messenger
B Mason
Telephone Operator
Draftsman
Painter
Mechanic Helper Roving Clerk
Library Aide
A Shop Helper
Tool keeper
Gardener
Exhibit 2
SALARY DATA
(Non-Supervisory Positions)
(As of September 2015)

PAY Years of Gross Daily

Name of Employee Position Title
CLASS Service Monthly Pay Rate

1. Lising, Arlene Accounting Clerk III 9.5 25,285.40 831.30

2. Teves, Ron Training Coordinator 8.6 24,882.83 818.73
3. Moreno, Alma Executive Secretary 6.1 24,427.46 803.09
E 4. Marquez, Loida Executive Secretary 5.5 24,882.83 818.07
5. Salome, Vicky Auditor 0.4 25,650.37 843.30
6. Estrada, Myrna Auditor 1.5 26,149.11 859.70
7. Santos, Edna Auditor 0.3 24,430.73 803.20
8. Trilles, Wena Clerk Typist 9.2 23,738.34 780.44
9. Defensor, Jose Electrician 8.5 23,561.55 774.63
10. Atienza, Manny Property Custodian 7.3 24,755.11 813.87
11. Razon, Nenita Nurse 7.2 24,427.46 803.09
12. Arroyo, Erlinda Admin. Staff 6.3 24,051.57 790.74
13. Abalos, Edward Liaison Staff 4.4 24,051.57 790.74
14. Apostol, Jun Confidential Staff 4.4 23,738.34 780.44
D
15. Ermita, Emma Library Assistant 4.3 23,738.34 780.44
16. Bunye, Rose Dept. Secretary 1.9 22,055 .00 725.10
17. De Venecia, Edwin Property Custodian 1.5 22,385.00 735.95
18. Escudero, Aida Nurse 1.4 23,850.64 784.13
19. Nograles, Corazon Psychometrician 0.7 23,738.34 780.44
20. Alano, Boy Electrician 0.5 23,051.00 757.84
21. Lozada, Julia Psychometrician 0.3 23,738.34 780.44
C 22. Gordon, Victor Shift Electrician 9.7 21,750.00 715.06
23. Pimentel, Larry General Repairman 9.5 20,500.00 673.97
24. Santiago, Pedro Welder 9.1 20,800.00 683.83
25. Villar, Ernesto General Repairman 7.3 19,500.00 641.09
26. Zubiri, Phillip Shift Electrician 6.3 19,875. 00 653.42
27. Rerez, Joy Library Clerk 4.8 21,600.00 710.13
28. Encarnacion, Ester Accounting Clerk I 4.7 22,735.00 747.45
29. Revilla, Olive Accounting Clerk 3.7 21,800.00 716.71
30. Lapid, Dina Records Clerk 3.6 19,750.00 649.31
31. Pangilinan, Jose Driver 3.6 18,500.00 608.21
32. Honasan, Martin AC Technician 1.9 19,000.00 624.65
33. Trillanes, Martin Purchasing Assistant 2.5 19,750.00 649.31
34. Biazon, Rey Driver 1.3 16,500.00 542.46
35. Cayetano, Sonia General Service Clerk 0.8 18,000.00 591.78
 36. Madrigal, Belen Accounting Clerk I 0.6 20,150.00 662.46
37. Yap, Eric Messenger 9.4 18,500.00 608.21
38. Legarda Ricardo Purchaser 9.1 19,600.00 644.38
39. Enrile Florindo Property Clerk 8.6 21,400.00 703.56
40. Lacson, Lemuel Carpenter 8.2 20,500.00 673.97
41. Fajardo, Napoleon Draftsman 7.5 19,400.00 637.80
42. Abesamis, Pedro Carpenter 3.9 17,600.00 578.63
B
43. Gonzalez, Felipe Messenger 3.3 16,500.00 542.46
44. Rosas, Estela Clerk 1.7 16,400.00 539.17
45. Santos, Mercy Telephone Operator 1.4 16,400.00 539.17
46. Aguilar, Connie HR Clerk 1.3 17,500.00 575.34
47. Valdemor, Connie Filing Clerk 0.8 15,000.00 493.15
48. Padilla, Ramon Painter 0.2 15,000.00 493.15
49. Montemayor, Ed Gardener 5.9 16,500.00 542.46
50. Maramba, Danny Roving Clerk 4.3 18,500.00 608.21
A
51. Escueta, Vicente Library Aide 3.3 15,500.00 509.58
52. Flores, Rico Library Aide 1.3 15,000.00 493.15

Exhibit 3
SALARY SCALE
(Non-Supervisory Positions)

PAY CLASS MINIMUM MAXIMUM

A 15,000.00 17,598.00

B 16,500.00 19,800.00

C 18,000.00 21,600.00

D 20,500.00 26,150.00

E 23,000.00 29,900.00

(Approved August 16, 2015)

Exhibit 4
LIST OF POSITIONS WITH POINT RATING

GRADE POSITION TITLE POINT RATING

1. Auditor 890
 2. Training Coordinator 880
3. Security Inspector 875
V-E
4. Executive Secretary 860
5. Accounting Clerk III 855
6. Psychometrician 840
7. Nurse 835
8. Property Custodian 832
9. Department Secretary 830
10. Accounting Clerk II 800
11. Administrative Staff 770
IV-D
12. Confidential Staff 760
13. Liaison Staff 750
14. Clerk Typist 700
15. Library Assistant 705
16. Electrician 710
17. Mechanic 710
18. Accounting Clerk I 690
19. AC Technician 680
20. Purchasing Assistant 660
21. General Service Clerk 660
22. Records Clerk 650
III-C 23. Staff Electrician 640
24. Library Clerk 640
25. Driver 600
26. General Repairman 590
27. Plumber 580
28. Welder 580
29. HR Clerk 549
30. Purchaser/Canvasser 540
31. Draftsman 530
32. Carpenter 520
33. Painter 520
II-B 34. Filing Clerk 500
35. Property Clerk 500
36. Clerk 500
37. Telephone Operator 450
38. Mason 410
39. Messenger 400
40. Roving Clerk 310
41. Library Aide 300
42. Tool Helper 290
I-A
43. Mechanic Helper 290
44. Shop Helper 290
45. Gardener 260
Exhibit 5
JOB CLASSIFICATION TABLE

JOB GRADES POINT RANGE

E 850 - 1000

D 700 - 849

C 550 - 699

B 400 - 549

A 250 - 399