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Human Resources Management

Job Evaluation and Compensation Management in Tata Steel

Amitabh Anand 4C

Gautam Babbar 12C

Gyan Bhaskar Maithani 13C

Kshitij Aggarwal 18C

Neha Mishra 25C

Samik Goshal 38C

Shraddha Jha 45C

Utkarsh Modi 52C



HR Job Evaluation Process

J o b A n a l y s i s

Study of the jobs in the

organization.To gatherinformationon jobcontent andworkerrequirements

Information isrecorded inthe precise,consistentlanguage of a

jobdescription

C o m p e n s a b l e

F a c t o r s

Choosingcompensable

factors is theheart of jobevaluation

Factors thatplace definerelative jobhierarchy

Serve to

informincumbentswhichcontributionsare rewarded

D e v e l o p i n g t h e

M e t h o d

The methodshould permit

consistentplacement oftheorganization's jobscontainingmore of thefactorshigher in the

job hierarchy

J o b S t r u c t u r e

Comparing jobs to

develop a jobstructure

Choosingandassigningdecisionmakers,reaching andrecordingdecisions,and settingup the jobhierarchy

W a g e S t r u c t u r e

Pricing the job structure

to arrive at awagestructure

Strictlyspeaking,this step isnot part of

jobevaluation



Job Evaluation Methods

Methods RankingClassifica

tionPoint Plan

Factor

Comparis

on

Dimensio

ns

QualitativeQualitativ

e

Quantitati

ve

Quantitati

ve

Job-to-JobJob-to-

Standard

Job-to-

Standard

Job-to-

Job

Total Job Total Job

Separate

Factors

Comparison

Separate

Factors

Comparison



Critical Factors in Job Evaluation



Choosing Compensable Factors

1. Must be present in all jobs.

2. Need to be definable and

measurable.

3. The factor must vary in degree.

4. No overlap in meaning.

5. Employer, employee, and unionviewpoints should be reflected in

the factors

6. Must be observable in the jobs

7. Need to fit the organization

Compensation Management



Job Evaluation1. MD and full time Directors

reviewed by the RemunerationCommittee of the Board

2. Annual Variable Pay linked tothe performance of theCompany in general and theirindividual performance for therelevant year measured againstspecific Key Result Areas

3. Remuneration Policy of theCompany, details of

remuneration, resolution ofconflicts, Whistle Blower Policyavailable in public domain in theAnnual Public Reports

4. Assured access to the EthicsCounsellor/ Chairman of theAudit Committee

Aims of Tata Steel'sPerformanceManagement System 1. Synchronise

workforce andCompanyactivities,behaviour, valuesand objectives

2. comprehensivelyassessperformance and

groom3. Develop corporate

culture4. Enhance line

managementrelationships

Performance AppraisalAssesses performance againstpreviously agreed work objectivesAnnual exercise to assess keyresult areas of their employees,workers and supervisorsJoint responsibility; everyindividual in TISCO are co-primeto each otherCompare performance andpotential between employeesand subordinates of the same

rankPerformance-based Rating - VeryGood, Average, and Average toMedium and Below AverageHighest reward of the year givento best suitable worker.Better performers the majority ofavailable merit pay increases,bonuses, and promotions

A Look at Job Evaluation and

Compensation Management at Tata

Steel



EVA Compensation

• Management technique developed by the Stern Stewart & Company consultant group

• EVA emphasizes the residual wealth creation in a company after all costs and expenses have been

charged including the firm's cost of capital invested

• EVA = NOPAT – (D + EBV) · (WACC)

Advanatges:

• It helps in reducing agency conflict and improve decision making

• It is more strongly associated with stock return than other measures

• It improves stock performance

• It adds more informational content in explaining stock returns

Compensation:

•

Setting performance standards for management incentive compensation plans• EVA incentive compensations are based not only on the year increase in EVA, but on the increase that is

above expected EVA improvement

• Motivate managers to make decisions that will create superior performances



Compensation

Employee Department EnterpriseValue

Addition

ValueAddition

60%

50%

40%

40%

50%

60%

Top Level

BottomLevel

FixedPerforman

ce

Management

Union

Compensation throughcollective bargaining

process

CompensationHierarchy

E.V.A.

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