Copyright
Leo Charles Pigage.

Job evaluation (Volume BEBR Faculty Working Paper v.5, no.3) online

. (page 1 of 4)
Online LibraryLeo Charles PigageJob evaluation (Volume BEBR Faculty Working Paper v.5, no.3) → online text (page 1 of 4)
Font size
QR-code for this ebook


"LI B R.ARY

OF THE
U N 1 VERS ITY
Of ILLINOIS

331.1
v\o. \- 2,5



V.53






m4 ' :
















Institute of Labor and Industrial Relations



N I V E S I T Y OF




I N O I S



M\



Editorial Note

This University of Illinois Bulletin is one of three to be published by
the Institute of Labor and Industrial Relations on Industrial Engineering
topics. The topics are Job Evaluation, Motion and Time Study, and
Wage Incentives. These Bulletins are not intended to "promote" the
use of these techniques, but to aid managements and unions which have
decided to adopt them.

The Institute of Labor and Industrial Relations was established at the
University of Illinois in 1946 to "inquire faithfully, honestly, and im-
partially into labor-management problems of all types, and secure the
facts which will lay the foundation for future progress in the whole field
of labor relations."

The Bulletin series is designed to carry out these aims by presenting
information and ideas on subjects of interest to persons active in the field
of labor-management relations. These Bulletins are nontechnical, for
general and popular use.

Additional copies of this Bulletin and others listed on the inside
back cover are available for distribution.

Milton Berber
Acting Director

Donald E. Hoyt

Editor



I.L.I.R. Publications, Bulletin Series, Vol. 5, No. 3



UNIVERSITY OF ILLINOIS BULLETIN

Volume 49, Number 36; January, 1952. Published seven times each month by the University of
Illinois. Entered as second-class matter December 11, 1912, at the post office at Urbana, Illinois,
under the Act of August 24, 1912. Office of Publication, 358 Administration Building, Urbana,
Illinois.



JOB EVALUATION



by
L. C. PIGAGE,

Associate Professor

of Mechanical Engineering in Labor and

Industrial Relations and Extension

and
J. L TUCKER,

Former Instructor

of Mechanical Engineering in Labor and

Industrial Relations and Extension



33/-/



•o



u- 5



w 3



Table of Contents



INTRODUCTION



JOB EVALUATION



JOB EVALUATION HISTORY 13



BASIC METHODS IN USE

page 13



The Ranking Method 14

The Classification Method 14

The Factor Comparison Method 15

The Point System 16



ESSENTIALS OF A JOB
EVALUATION SYSTEM

page 19



EstabHshing Policies 20

Selecting the Plan 20

Choosing the Factors 21

Determining Degrees and Points 22

Job Description 24

The Actual Job-Evaluation Process . . 26

Wage Survey 27

Wage Curve 30

Labor Grades 32



CROSS-CHECKING THE
EVALUATION PROGRAM

page 36



Effectiveness of Each Factor 36

Validity of Each Factor 37

Validity of Factors in Respect to

Each Other 38

Continued Validity of the Plan 40



INSTALLATION AND MAINTENANCE OF PLAN 40



CONCLUSION 41



SELECTED BIBLIOGRAPHY 42



INTRODUCTION

"Ten cents an hour more than me. And he's just a janitor. Here I
am a laborer, getting the heavy work all day, while he just pushes a
broom. I want a raise!"

An age-old argument, and an age-old puzzle. Which jobs are the most
important? Which are worth more pay? And, how much more?

The puzzle gets tougher if wage rates are assigned haphazardly, as-
signed without regard to job contents and to other jobs.

One method designed to help solve this puzzle is job evaluation. Job
evaluation is a systematic procedure to help determine, through a study
of job content, the relative worth and pay of jobs and positions within
a plant.

Many other factors — social, economic, and psychological — are also
involved in labor-management relations and must be considered. But
these other factors are beyond the scope of this Bulletin. Only job evalua-
tion techniques will be considered here, for this Bulletin is not directed
to the expert. Rather it is aimed at the person in the labor-management
relations field who is not directly dealing with industrial engineering, but
who wants to know some of the methods and procedures in use.

JOB EVALUATION

Job evaluation has brought some order out of the haphazard assign-
ing of prevailing wage rates. However, it is still not foolproof. Much
still needs to be done in the over-all understanding of the economic and
social aspects of job evaluation; more must be learned about the socio-
logical and psychological influences on workers; more must be learned
about men's reactions to changes in traditional money rates.

As yet, there is only one real criterion for a good job evaluation plan:
continued acceptance by both management and labor.

Although job evaluation shows the relative worth of jobs, it is only
one of several elements which determine how much money the worker
will be paid. Some other elements also influencing this relative total wage
rate include the general economic conditions of the country or the in-
dustry, the competitive advantage of the plant, cost of living, relation
of wage costs to other cost items, and individual or collective bargaining.

Job evaluation does not replace individual or collective bargaining.
Instead, it makes — or can make — the bargaining process more sys-
tematic and orderly. It does this by establishing a uniform measuring
scale for all jobs. This measuring scale may provide single rates or rate
ranges for the various ultimate labor grades used.

In the determination of total hourly rates, job evaluation is concerned



CHART I



Name of Job


Labor Grade


Wage Rate


Janitor

Lathe operator

Toolmaker


1
4

6


.95-1.05
1.25-1.45

1.40-1.60


Note: Illustrative only, many more cases would be
present in any one plant.

These money rates do not necessarily reflect
the present economic conditions.



only with measuring one job in relation to other jobs and thus establishing
the relative base rates. Other industrial relations and management engi-
neering techniques, such as motion study, time study, and the use of wage
incentive plans, may be, but are not necessarily, used with job evaluation.

If the parties do decide to use one or more of these techniques with
job evaluation, they should be sure that the techniques are interrelated.
To clearly understand the part that job evaluation plays in influencing
the total wage rate, look at the cases of Phil and Harry:

Phil works eight hours a day, 40 hours a week. He gets paid a
straight hourly rate, regardless of how much production he turns out.
He's been doing the job for a long time. His job is not on incentive.

Of course, Phil has to do a certain amount of work to keep his job.
But, there is no time standard set for the work. Phil's foreman has an
idea about a reasonable day's work. Phil does it. And, because of his
seniority and merit, Phil makes a little more money per hour than some
of the other fellows doing similar work.

Phil's pay check can be worked out by a formula:

Total earnings = (actual hours on the job) X (basic hourly money
rate for the job + extra money per hour because
of specific person doing the work) .











FIGURE I










2.00














y Merit or
Seniority
(or both)


(2 1.00












/Base rote


3






















O

X












Ip


2


3


4


5.


6


:,M


1

iii Labor Grc






O

'E
o






o.
o




I-

o

E
o









To get a picture of this on a plant-wide scale — a comparison of non-
incentive jobs of similar and dissimilar nature — see Chart I and Figure I.

Harry' works in another part of the plant. He works on an incentive —
a bonus, or piecework — job. Harry has a certain amount of work he has
to turn out every day, a quota. He gets paid an hourly rate, just like
Phil, for being on the job eight hours — for meeting the quota. This
quota may be expressed in many ways, such as: (1) minutes per piece,
(2) hours per piece, (3) pieces per hour, or (4) money per piece.

Harry has been doing his job a long time. Thus, like Phil, he has a
higher base rate per hour than some of the other fellows doing similar
work. But, unlike Phil, he can earn extra money by producing more than
his quota.

Harry's pay check can also be worked out by a formula. The first
part of the formula will be just like Phil's:

Total guaranteed earnings = (Actual hours on the job) X (basic

hourly money rate for the job + extra
money per hour because of the specific
person doing the work).

But — in finding Harry's total earnings — to this is added the incen-
tive earnings. Thus the formula becomes :



CHART n



Nanne of Job


Labor
Grade


Base Pay


Incentive Pay
(average)


Total Pay


Janitor


i


.95-1.05


Non-incentive


.95-1.05


Lathe operator


4


1.25-1.45


.31


1.56-1.81


Toolmaker


6


1.40-1.60


.35


1.75-2.00


Note: Illustrative only, many nnore coses would be present


in any one plant.


These nnoney rates do not necessarily reflect the


present economic conditions.



Total earnings = (total guaranteed earnings) + (time allowed — time
actually taken on the job) X (basic hourly money
rate for the job + extra money per hour because of
the specific person doing the work) X (some per-
centage) .

Comparison of the earnings of a person on an incentive job with those
of persons on similar or dissimilar incentive jobs is shown in Chart II and
Figure II.

A comparison of Figure I and Figure II shows that there has been a
"stacking" of a money rate upon a money rate. In each case — Phil's and
Harry's ■ — the base rate for the job influences the total earnings very
much.

In everyday practice, the stacking method is determined by the rela-
tive soundness of a particular organization's program of job evaluation,
motion study, time study, and the use of a wage incentive plan and, where
there is an established union, by the processes of collective bargaining.
However, the whole relationship between incentives, job evaluation and
production standards should be explored. This is especially so as the
total rate tends to destroy, among other things, the historic differentials
between jobs, and this destruction can have a profound effect on the
results.

Chart III and Figure III show the relative area covered by job evalu-
ation in determining the total hourly rate. (This particular illustration



10



FIGURE H




Merit or
Seniority
(or both)



Base rate



5 4 9 6 7 8 Labor Grades



CHART n



Nome of Job



Labor
Grade



Base Pay



Incentive Pay
(average)



Total Pay



Janitor

Lathe operator
Toolmaker



4
6



.95-1.05
1.25-1.45
1.40-1.60



Non-incentive
.31 -.35
.35-40



.95-1.05
1.56-1. 81
1.75-2.00



Job Evaluation



Motion a Time Study
a Wage Plan



Merit Rating or Seniority

Note: Solid bracket shows primary influence, dotted bracket secon-
dary influence. These rates do not necessarily represent
present economic conditions



uses rate ranges. Single rates could just as well be used.) They also show
the areas covered by these other industrial and management engineering
techniques.



11



LIBRARY

UNIVERSITY OF ILLINOIS









■5






^


£1






o.


O






>










d>




•»






c




>*






o

E


^


O






o




"c






k.




0>






X




en






Q>




*>














+


'w




(0


JQ


<U




C"








^M


k.







O




k-


••-




o

0)


Q>

■5














"O.


k.




c




fl)'


>




o




(D


a>




if—






c




o




c


o




T




o


E




^^


y




_>


^


>


R


3


k.




LU


UJ


o


3
O




XI


cn




x:




o


z>




a>




->


o




o










u.




^








X






S*






o












c






o













>



in



o
o



SI

o



0)






)b-




^




c
o




o


E






>




3


k.


^


o


3




>


O




UJ
SI


a>




o


CO




-D



o



o

3

t3
o

a>

E

I
■o

Q>

o



o

(U

E



3

E



c
o

c
o



c
a>
o

Q.

E
o



3
O

a>
a.

>^
<v

c
o



X



a

Q.

o



o
x>

k.

o



g

'c
a>
(f)



^



w

c



o

LiJ



o
o



12



JOB EVALUATION HISTORY

Job evaluation is not new. As early as 1871 the United States Civil
Service Commission adopted a rough form of evaluation which consisted
largely of merely classifying jobs. A more modern type of job analysis was
started in 1909 in Chicago for the Civil Service Commission and the
Commonwealth Edison Company.

But, it was not until about 1924 that a comprehensive, present-day
type, evaluation system was first tried. Merrill R. Lott, a director of per-
sonnel in several companies, developed it. Since his work, there have been
great fluctuations in types — but few basic changes. Perhaps the greatest
increase in the development and use of job evaluation plans has been
since 1940 — especially during and since the wage stabilization period of
World War II.

There has been a very uneven adoption of job evaluation programs.
Even within any one industry, a uniform acceptance cannot be seen,
except perhaps in the most recent attempt in the basic steel industry.

Much of this uneven development is explained by lack of interest on
the part of management and by the opposition of unions in some plants
and industries. The lack of management interest usually is the result of
a feeling that the existing wage rate structure is adequate or that the cost
of installing a job evaluation program (in terms of both money and
worker adjustments) would not be justified by the results. Union opposi-
tion has been based on several different grounds. Some union repre-
sentatives have a long-standing fear that job evaluation would lead to
wage rate cutting. Others have reacted against the more extreme claims
of job evaluation enthusiasts that job evaluation automatically eliminates
wage inequities and the need for bargaining over individual wage rates.
Still others believe that wage structures must be flexible and adaptable to
human relations considerations and that the bargaining approach is much
more realistic than a set of mathematical formulas. A more detailed dis-
cussion of the reasons for various management and union points of view
may be found in some of the references listed in the selected bibliography
at the end of this Bulletin.

A considerable change in these attitudes held by some union and
management people has been evident in recent years. Much of this change
can be attributed to governmental wage stabilization policies during the
war period. Whether the trend will continue in normal times is a specu-
lative question.

BASIC METHODS IN USE

Lott used fifteen "factors" in his evaluation of a job. Today, some
persons favor as few as three factors. Others use as many as forty.

13



To date, little basic research has been done to determine how many
or which factors should be used. Instead, most plans now in use have been
adopted completely or with minor changes frorn plans successfully tried
elsewhere.

There are four basic methods of job evaluation now in use. These are
of two types ■ — non-quantitative and quantitative. They are :

Non-quantitative

a. Ranking method

b. Classification method
Quantitative

a. Factor Comparison method

b. Point system

Each succeeding method has more "refinements" than the preceding
one. The use of these additional refinements does not necessarily make
the method more nearly accurate. In fact, a limited amount of research
has shown that additional refinements may actually weaken the results.

The Ranking Method

This, the simplest method of job evaluation, usually involves either of
two processes:

(1) Ranking by job title only. The title of each job is placed on a
card of convenient size. The cards are then stacked according to the
relative importance of the jobs ■ — ■ accepted by common agreement. The
card naming the most important job is on top, the least important on
the bottom, the rest properly arranged between. A money rate, based on
whatever data may be available, is then assigned to each job according
to the relative position of its job-title card in the stack.

(2) Ranking by job title and job content. Here, the job content is
used to assist in judging the relative importance of the jobs. Otherwise,
the method is the same as that described above.

The ranking method has the advantage of simplicity, the disadvantage
of lacking substantiating data for use later in justifying the relative posi-
tion given certain jobs. Furthermore, if only job titles are used some
aspects of the jobs may be overlooked.

The Classification Method

The classification method is used widely in many offices, especially in
Civil Service. It is relatively simple. It involves only matching a specific
job with a list of tasks in a predetermined labor grade. Each grade has a
set money rate. The method works like this:

( 1 ) Establish labor grades — as many as desired.



14



(2) Describe the types of functions included in each grade.

(3) Assign money rates to each grade.

(4) Describe each specific job.

(5) Match work description with most closely corresponding labor-
grade work type description.

Once this has been done, the labor grade is known, and so is the
money rate for the work.

There are two main faults in this system. Assigning of money rates is
greatly influenced by the present rate; thus inequities in pay are often
continued. The second fault is in interpretation of the wording used in
the job and work type descriptions. They are easily misinterpreted. This
is found especially when a firm is trying to attract personnel. In such a
case, the work might be matched with an unusually high labor grade and
corresponding high money rate. The main advantage of the system is
simplicity.

The Factor Comparison Method

This method is based on the assumption that all jobs contain certain
common factors. These factors may differ in the degree to which they are
present in different jobs. The factors usually are (1) skill, (2) mental
demands, (3) physical demands, (4) responsibility, and (5) working
conditions.

This method of job evaluation actually involves two rankings: ranking
jobs by factors without regard to money, and ranking jobs by assigning to
each factor a part of the total money rate. The two are compared and
any differences are discussed and eliminated.

First step in the system is to clearly describe each factor in each job
being evaluated. Key jobs are then selected. A key job is one which
management and union agree is properly paid. It is one considered fairly
common in the area and which has a money rate also common and uni-
form in the area. Enough key jobs are selected to cover the entire range
of jobs included in the plan — from nearly the lowest to the highest
types of work, with several other jobs scattered between.

The key jobs are then ranked — ■ without regard to money — first for
one factor, then for the next factor, and so on. All jobs can then be com-
pared for each factor at a time.

Then the second ranking is done. The total money rate for each key
job is broken down, a "proper" portion being assigned to each factor.
These portions of money assignments will also rank the jobs in respect to
one another for each factor. Differences in the two rankings are then
worked out.



15



Now a basic scale of key jobs has been formed against which all other
jobs, without consideration of their present money rate, can be ranked,
factor by factor. New money rates can now be determined by using as a
guide the partial money rates assigned each job in each factor.

This method is basically the same as the ranking method already
described. The main difference is that each factor of each job is ranked
twice, instead of each job being ranked as a whole.

The method has the same inherent weakness as the ranking method —
lack of substantiating data. Furthermore, economic changes may not have
the same efTect on all aspects of all factors of a job; hence the whole
procedure should be repeated with each economic change. Most difficult
is the problem of securing sound key jobs.

In some cases, to avoid the need for re-evaluation as the economic
situation changes, the second ranking by partial money rates is omitted,
or is done in terms of points.

The main advantage of this method is the absence of predetermined
limits such as are usually set in the classification and point system methods.

The Point System

Basically there are two types of point systems : ( 1 ) the straight point
system and (2) the weighted point system.

Like the factor comparison system, the point system operates on the
assumption that there are factors common to all jobs. In this system a
certain number of points are assigned each job on the basis of these
factors. To date, the number of factors used varies from three to as many
as forty. The most popular number of factors is between ten and fifteen.

In each case the factor should be clearly and adequately described.
Then, since each factor will not be of the same importance in every job,
each factor is broken down into degrees. Each degree is then described
clearly and adequately. The number of degrees used is somewhat a
matter of choice; usually it is between five and eight.

For example, a factor such as education might be assigned 150 points.
This factor might be divided into five degrees, ranging from ten points for
the first degree to fifty points for the fifth degree. Selecting degrees and
their points will be described in a subsequent section on page 21.

After this preliminary work is completed, each job is described and
evaluated. There are two procedures of evaluation: (1) evaluate all the
factors in one job, then all the factors in a second job, etc., or (2) take
one factor through all the jobs, then a second factor, etc. The second
method of evaluating all jobs a factor at a time is preferred.

The points assigned, the factors are added, and the sum determines
the status of one job in comparison with the others. After all jobs have

16



CHART nz:



Factor


Degrees


1


2


3


4


5


1. Education


10


20


30


40


50


2. Experience


10


20


30


40


50


3. Physical demand


10


20


30


40


50


4. Responsibility for process


10


20


30


40


50


5. Responsibility for safety


10


20


30


40


50


6. Responsibility for materials


10


20


30


40


50


7. Working conditions


10


20


30


40


50


8. Hazards


10


20


30


40


50



CHART S:



Factor


Degrees


1


2


3


4


5


6


1. Education


10


20


30


40








2. Experience


10


20


30


40


50


60


3. Physical demand


10


20


30


40


50





4. Responsibility for process


10


20


30


40


50





5. Responsibility for safety


10


20


30


40








6. Responsibility for materials


10


20


30


40








7. Working conditions


10


20


30


40


50





8. Hazards


10


20


30


40


50





been evaluated, money rates are assigned following the pattern set by the
points for each job.



17



CHART YL



Factor




D


agrees




1


2


3


4


5


1. Education


10


20


40


80


160


2. Experience


10


20


40


80


160


3. Physical demand


10


20


40


80


160


4. Responsibility for process


10


20


40


80


160


5. Responsibility for safety


10


20


40


80


160


6. Responsibility for nnaterials


10


20


40


80


160


7. Working conditions


10


20


40


80


160


8. Hazards


10


20


40


80


160



The straight point system and the weighted point system differ in the
way points are assigned.

In the true straight point system each factor has the same number of
degrees and corresponding points as every other factor, as shown in
Chart IV. Chart V is a modified straight point system. It approaches
the weighted point system, since the same number of degrees is not used
for each factor.

In both Charts IV and V the amount of change in the points is the
same from one degree to the next — here, ten points per degree. When
this is the case, the scale is known as arithmetic. Should the amount of
change vary from one degree to the next, the scale is known as a form of
geometric scale, as shown in Chart VI.

An arithmetic scale and a geometric scale have never been used
together in the same evaluation plan. One of the two scales is used for
all the factors in a plan. There is, however, no evidence which proves that


1 3 4

Online LibraryLeo Charles PigageJob evaluation (Volume BEBR Faculty Working Paper v.5, no.3) → online text (page 1 of 4)