JOB EVALUATION & SALARY STRUCTURE

DESIGN

Seminar Speaker & Facilitator: RAFAEL Z. PERFECTO, F.P.M.

EFFECTIVE SALARY ADMINISTRATION

Internal Job Value -Job Evaluation

External Job Value -Salary Survey/Design

Pay for Performance -Performance Appraisal

OBJECTIVES OF JOB EVALUATION

To Measure the value of jobs within the company

To attract and retain highly-motivated and well- qualified employees

JOB EVALUATION

A systematic process of measuring the relative value of jobs within the organization for the purpose of administering compensation in a

rational way.

PERFORMANCE APPRAISAL

An objective process of measuring the performance (quantity & quality of output) of an

employee for the purpose of motivation, performance improvement, and reward.

JOB ANALYSISJOB ANALYSIS

Methods of Job Analysis (Interview, Methods of Job Analysis (Interview, Questionnaire, Observation)Questionnaire, Observation)

Sources of Job Information (Primary, Sources of Job Information (Primary, Secondary)Secondary)

Job Data Analysis (What, How, Job Data Analysis (What, How, Where, How often)Where, How often)

JOB DESCRIPTIONSJOB DESCRIPTIONS

What is a job description?What is a job description?

Uses of Job DescriptionsUses of Job Descriptions

Steps in developing job descriptionsSteps in developing job descriptions

Steps in Developing Job Steps in Developing Job DescriptionsDescriptions

Conduct job analysisConduct job analysis Identify position title and reporting Identify position title and reporting

relationships based on Organization relationships based on Organization ChartChart

Define job objectivesDefine job objectives List down duties and responsibilitiesList down duties and responsibilities List down minimum and preferred List down minimum and preferred

qualifications of the jobqualifications of the job Submit job description for approvalSubmit job description for approval

Job Description FormatJob Description Format

Position Title:Position Title: Department/Section/Unit:Department/Section/Unit: Reports to:Reports to: Supervises:Supervises: Job Summary:Job Summary: Duties & Responsibilities:Duties & Responsibilities: Job Specifications: (qualification Job Specifications: (qualification

requirements)requirements)

WORDS TO AVOIDWORDS TO AVOID

PerformsPerforms EnsuresEnsures AssistsAssists CoordinatesCoordinates PreparesPrepares LiaisesLiaises MonitorsMonitors EntertainsEntertains

WORDS TO AVOIDWORDS TO AVOID

ImplementsImplements FacilitatesFacilitates MaintainsMaintains

ENSURING FAIRNESS & OBJECTIVITY IN THE RATING PROCESS

• Select Job Factors that are important to your company

• Identify credible members for your Job Evaluation Committee

• Consider using the Point Rating System

• A third party or consultant can improve the credibility of the program

ENSURING FAIRNESS & OBJECTIVITY IN THE RATING PROCESS

• Select Job Factors that are important to your company

• Appoint a Job Evaluation Committee

• Use a third party or consultant

• Use the Point Rating System

JOB FACTORS

Relevant work experience

Education

Accountability

Human Relations Skill

Analysis & Decision Making

Working conditions (Hazards & Physical demands)

Supervision

JOB RATING PLAN

The measuring device used to rate jobs. It defines the individual job factors and their

corresponding degrees.

Note:

Each factor is assigned percentage weights depending on which factors management wishes to give greater weight or importance.

JOB EVALUATION COMMITTEE

A group of five (5) to nine (9) managers of the company, representing the different

departments/divisions, who will be responsible for rating the different jobs.

FUNCTIONS:

1. Establishing and recommending the job rating plan

2. Job clarification

3. Discussion & deliberation

4. Objective rating

WAGE DISTORTIONWAGE DISTORTION

““A situation where an increase in the A situation where an increase in the prescribed wage rates results in the elimination prescribed wage rates results in the elimination or severe contraction of intentional quantitative or severe contraction of intentional quantitative differences in wage or salary between and differences in wage or salary between and among employee groups in an establishment among employee groups in an establishment as to effectively obliterate the distinctions as to effectively obliterate the distinctions embodied in such wage structure based on embodied in such wage structure based on skills, length of service, or other logical bases skills, length of service, or other logical bases of differentiation”of differentiation”

SALARY MARKET DATASALARY MARKET DATA

Rationale for conducting salary surveysRationale for conducting salary surveys

Selecting companies to be surveyed:Selecting companies to be surveyed:- GeographyGeography- IndustryIndustry- SizeSize- CombinationCombination- Competition (for good people) Competition (for good people)

Sources of Salary DataSources of Salary Data

Own SurveyOwn Survey Joint Survey (groups or associations)Joint Survey (groups or associations) ““Off-the-shelf” or third party Off-the-shelf” or third party

surveyssurveys Customized third party surveysCustomized third party surveys

SALARY STRUCTURE DESIGN

• Conduct or participate in a salary survey.

• Depending on company philosophy or direction, the structure is based on the survey average, median, or higher survey results.

• Each job grade is assigned a Salary Range

• A salary structure is composed of several salary ranges.

• Each salary range has a minimum rate, a mid-point rate, and a maximum rate.

Analyzing Market DataAnalyzing Market Data

Analyze your company data versus Analyze your company data versus survey average or mediansurvey average or median

Indicate variances in percentageIndicate variances in percentage Draw a Salary Survey Chart showing:Draw a Salary Survey Chart showing:- Survey LowSurvey Low- Survey HighSurvey High- Survey MedianSurvey Median- Survey AverageSurvey Average- Your Company Actual AverageYour Company Actual Average

Basic Rules in Designing a Basic Rules in Designing a Salary StructureSalary Structure

Compute the Hiring Rate of Job Grade One. Compute the Hiring Rate of Job Grade One. (Should not be lower than prevailing minimum (Should not be lower than prevailing minimum wage law)wage law)

Decide on the Salary Range Spread of 50% or Decide on the Salary Range Spread of 50% or 60%. (Multiply Hiring Rate x 1.5 for 50% or 1.6 60%. (Multiply Hiring Rate x 1.5 for 50% or 1.6 for 60% to get Max Rate)for 60% to get Max Rate)

Compute Mid-Point Rate for JG-1 by adding Compute Mid-Point Rate for JG-1 by adding Hiring Rate & Maximum Rate divided by 2.Hiring Rate & Maximum Rate divided by 2.

Basic Rules in Designing a Basic Rules in Designing a Salary StructureSalary Structure

Closely observe the variances between your Closely observe the variances between your actual average and survey average per job actual average and survey average per job grade, from the lowest to the highest job grade.grade, from the lowest to the highest job grade.

% Interval between job grades should be the % Interval between job grades should be the same or higher (never lower).same or higher (never lower).

Decide appropriate % interval to bring your Decide appropriate % interval to bring your proposed Mid-Point Rate close to the market proposed Mid-Point Rate close to the market average.average.

TYPES OF SALARY TYPES OF SALARY INCREASESINCREASES

Merit Increase (based on performance)Merit Increase (based on performance)

Promotion IncreasePromotion Increase

Skill or Competency IncreaseSkill or Competency Increase

Salary Adjustment: JE implementation, JE Salary Adjustment: JE implementation, JE reclassificationreclassification

General Increase or “across-the-board”General Increase or “across-the-board”

FOR YOUR TRAINING NEEDS.

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