Professional Documents
Culture Documents
Student - Wage & Salary Administration
Student - Wage & Salary Administration
07/20/21 M.T.Macalinao,SLSU-TNU 1
QUẢN TRỊ TIỀN CÔNG VÀ TIỀN LƯƠNG
07/20/21 M.T.Macalinao,SLSU-TNU 2
WAGE AND SALARY
ADMINISTRATION
Expected Learning Activities:
1.Learn the theories / 0ieri/
2.Apply the theories
3.Create a Job Evaluation Plan- lập kế hoạch
đánh giá công việc
4.Create a Performance Rating Form- tạo biểu
mẫu xếp hạng hiệu suất
07/20/21 M.T.Macalinao,SLSU-TNU 3
Four kinds of employee compensation/kompenseishn/ sự đền bù:
07/20/21 M.T.Macalinao,SLSU-TNU 9
BASIC DETERMINANTS OF SALARY
1. The relationship between jobs and wage rates.
Salaries paid for jobs vary because of
differences among jobs and in the way
people do their work. The relationship
between jobs and wages rates involves three
considerations:
a. The qualifications required for the job.
b. Worker supply and demand.
c. The duties and responsibilities of the job.
07/20/21 M.T.Macalinao,SLSU-TNU 10
BASIC DETERMINANTS OF SALARY
Các cá nhân làm cùng một công việc
2. The recognition of khác nhau về khả năng, kinh nghiệm, kỹ
individual differences. năng và hiệu quả. Một số cá nhân có khả
Individuals doing the same job differ in năng xử lý các công việc trí óc tốt hơn
ability, experience, skill, and những người khác. Nhìn chung, một số
người làm việc hiệu quả hơn so với đồng
efficiency. Some individuals are nghiệp của họ. Những khác biệt này cần
more capable of handling mental được ghi nhận thông qua hệ thống đánh
tasks than others. Some are more giá thành tích và được cung cấp trong cơ
efficient in general than their co- cấu tiền lương thể hiện thang lương cho
workers. These differences should từng công việc. Bằng cách này, một nhân
be recognized through a merit viên bắt đầu với mức lương cơ bản cho
rating systems and provided for in a công việc có thể mong muốn được tăng
salary structure embodying a pay lương khi anh ta đạt được trình độ và kinh
scale for each job. In this way, an nghiệm cao hơn.
employee who starts at the base
rate for the job can aspire /espaie/
for pay increases as he gains
greater proficiency and experience.
07/20/21 M.T.Macalinao,SLSU-TNU 11
BASIC DETERMINANTS OF SALARY
3. The level of pay existing in the community.
Workers with high qualifications are relatively
few. Efficient workers are in demand. One
way to attract and retain competent
/kompitnt/ and highly qualified workers is to
maintain salaries at a level reasonably
/ne.bli/equal to the prevailing
/priveiling/rates for similar jobs in the
industry or with other firms in the
community. This is best accomplished
through wage surveys.
07/20/21 M.T.Macalinao,SLSU-TNU 12
BASIC DETERMINANTS OF SALARY
4. The company’s ability to pay.
Employers generally pay their employees
according to their financial ability. Firms
that are marginal /ma:d3inl/ cannot pay
as much wages as companies with bigger
earning power, without endangering
their continued existence.
07/20/21 M.T.Macalinao,SLSU-TNU 13
BASIC DETERMINANTS OF SALARY
5. Labor costs.
Certain /se:tn/types of industry or business
have greater earning power than others.
In a highly competitive industry, a
company with a bigger capital and greater
volume of production and sales is in a
better position to pay higher wages.
07/20/21 M.T.Macalinao,SLSU-TNU 14
BASIC DETERMINANTS OF SALARY
6. Cost of living.
The purchasing power of the money that
the employee receives /ri.si:v/ from his
employer determines the amount of
essential needs for decent living that the
employee could provide himself and his
family.
07/20/21 M.T.Macalinao,SLSU-TNU 15
BASIC DETERMINANTS OF SALARY
7. Collective bargaining.
In unionized /ju:nienaizd/ firms, wages and
salaries are largely determined through
collective bargaining negotiations. The
bargaining positions are based on prevailing
wage rate, the cost of living and other relevant
factors. The salary rates that are finally agreed
upon is often the result of the skill which the
parties are able to effectively employ in their
bargaining strategies.
07/20/21 M.T.Macalinao,SLSU-TNU 16
BASIC DETERMINANTS OF SALARY
8. Minimum Wage Fixing.
The Labor Code in prescribing /pri.skraib/ the
criteria /kraitiarie/for establishing
/i.staeblish/ the minimum wage, state that
said wage must be as nearly adequate
/aedikwet/ as is economically feasible
/fizebl/to maintain the minimum standards
of living necessary for the health, efficiency
and generally well-being of the employees
within the framework of the national
economic and social development program.
07/20/21 M.T.Macalinao,SLSU-TNU 17
DIFFICULTIES IN WAGE ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 19
DIFFICULTIES IN WAGE ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 20
DIFFICULTIES IN WAGE ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 21
DIFFICULTIES IN WAGE ADMINISTRATION
4. Lack of measuring device which can establish to the
satisfaction of all concerned what a man’s services are
worth (Pesos/Vietnam Dong).
The worth of a man’s services in terms of pesos and centavos
is hard to determine. Individuals differ in the way they
evaluate the worth of their services. Some consider such
factors as their social standing in the community, family
background, personality, and educational attainment. Job
evaluation and merit rating have been found so far to be
the best methods of meeting this problem but they still
need a great deal of selling before they are fully accepted
by both management and the workers.
07/20/21 M.T.Macalinao,SLSU-TNU 22
DIFFICULTIES IN WAGE ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 23
DIFFICULTIES IN WAGE ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 24
DIFFICULTIES IN WAGE ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 25
CAUSES OF WAGE INEQUITIES (k công bằng)
Definitions
A salary is said to be equitable when it has a sound
relationship with the salaries paid for other jobs in the
company. Such relationship is based on the complexity of the
job, the responsibilities involved and the rates being paid in
the community for similar work.
07/20/21 M.T.Macalinao,SLSU-TNU 26
CAUSES OF WAGE INEQUITIES
1. Pressure of aggressive employees or supervisors.
2. Favoritism /riti/among supervisors.
3. Seniority./si:ni,oreti/ tham nieen
4. The feeling of being important.
5. Union pressure.
6. Faulty classification of jobs.
7. Absence of job evaluation. Kh co dang gia c.vc
8. Compensation plan not kept up-to-date.
07/20/21 M.T.Macalinao,SLSU-TNU 27
CAUSES OF WAGE INEQUITIES
1. Pressure of aggressive employees or supervisors.
Some employees and supervisors use pressure on
their superiors for higher pay or for more frequent
salary raises regardless of merit. If such pressure is
not resisted, there is bound to be an increase in
the payroll of the firm beyond the budget or the
company’s available funds. This also results in
glaring injustices, since the increases that should
go to deserving workers go to those who exert the
harder pressure instead.
07/20/21 M.T.Macalinao,SLSU-TNU 28
CAUSES OF WAGE INEQUITIES
2. Favoritism among supervisors.
07/20/21 M.T.Macalinao,SLSU-TNU 29
CAUSES OF WAGE INEQUITIES
3. Seniority.
07/20/21 M.T.Macalinao,SLSU-TNU 30
CAUSES OF WAGE INEQUITIES
4. The feeling of being important.
Some zealous department heads and supervisors
sometimes erroneously put their respective
departments and functions as the most important
in the company. Hence, they feel that their
employees should receive higher pay than those
in the other departments and do all they can to
achieve this. A sound company-wide pay policy
however should not permit such inequalities in
pay for similar jobs in different departments.
07/20/21 M.T.Macalinao,SLSU-TNU 31
CAUSES OF WAGE INEQUITIES
5. Faulty classification of jobs.
07/20/21 M.T.Macalinao,SLSU-TNU 32
CAUSES OF WAGE INEQUITIES
6. Faulty classification of jobs.
Inconsistencies in the classification and assignments of jobs
within and between organizational units are other causes of
wage inequities. The errors of inexperienced job classifiers or
job evaluators result wage administration problems. In
describing their jobs, some employees make them appear
more difficult than they really are. Other employees who are
less articulate, fail to describe their jobs with enough clarity
to give a true picture of their worth. On this basis, the jobs in
the company cannot be properly classified. Such deficiencies
can be avoided by employing competent job analysts and job
evaluators.
07/20/21 M.T.Macalinao,SLSU-TNU 33
CAUSES OF WAGE INEQUITIES
7. Absence of job evaluation.
07/20/21 M.T.Macalinao,SLSU-TNU 34
CAUSES OF WAGE INEQUITIES
8. Compensation plan not kept up-to-date.
07/20/21 M.T.Macalinao,SLSU-TNU 35
INTER-COMPANY INEQUALITIES IN PAY
07/20/21 M.T.Macalinao,SLSU-TNU 36
INTER-COMPANY INEQUALITIES IN PAY
Inequalities in pay rates among different companies
further complicate the difficulties involved in wage
administration. Employees often compare their pay with
that received by other employees in the same firm and
also with what is paid by other firms for similar work.
When an employee learns that his pay is lower than
what another firm pays for the same or a similar job, he
becomes dissatisfied with his pay and gets demoralized.
He starts thinking of transferring to a better-paying firm
and spends much time looking for another job to the
neglect of his present work.
07/20/21 M.T.Macalinao,SLSU-TNU 37
INTER-COMPANY INEQUALITIES IN PAY
07/20/21 M.T.Macalinao,SLSU-TNU 38
INTER-COMPANY INEQUALITIES IN PAY
2. Collective bargaining.
07/20/21 M.T.Macalinao,SLSU-TNU 39
INTER-COMPANY INEQUALITIES IN PAY
07/20/21 M.T.Macalinao,SLSU-TNU 40
INTER-COMPANY INEQUALITIES IN PAY
4. Management’s generosity.
Some companies are more generous in granting wage
and benefits to their employees than others
because of their ability to run the business
profitably. Such firms are generally owned or
managed by employers who believe that they are
mere stewards of the enterprise and that the firm
exists for the service of their fellowmen. Other
firms are managed by men who believe that a
contented worker is a productive worker.
07/20/21 M.T.Macalinao,SLSU-TNU 41
OTHER PROBLEMS IN SALARY ADMINISTRATION
“Equal pay for equal work” means that the same rate of
compensation should be paid to all employees in a company
who do similar work regardless of age, sex, or other
personal circumstances of the individual employee. The
principle of equal pay for work of equal value within a firm’s
wage structure is a sound wage policy. The law upholds this
principle and provides that the employer should pay equal
remuneration for work or equal value for both men and
women employees. This is based on the principle that the
job should be paid the standard rate of pay in accordance
with its classification and salary range and not because of
the person on the job.
07/20/21 M.T.Macalinao,SLSU-TNU 42
OTHER PROBLEMS IN SALARY ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 43
OTHER PROBLEMS IN SALARY ADMINISTRATION
• A flexible time is a working hour arrangement in which the working
hours during the day may vary among employees but the total
number of hours worked within the period is not less than the
number of hours for which straight time wages are paid. Under this
arrangement, an employee may report to office or leave the office at
any time provided he completes the total number of working hours
required for the day and provided further that he is in the office
during the “core time period”.
• A “core time period” is a specific office time in each given work day
where all employees should be in the office to allow for proper
coordination. This is usually between 9:00 A.M. to 12:00 noon and
from 1:00 P.M. to 3:00 P.M.
• The optional time is allowed in the arrival time in the morning and in
the dismissal time in the afternoon but all the employees must
complete the required total number of hours of work for the day.
07/20/21 M.T.Macalinao,SLSU-TNU 44
PROGRAM FOR WAGE AND SALARY
ADMINISTRATION
07/20/21 M.T.Macalinao,SLSU-TNU 45
PROGRAM FOR WAGE AND SALARY ADMINISTRATION
Elements ofUsed
Technique a Formal Wage and Salary Programof Technique
Objective
Job Analysis: To gather and record job facts, duties, responsibilities and work
Job Description and in conditions and job requirements. The back bone of job
Specification evaluation.
Job Evaluation To determine relative job worth.
Job Grading To classify evaluated jobs into pay grades or pay classes. This
series of pay grades is called the job classification plan.
Job Pricing To translate relative job worth into money values.
Wage and Salary To determine the wages and salaries of comparable jobs in
Survey other firms.
07/20/21 M.T.Macalinao,SLSU-TNU 46
PROGRAM FOR WAGE AND SALARY ADMINISTRATION
Elements of a Formal Wage and Salary Program (continuation)
Technique Used Objective of Technique
Wage and Salary To provide a specific rate schedule of all jobs in the company.
Structure
Merit Plans: To reward employees for better performance on the job.
Performance Appraisal
Incentive Plans To reward employees for output higher than the usual standard rate
of production
Fringe Benefits To provide supplemental compensation as added incentives, and
promote morale.
Administrative To solve individual problems, keep the program current and operating
Procedures and Practices efficiently, review and provide general guidance to supervisors and
managers.
Communications To give supervisors and managers the information they need to know
in order to carry out the program and to gain acceptance of the
program
Controls To insure reasonably consistent and current application of the
program and to maintain control over cost.
07/20/21 M.T.Macalinao,SLSU-TNU 47
PLANNING THE PROGRAM
1. Job Analysis: Job Description and Specification
2. Evaluating Jobs
3. Wage Survey
4. Wage and Salary Structure
5. Maximum Pay Level
6. Grading the Jobs and Positions
7. Job Pricing
8. Provision for Performance Rating
9. Performance Level Ranking in Wage Setting
10.Responsibility for Salary Administration
11.Selling the Compensation Program to Management and
Employees
12.Salary Review
07/20/21 M.T.Macalinao,SLSU-TNU 48
WAGE PAYMENT PLANS
1. Time Unit Plans
A day work wage plan is a method in which the worker’s earnings are
based upon time on the job. When the time unit is the day, wage
rates are stated in terms of per day of so many hours. If by the hour,
the wage rates are given in hourly wage rates. In the latter case, the
worker’s earnings are computed by multiplying the number of hours
worked by the rate per hour.
A straight salary plan is used when an employee is paid for the time
he spends on the job. The day, week or month is commonly used as
the basis for the time unit.
Under the time unit plans, wages are not determined directly by
output so management has to depend upon the worker to produce in
return for his wages. His productivity depends upon the foreman or
supervisor who must maintain constant surveillance over the
worker’s operations.
07/20/21 M.T.Macalinao,SLSU-TNU 49
WAGE PAYMENT PLANS
2. Incentive Plans
This is a method of compensating workers in direct
proportion to the amount of production above pre-
established minimum requirements or standards. Its
objective is to reward and encourage higher than the
standard rate of production.
07/20/21 M.T.Macalinao,SLSU-TNU 50
WAGE PAYMENT PLANS
3. Piece Rate or Payment by Results
• A worker is paid proportion to the quantity of work he finished or for
performing some definite task with time. Each unit is given a fixed
amount or price to be paid the worker. This plan is very easy to apply,
and therefore very popular in industry. It has the advantage of having
a direct relation between what a worker produces and what he earns.
There is no difficulty is calculating the worker’s earnings because he is
paid for what he produces according to his own speed. It provides a
strong incentive for the worker to accomplish more.
• Piece rate may be on either an individual or group basis. It
combines output quantity which in turn is divided by a time rate in
money. The piece rate, therefore, relies on the manner in which the
output and/or the money has been determined among the workers. If
either of these elements change, each piece rate must be
recalculated, otherwise the differentials will be upset.
07/20/21 M.T.Macalinao,SLSU-TNU 51
WAGE PAYMENT PLANS
4. Group Incentives
In some situations, a group of workers work
together as a team in such a way that it would
be difficult to reward individuals for their
specific contribution. In this case, the total
production of the group is measured and each
member of the team is given his share either
equally among them regardless of individual
production or in accordance with the
agreement of the members of the group.
07/20/21 M.T.Macalinao,SLSU-TNU 52
WAGE PAYMENT PLANS
5. Wage or Salary Plus Premium or Bonus
The bonus plan consists of two elements:
a. Standard or Minimum Requirement, and
b. Bonus or Premium
The predetermined amount of output during a given period
of time is established as the minimum requirement or the
standard. The worker is paid a bonus if his output is in excess
of or above the minimum requirement or standard which,
therefore, is a production in less time per unit. The bonus is
usually given on either a fixed amount basis or on percentage
of the amount of output in excess of minimum requirements,
or of time saved below standard.
07/20/21 M.T.Macalinao,SLSU-TNU 53
DIFFERENT TYPES OF WAGE AND SALARY
ADJUSTMENTS
07/20/21 M.T.Macalinao,SLSU-TNU 54
DIFFERENT TYPES OF WAGE AND SALARY
ADJUSTMENTS
1. CBA General Wage Increase.
These increases are usually given to all eligible bargain
able staff in accordance with the wage settlement
contained in the collective bargaining agreement.
2. Cost of Living Allowance (COLA)
This increase takes into account the cost of living which is determined on
the basis of generally accepted official government statistics (ex., the
Consumer Price Index). Such an increase may be given when a more-than-
nominal increase in prices is registered within a period of time. The cost of
living allowances may either be integrated with the base pay or granted as a
separate allowance, depending on the provisions of the CBA or the
discretion of management.
07/20/21 M.T.Macalinao,SLSU-TNU 55
DIFFERENT TYPES OF WAGE AND SALARY
ADJUSTMENTS
3. Merit Increase.
This refers to a salary increase granted to an employee for a very
satisfactory performance of his job. The amount of merit increase
may be directly pegged to the performance rating but in some firms,
performance appraisals are further translated into performance
level rankings, which stratify merit increases into maximum
percentages and restricting them to above average and outstanding
performers.
4. Promotional Increase
This increase is given because of a promotion in position and is
granted either upon assumption of the position or upon
confirmation of the promotion. A promotion involves a movement
to a position with higher responsibility.
07/20/21 M.T.Macalinao,SLSU-TNU 56
DIFFERENT TYPES OF WAGE AND SALARY
ADJUSTMENTS
5. Level Adjustment.
In order to maintain salaries on a competitive level, level adjustments may
be necessary if differences are noted in salary alignments with respect to
certain professional groups or with industry rates. In most cases, level
adjustments are resorted to when findings reveal that rates are below or
are lagging behind the industry rates.
6. Reclassification Increase
This increase is recommended for or granted to an employee upon the
reclassification or his current position to a higher salary level. A
reclassification may be necessary when, because of a reorganization or
consolidation of operations, introduction of new methods, etc., an
employee’s position increases in scope and responsibility sufficient to
warrant placement in a higher classification group or salary level
07/20/21 M.T.Macalinao,SLSU-TNU 57
JOB EVALUATION
• It is the process of determining the worth of one job in relation
to that of the other jobs in the company so that a fair and
equitable wage and salary system can be established. Its main
objective is to determine the relative positions or levels of the
job in the company.
• The principle behind is that jobs should be paid in accordance
with difficulty and importance of the job – the more difficult and
important jobs being rated higher than the less difficult ones.
• Job evaluation is the answer to the critical problem of pay
inequities. This involves the task of determining the relative
values or worth of jobs and of paying the workers according to
the level of the difficulties and responsibilities of the jobs they
do.
07/20/21 M.T.Macalinao,SLSU-TNU 58
JOB EVALUATION
Purpose of job evaluation is to consider these
questions:
1. How would you determine whether a filing clerk should be paid more or less
than a typist? Làm sao để quyết định được là liệu nhân viên lưu giữ hồ sơ / văn
thư nên được trả cao hơn hay thấp hơn nhân viên đánh máy ?
2. Should this decision be made on the basis of the physical appearance and
particular ability of the employees who now occupy the position? Quyết định này
có nên được đưa ra bởi ngoại hình và năng lực cụ thể của các nhân viên hiện
đang đảm nhận vị trí đó kh?
3. Should seniority or individual performance serve as basis? Thâm niên hay hiệu
suất cá nhân có nên đc xem như là cơ sở?
4. Should rates prevailing in the community for these particular types of jobs be
considered? Có nên xem xét đến mức lương hiện tại trong cộng đồng của từng
loại cvc cụ thể kh?
5. Should the complexity of each job in terms of the duties and responsibilities
inherent in it and the qualifications required be the basis? Sự phức tạp của mỗi
cvc về mặt nhiệm vụ, trách nhiệm vốn có và trình độ chuyên môn/ yêu cầu bằng
cấp có nên được xem như một cơ sở kh?
07/20/21 M.T.Macalinao,SLSU-TNU 59
Factors in Determining Job Values
Job evaluation is a means of determining the relative values of
jobs the following are the more commonly used :
07/20/21 M.T.Macalinao,SLSU-TNU 60
Factors in Determining Job Values
07/20/21 M.T.Macalinao,SLSU-TNU 61
BASIC PRINCIPLES IN JOB EVALUATION
07/20/21 M.T.Macalinao,SLSU-TNU 62
BASIC PRINCIPLES IN JOB EVALUATION
3.The pay must be related to existing community pay scales.
This principle means paying the wage which other
employers in the community pay for similar work. This
prevents unfair competition for employee skills which
results in the costly “pirating” of employees. It reduces
turnover due to inferior pay rates and permits competition
on a equal basis.
4. The employee is concerned with the general wage level
and the relative position of his pay. Even if an employee is
highly paid compared to workers doing similar jobs
elsewhere in the locality, he will not be happy if he feels that
his ability is being wasted on a job not suited to him. Nor will
he be happy to continue in his job if he man beside him is
paid more for work that is not more difficult than his.
07/20/21 M.T.Macalinao,SLSU-TNU 63
JOB EVALUATION METHODS
Several methods of evaluating have been evolved in an effort to establish a
satisfactory system of pricing jobs so that each worker gets the pay
commensurate with the duties and responsibilities of the work he performs.
1. Non-Quantitative Methods
a. The Ranking Method
b. The Position Classification or Grade Description Method
2. Quantitative Methods
a. The Point System
b. The Factor Comparison System
c. The Hay Method
d. The Paterson Method
07/20/21 M.T.Macalinao,SLSU-TNU 64
JOB EVALUATION METHODS
1.a THE RANKING METHOD
07/20/21 M.T.Macalinao,SLSU-TNU 65
JOB EVALUATION METHODS
1.a THE RANKING METHOD
• Procedure
07/20/21 M.T.Macalinao,SLSU-TNU 66
JOB EVALUATION METHODS
1.a THE RANKING METHOD
Procedure
2. Since the jobs are compared as a whole, the jobs to be evaluated
in a department or firm are arranged in some order, either from
the simplest to the most complex or vice versa. This ranking is
done through a mental valuation of the job as a whole. Raters are
asked to consider in a general way certain requirements of the
job, such as education, experience, skill, responsibilities, and
effort, and working conditions. Jobs are thus classified according
to rank from the most important to the least important.
3. This work is preceded by a careful job analysis and the writing of
accurate job descriptions. The ranking of jobs may be done by an
individual, by several individuals, or by a committee.
07/20/21 M.T.Macalinao,SLSU-TNU 67
JOB EVALUATION METHODS
Procedure
This method requires the preparation of guides in classifying
the jobs:
1.A well-prepared job description and job specification which shows
the duties, responsibilities, and working conditions relative to each
job.
07/20/21 M.T.Macalinao,SLSU-TNU 68
JOB EVALUATION METHODS
1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
07/20/21 M.T.Macalinao,SLSU-TNU 69
JOB EVALUATION METHODS
1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
(GUIDE TO CLASSIFICATION OF POSITIONS)
This class includes positions which may be under the immediate or general supervision of a
higher grade employee, depending on the character of the work performed. More jobs and
variety of work are generally present in this class. Incumbents of this class level of positions
are required to have some knowledge of the work performed, by way of a little experience and
Grade 2 training along the particular line of work assigned. The educational background required in
this class should be at least two years of high school or its equivalent. This is the lowest class
in the clerical positions. Characteristic of this level is semi-skill in general, semi-mechanical
repair work, and maintenance of simple machines and equipment or the operation of office
appliances.
07/20/21 M.T.Macalinao,SLSU-TNU 70
1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
(GUIDE TO CLASSIFICATION OF POSITIONS)
07/20/21 M.T.Macalinao,SLSU-TNU 71
1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
(GUIDE TO CLASSIFICATION OF POSITIONS)
07/20/21 M.T.Macalinao,SLSU-TNU 72
1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
(GUIDE TO CLASSIFICATION OF POSITIONS)
07/20/21 M.T.Macalinao,SLSU-TNU 73
1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
(GUIDE TO CLASSIFICATION OF POSITIONS)
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1.b POSITION CLASSIFICATION OF GRADE DESCRIPTION METHOD
(GUIDE TO CLASSIFICATION OF POSITIONS)
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JOB EVALUATION METHODS
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JOB EVALUATION METHODS
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2.b The Factor-Comparison Method
• This method was developed out of knowledge of the strengths
and weaknesses of the other methods already described. This
method requires that each job be compared and ranked with the
other jobs under each separate factor. Since the evaluation is
done on a factor-by-factor basis.
• The first step to use this method is to select an evaluation
committee composed of senior executives with the personnel
manager as coordinator, assisted by a management consultant
who is to evaluate the jobs. The committee should be furnished
with an analysis of the job and written job descriptions and
specifications of the jobs to be evaluated. The factors upon which
jobs should be compared are then selected and carefully defined.
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2.b The Factor-Comparison Method
• The factors are subdivided into degrees like they are in the Point-Rating
Method. On the basis of these factors, several key jobs, usually twenty
to thirty, are chosen. The most striking trait of the factor-comparison
method is its reliance on “key jobs” as the “reference points” or
“anchor points” for all the other jobs. A key job is one generally
accepted by employees and managers as being a standard type of job,
correctly priced, and representative of major factors in most jobs in the
organization.
• The ranking of jobs is established by analyzing the description and
specification of each job and then comparing the factors present in the
job against the factors in the key jobs, one factor at a time, and then
arranging the jobs from the highest to the lowest or the other way
around, as the evaluators may choose. Since the evaluation is done by
pooling the judgments of a group of trained persons, it is claimed to be
more accurate than other methods.
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2.c The Hay-Method
• Hay and Associates, a consulting firm, has developed a type of
factor-comparison method, using three factors: know-how,
problem-solving, and accountability.
• This method requires that the organization develop its own key
jobs, called benchmark, selected from among the positions within
the company. The factors and the quantitative weights must be
established by the organization. It works similar to the point
system. The evaluator makes specific comparative identification
of the weights assigned for each factor so that it tells which job is
worth more and how much more. The factor values are then
converted to monetary wages. Briefly, the Hay method includes
the following stages:
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2.c The Hay-Method
1. Benchmark Selection
The selection of a representative cross section of
positions .
2. Position Analysis
Position descriptions are written for each of these
benchmark positions based on information
gathered by interviewing the current incumbents in
the job.
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2.c The Hay-Method (continuation)
3. Position Evaluation
Each position is evaluated against measurements contained in a set of
guide charts developed by Hay. A committee of top level executives
performs the evaluation and assigns the forms the evaluation and
assigns the point values which reflect the position’s importance to the
Company. The categories for evaluation are restricted to the following
factors:
a. Degree of Know-how. The sum total of every kind of skill.
b. Degree of Problem-Solving. The original, self-starting thinking
required by the job for analyzing, creating, reasoning, arriving at and
making conclusions.
c. Degree of Accountability. The answerability for action, and for the
consequences thereof. It is the impact of the job on the end
results. The factor, working condition is sometimes used for jobs whose
hazards, environment or physical demands are deemed important.
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2.c The Hay-Method (continuation)
4. Compensation Survey
• Current salary practices are explained internally to be sure
employees are being paid fairly for the impact they make on the
company’s performance. In addition, the company’s salary
structure is compared with those of companies similarly situated
in the same industry, as well as with a sample of comparison on a
multi-industry basis in order to establish external
competitiveness.
5. Policies and Procedure
Finally, specific policies and procedures are developed to allow
for performance growth for individuals, to ensure equitable and
effective administration of salaries and to maintain internal
equity.
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2.d The Paterson Method
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2.d The Paterson Method (continuation)
• It is a method of analyzing jobs according to the kinds of decisions
made, and assessing them, according to the universal pattern and
the amount of the total payroll available. It postulates that “jobs
have one thing in common: they all require decisions to be made”
hence; they can be compared on the basis of the kinds and
numbers of decisions. Six kinds of decisions called “Bands” are
distinguished.
• Two grades each are assigned for each band, excepting Band O
correspondingly assigned grade 0, while Band E has grades 9 and
10. Decisions which are progressively more difficult and
progressively more important for firm survival and growth and
are rewarded accordingly.
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2.d The Paterson Method
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2.d The Paterson Method (continuation)
Steps in following the Paterson Method:
1. The analyst goes around the departments to find out the structure of
operations
2. A job sampling is derived.
3. The job incumbent is sent a Job Sheet Form which identifies: the job title,
immediate superior, immediate juniors and tasks carried out (in numerical
order).
4. The interview. Starting with the first task, the analyst asks the incumbent to
describe in chronological order precisely what he does. He then asks
questions related to: frequency of decision making, complexity and specialist
difficulty. Personal notes are taken and summarized in the Task Analysis
Form.
• Job grading is done by a grading committee whose members are chosen
because of their “sapiental authority” alone, their knowledge of methods of
job grading and of the jobs being graded.
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FIGURE 1. Task Analysis Form Sample for Chief Invoice Clerk
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