Strategic Compensation in Canada Canadian 6th Edition Long Solutions Manual

Strategic Compensation in Canada Canadian 6th

Edition Long Solutions Manual

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 Chapter 7: Evaluating Jobs: The Job Evaluation Process

CHAPTER 7
Evaluating Jobs: The Job Evaluation Process

ESSENTIAL OUTCOMES

If nothing else, my students should learn:

1. How to develop useful job descriptions.

2. What is required for a job evaluation system to be seen as equitable.

LEARNING OUTCOMES

After completing this chapter, students should be able to:

 Explain the purpose of job evaluation and the main steps in the job evaluation process.

 Understand job analysis and the key steps in that process.

 Prepare useful job descriptions.

 Identify and briefly describe the five main methods of job evaluation.

 Describe the key issues in managing the job evaluation process.

 Understand the key reasons for pay equity and the general process for conforming to pay
equity legislation.

KEY CONCEPTS

Key concepts covered in Chapter 7 are job analysis and its four principle methods, the basic
elements and importance of job descriptions, the five main methods of job evaluation, issues in
conducting and managing the job evaluation process, and procedures for conforming to Ontario
pay equity legislation.

STUDENT MOTIVATION

Why should students care about the material in this chapter?

 Job evaluation is widely used in medium to large organizations, and it is important to

understand what it is based on and how to conduct it properly.

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 Chapter 7: Evaluating Jobs: The Job Evaluation Process

 Poorly done job evaluation can cause many problems for organizations, including
reduced employee motivation, satisfaction, and commitment.

BARRIERS TO LEARNING

 Students may see job evaluation as a very technical process in which they don’t want to
invest a lot of time. It is important for them to understand that failure to observe the
principles and concepts in this chapter can bring many problems to organizations.

 Without practice in application, students will not really be able to grasp the concepts in
this chapter.

ENGAGEMENT STRATEGIES

Start by reminding students that job evaluation is intended to measure the value of the job itself,
not the performance of the jobholder. Find out whether any students have been involved with job
evaluation where they work. What was their experience with it?

Note that a job evaluation system is only as good as the information on which it is based, which
is generally a job description. Briefly refer to the basic elements of a useful job description
(Compensation Notebook 7.1) and then launch into end-of-chapter Exercise 3

First, ask pairs of students to assess the sample job description against the seven basic elements.
Then, ask them to use Compensation Notebook 7.2 to see if any of these “Important Points to
Remember about Job Descriptions” could be of use in improving this job description. To
reinforce the learning, you could follow up with the Case Question at the end of the chapter.

Briefly review the process of job analysis, and ask students whether they can see any possible
pitfalls. Record these on the board, and add any they miss. Use the first suggestion under
“Possible Sources of Lecture Enrichment” to illustrate the process of job analysis.

Briefly review the five major methods for job evaluation, but then note that job evaluation is at
heart a subjective process, albeit one whose purpose is to ensure internal equity across jobs in an
organization. Acceptance of the results is as important as having reliable and valid results. How a
decision is made is as important as the outcome—the concept of procedural justice must be taken
into account. The concept of distributive justice, on the other hand, relates to the equity of the
amount of pay. Job evaluation must satisfy certain criteria of procedural justice if it is to be
perceived as properly managed.

Moving on to legislated pay equity requirements, this class could be started with a discussion of
whether or not students believe that it is right for employers to be constrained in setting their pay
rates, and that market forces should be the criterion for pay. Following this discussion, use Using
the Internet 1 (see “Possible Sources of Lecture Enrichment”) to work through the steps in the
process. (Note that Case Question 2 in Chapter 8 provides another opportunity for students to

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 Chapter 7: Evaluating Jobs: The Job Evaluation Process

work with the Ontario pay equity procedures.) The concept of equal value could also be
discussed using Compensation Today 7.1 as a starting point for this discussion. It can be further
discussed using Compensation Today 7.3 related to a pay equity complaint at the Ottawa Public
Library

ASSESSMENT TOOLS

To assess student learning against the chapter learning outcomes, before the end of the lecture,
students may be asked to write short answers to questions such as the following:
 What was the most important thing you learned during this class?
 What important unanswered questions do you have?

Students can compare their questions and answers with a classmate or you can invite
questions/responses from the large group.

REFLECTIONS ON TEACHING

The key to providing the best possible learning experience for students is continually assessing
the extent to which students are mastering the course material, and reflecting on ways to promote
the learning experience. This can be aided by instructors asking themselves the following
questions after each chapter:

 Which learning exercises/pedagogical activities really worked?

 Which didn’t work as well as I had hoped?
 Were students engaged with the material?
 Were students focused on key concepts, or were they distracted by tangents?
 Did my assessments suggest that students understood the concepts?
 Were my students able to relate and apply the concepts effectively?
 What should I do differently next time?
 How can I best gather student feedback?

ADDITIONAL RESOURCES

Chapter Summary

The four chapters in Part Three (“Determining Compensation Values”) provide the basis for
converting a compensation strategy into a compensation system. Part Three is based on the
premise that the actual compensation values for employees are normally a function of three main
variables: the value of the jobs they are doing, the labour market they are in, and their

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 Chapter 7: Evaluating Jobs: The Job Evaluation Process

performance levels. Chapters 7 and 8 cover the first of these variables, by showing how to
evaluate jobs. Chapter 7 deals with the general processes for evaluating jobs, while Chapter 8
takes the most commonly used job evaluation method—the point method—and shows how it is
developed and how a base pay structure can be built.

Chapter 7 starts by briefly recapping the purpose of job evaluation (which was discussed in depth
in Chapter 4). It then moves on to job analysis and describes how to develop useful job
descriptions, noting some of the possible pitfalls in the process. After that, the five main methods
of job evaluation are introduced and discussed, followed by the issues in conducting and
managing the job evaluation process. The chapter wraps up with a discussion of the procedures
for conforming to Ontario pay equity legislation. Although other Canadian jurisdictions have pay
equity legislation, Ontario is chosen as the example because its legislation sets the pattern for
other jurisdictions.

Suggested Answers to Discussion Questions

1. The purpose of a job evaluation is to ensure that all jobs in the organization are compensated
equitably and perceived by leaders and employees as being equitable. It is to ensure jobs are
not underpaid or overpaid. The output of the job evaluation process is a hierarchy of jobs,
where all jobs of similar value are located in the same level on the jobs hierarchy—thus
providing the foundation for the development of pay grades and pay ranges.

2. Job analysis is intended to gain accurate information about the jobs to be evaluated. It is
usually summarized in the form of a job description—a summary of duties, responsibilities
and reporting responsibilities pertaining to a job. Job specifications come out of the job
analysis and job description which are the employee qualifications identified as necessary to
perform the duties involved in a job.

3. There are several key issues in managing a job evaluation process. A job analysis will use
methods such as observation, interviews, and questionnaires as sources to help collect
detailed information about jobs. These methods can give first hand visual and verbal
understanding of jobs from various sources. This includes subject-matter-experts, managers
and employees themselves who work in these jobs on a day-to-day basis. Using multiple
sources can gain deeper insight into what people do in their jobs and also the subtle nuances
that exist and that one may not think of. With this accuracy come a number of challenges.
One is focusing too much on the jobholder rather than the job itself. Another problem is
gender bias in job descriptions, especially when it comes to language. Technical jargon can
also be an impediment to the understanding of jobs because it needs to be accurately
translated into everyday language for the job description. Another problem is oversimplifying
job duties. It is important jobs are described accurately, using simple straightforward, precise
language that has bias-free language. Finally, jobs that are dynamic or multi-dimensional or
related to changing laws, regulations or circumstances. When the job changes, often does the
job description and job specification. So information can become obsolete or inaccurate,
requiring once again to go back conduct another time consuming job analysis

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 Chapter 7: Evaluating Jobs: The Job Evaluation Process

4. Red-circled employees are ones who are paid above the maximum of a new pay range for
their jobs. Legal and motivational issues come into play for an organization that simply goes
to reducing an employees pay. An employer would “freeze” an employee’s pay at the current
level until the salary scales “catch up”. It can work well in times of higher inflation, but may
not work in times of lover inflation as the time it takes to “catch up” will be lengthy. This can
be more problematic if you have many red circled employees because no matter how well
you communicate this with employees, morale, and dissatisfaction often will become an
issue.

5. Pay equity legislation ensures gender equity in the workplace. Ontario has OPEA (Ontario
Pay Equity Act) and the process in the textbook follows this process given it is the largest
jurisdiction. If a company has fewer than 10 people, pay equity does not apply or if the
organization is federally legislated. The general process for pay equity is the same for all
employers covered by the act. First, the number of pay equity plans needs to be determined.
If unionized, there will be multiple plans, one for each bargaining unit. The second step is to
determine whether the organization has any female job classes within each pay equity plan
(i.e., a job class being a group of jobs that have similar duties, require similar qualification,
etc.). If pay equity laws do apply, step three is carry out the pay equity process using a
recommended employee-management committee. Next, the committee needs to develop a
gender-neutral job evaluation system that allows comparison of job classes as it relates to
skill, effort, responsibility and working conditions. Step five is to gather information for
evaluating the jobs. Next, the committee applies the job evaluation system to each job class
and develops a job hierarchy. Compensation then needs to be adjusted. Finally, the pay
equity plan and results should be communicated to employees. Students should see this
process as a very time consuming but important process. An egalitarian and respectful
workplace is critical in that is not only the right thing to do, but it also ensures an
organization can be competitive by attracting and selecting the best talent for their respective
organizations.

Notes for Exercise

1. This exercise provides students with more opportunity to understand the key issues involved
in developing useful job descriptions. This exercise can take the form of a class discussion.
Divide the class into pairs of students, and ask them to use Compensation Notebooks 7.1 and
7.2 as checklists to compare the “Drafter 1” job description against. Come together and
discuss which requirements the students think the job description does not meet.

Although the job description complies with most of the requirements, some additional
aspects might include:

 An indication of prioritization of job duties

 An indicator of proportion of total time required for each duty
 Tools or equipment required for each duty
 Mental and physical effort demanded by the job
 Expected outcomes as a measure of successful performance

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Strategic Compensation in Canada Canadian 6th Edition Long Solutions Manual

Chapter 7: Evaluating Jobs: The Job Evaluation Process

Notes for Case Question

1. Eastern Provincial University. This case question provides more opportunity for students to
understand the characteristics of useful job descriptions. Strengths of this job description
include the very detailed listing of duties and responsibilities, and clearly spelled out job
specifications (qualifications). However, there is no indication of the relative importance of
these job duties. Also, many of the key details noted in Compensation Notebooks 7.1 and 7.2
are missing, such as identification of the department the position is located in, reporting
relationships, and date of compilation. The job description for the Grounds Worker III
position is unwieldy, and possibilities for restructuring this description could be discussed.
(Note: This is a recurring case, and students can do further work with this case later in the
book. See Chapter 8, Case Questions 1 and 2.)

Possible Sources of Lecture Enrichment

The following weblinks can be used as a source of material for lecture enrichment:

 To illustrate how information for job analysis is collected, ask students to volunteer their
most recent jobs, and then show how to apply a position analysis questionnaire by using
http://www.asu.edu/hr/documents/PAQuestionnaire.pdf.

 To trace the steps required to create a gender-neutral job evaluation system that complies
with Ontario pay equity legislation, go to http://www.payequity.gov.on.ca and follow it
through in class.

 To check out the Canadian National Occupational Classification, go to

http://noc.esdc.gc.ca/. Information on the U.S. occupational classification system can be
found on the O*Net site: http://online.onetcenter.org.

 To review the findings of the Pay Equity Task Force, go to

http://publications.gc.ca/site/eng/9.687563/publication.html.

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