2011

Job Evaluation and Compensation Planning Proposal

Edwin Ebreo
ExeQserve Corporation 2108, 88 Corporate Center, Sedeno St. Makati City 8933199 * ecebreo@exeQserve.com

Goals: 1. Update job descriptions to reflect current responsibilities and performance expectations. 2. Review and refresh the companys current compensation policies (as documented and/or as practiced) 3. To update the companys position titling system, job hierarchy, pay grades and pay scale

BACKGROUND AND OBJECTIVES:

The overall purpose of the project is to prepare a corporate-wide compensation policy to guide in salary and benefits administration. The objectives of a corporate-wide compensation policy are as follows: a. Impart a better understanding of the principles of salary administration b. Maintain and monitor, through periodic reviews the company's salary levels to ensure consistency with those of the local area and those of other units in the province or region c. Provide a means to regularly review each individual's progress in a position, recognizing achievements and suggesting areas for possible improvement d. Determine a uniform structure of relationships which will adequately compensate each employee for work performed and provide opportunities for advancement and promotion e. Encourage consistency and equity with respect to salaries and benefits f. Develop and implement a system of total compensation so that all employees are remunerated fairly with reference to their specific duties, responsibilities and job requirements, as well as their level of total compensation relative to other employees in a given locality or area.

PROJECT PERSONNEL:
Client HR point person/coordinator ExeQserve consulting team

PROJECT RATIONALE AND SCOPE

A companys success depends on its people. Employees who understand their roles and are appropriately compensated and rewarded for their achievements are the keys to attracting and retaining high performers in the organization. In order to achieve balance between what is given and what is deserved, four important activities must be initiated; job analysis, updating job descriptions, job evaluation and salary structure revision. The differences in the rates paid for different jobs and skills affect the ability of managers to achieve their business objectives. Differences in pay do matter to employees, because their willingness to take on more responsibility and training, to focus on adding value for customers and improving quality of products, and to be flexible enough to adapt to change all depend at least in part on how pay is structured for different levels of work. Differences in the rates paid for different jobs and skills also influences how fairly employees believe they are being treated. Unfair treatment is ultimately counterproductive. This project is focused on establishing internal equity only, for the purpose of determining the internal job hierarchy, an ordered listing of jobs based on their value to the organization. This hierarchy provides information about which jobs are most and least valued, as well as information about the relative amount of difference between jobs within the organization. To arrive at this internal job hierarchy as an output with which to begin drafting the companys compensation policy, the project will have four phases:

PHASE 1. JOB ANALYSIS

Job Analysis is done to determine: a) the tasks performed in a job, using the job description as basis, and b) the knowledge, skills, and abilities needed to perform the job, using job specifications as basis. Below are some of the tasks involved in job analysis: -Inventory all existing jobs in the company. -Farm out job analysis questionnaires - Analyze result for use in later phases

PHASE 2. UPDATING OF JOB DESCRIPTION

An effectively developed Job Description is an effective tool for communicating expectations from incumbents. Employee job descriptions clearly identify and spell out the responsibilities of a specific job. Employee job descriptions also include information about working conditions, tools, equipment used, knowledge and skills needed, and relationships with other positions. Through the use of the data gathered from the job analysis, we should be able to revisit old job descriptions and update them accordingly.

PHASE 3. JOB EVALUATION

Job evaluation has evolved into many different forms and methods. Consequently, wide variations exist in its use and how it is perceived. No matter how job evaluation is designed, its ultimate use is to help design and manage work-related, business-focused, and agreed-upon pay structure. There are five major methods of job evaluation: 1. Ranking Ranking simply orders the job descriptions from smallest to largest based on the evaluators perception of relative value or contribution to the organizations success. 2. Classification Job classification entails slotting job descriptions into a series of classes that cover the range of jobs. Each class has a definition. These definitions are the standards against which the jobs are compared. 3. Factor Comparison

Jobs are compared against other jobs on the basis of how much of some desired factor they possess. Each jobs factors are ranked against each other jobs factors. The market pay rate for each job is then allocated among the factors based upon a market pay rate scale. 4. Point Plan These systems have three common characteristics: compensable elements, factor degrees that are numerically scaled, and weights reflecting the relative importance of each factor. 5. Hay Method Officially known as the Hay Guide Chart-Profile Method of Job Evaluation, this system utilizes three factors [know-how, problem-solving, and accountability] to arrive at a jobs evaluation. The jobs content is the sole basis for the job evaluation. Below are some of the tasks involved in job evaluation: -Establish purpose of evaluation. -Decide whether to use single or multiple plans. -Choose among alternative approaches. -Obtain involvement of relevant stakeholders. -Conduct Job Evaluation. -Create the job hierarchy. Crafting the Job Hierarchy The results of the job evaluation are used to prepare the projects major output: the internal job hierarchy. Below are some of the tasks involved in crafting the job hierarchy for the organization: a. b. c. d. e. f. Prepare job hierarchy, job titling scheme, and pay grades as applicable. Prepare working pay scale based on results. Apply results on current data, making adjustments as needed. Present for approval. Document changes in personnel data. Prepare for implementation and dissemination.

PHASE 3. COMPENSATION POLICY CRAFTING

This phase focuses on the preparation of the companys compensation policy which the company hopes can provide viable solutions to address the exodus of skilled workers to overseas employers and attract new talent to join the ranks. Below are some of the tasks involved in crafting the companys compensation policy. -Brainstorm over-arching policy statements and elements. -Prepare outline. -Compose draft for review and deliberation. -Test policy provisions on sample data and scenarios. -Revise policy as needed. -Finalize and present for approval and acceptance. -Prepare for implementation.

SCHEDULE OF ACTIVITIES
Project Start Date: TBD
PHASE

Project End Date: TBD

DETAILS TIME LINE Week 0 OUTPUT

PROJECT STEPS

Phase 1: Job Analysis

Project Pre-work

Data-gathering and research Preparation of materials and instruments

Job Analysis questionnaire Preliminary Analysis of Status Quo Accomplished JA Questionnaires Parts 1-2

Job Analysis Survey

Conduct of org-wide Job Analysis Survey : Part 1 Job Analysis Worksheet Blank Part 2 Current Job Description review Data Collation Data organization Data Comparison One-on-one meeting with Unit heads/Managers to validate job analysis results Review of job descriptions based on organization plantilla and

1 week

Job Analysis

1 week

Validation of Job Analysis Results Phase 2: Job Description Job Description Review

5 days

Summarized Job Analysis Results Finalized Job Analysis Result Refreshed Job Inventory based

3 to 5 days

PHASE

PROJECT STEPS

DETAILS

TIME LINE

OUTPUT

Updating

headcount, existing job descriptions and existing organizational structure Job Description Rewriting and Development Writing of new and updated job descriptions based on information collected from the JA survey
5 to 7 days

on current org. structure, plantilla, and headcount Updated Job Descriptions

Job Description & Specification Review and Validation

Submission of Job Descriptions for review and Management prior to approval

3 to 5 days

Approved documented Job Descriptions & Specifications Updated Job descriptions and freshly written job descriptions for new jobs

Creation of a Library Compilation of all approved job of Job Descriptions & descriptions & specifications Specifications Phase 3: Job Evaluation Planning and Preparation for Job Evaluation Identification of JE committee members Orientation of JE committee members Review/Identification of Job Evaluation Factors Job Rating Scale Establishing the relative worth of each position in the organization Establishing a matrix of skills and experience requisites of positions relative to Job Level Use benchmarking survey if available Establishing salary ranges and pay grades that will enable a systematic process in exacting salaries per position

1-2 Days

1-2 days

Approved documents are compiled in a Manual or Binder JE Committee members

Development of Job Evaluation Instrument Job Leveling/Grading Creation of a Skills Matrix Phase 4 Benchmarking Salary Structuring

1 to 2 days

Job Evaluation Worksheet Job Levels/Job Hierarchy Established Skills Matrix Benchmarked salary Established Pay Grades and salary ranges

5 to 7 days 5 to 7 days

10 Days 10 days

PHASE

PROJECT STEPS

DETAILS

Development of a Wages and Salaries Administration policy

Developing a policy guideline to effectively manage the administration of wages of employees

TIME LINE 3-5 days

OUTPUT

Acceptance and Delivery

5 days

Established policy on proper administration of salaries that will necessitate internal equity Finalized output and documents

Approximate total work days: 3 to 4 months.

AREAS OF RESPONSIBILITY
Client shall take responsibility for: Provision of documentation and information as required Ensure Timely Submission of deliverables. Coordination of schedules of consultants and transportation for oculars and branch visits as needed Provision of work area and equipment of consultants as needed Ensure attendance of identified employees for briefing sessions and meetings

The Job Evaluation Committee:

The job evaluation committee is a group of individuals tasked with the review and re-calibration of the company's job inventory in terms of each job's relative worth to other jobs within the company as well as to similar jobs within the industry. For this project, the committee is ideally composed of unit heads, representatives from HRD, with the consulting team as impartial participants. For this project, the three major tasks of the job evaluation committee are: to develop the job evaluation instrument to be used in evaluating each job to establish or upgrade job levels within the job hierarchy to participate in establishing a skills matrix and in updating the salary structure The committee is also convened later on to participate in the slotting of incumbents based on the finalized job hierarchy/salary structure.

In summary, the job evaluation committee members are expected to provide insights and recommendations to ensure that the available jobs as designed meet the needs of each department and enable the company to fulfill its mission-critical objectives. Suggestions and recommendations may come in the form of changes to job descriptions, salaries, job titles, department structures and chain of command, staffing reductions or additions, training in certain skills, etc. For this reason, committee members are expected to focus purposely on each job's objectives, content, and skill/competency requirements, rather than on the incumbent performer of a particular job.

ExeQserve Consultant shall take responsibility for:

Function as the primary interface with The Clients designated coordinators Ensure correctness of data gathering methods and approaches Ensure Timely Submission of deliverables. Review overall impact of new processes to be introduced into the system. Conduct coordination and follow through meetings to ensure proper implementation of initiatives and action plans. Conduct one-time orientation to educate key managers in the use of the employment policy. Ensure security and safety of confidential information and trade secrets

SAFETY PROVISIONS
The Consultants commit to deliver all items and services stated in this proposal on the agreed upon dates. The Client is expected to make the same commitment in ensuring cooperation of employees to achieve Program Goals. Client Company and the Consultants shall not be held liable for any cancellations and postponement triggered by force majeure or natural calamities For cancellations of the program not caused by force majeure or natural calamities any down payments made shall be deemed forfeited. The Consultants and its Client Company shall exert all efforts to resolve the issues emanating from this engagement in the best possible way as to preserve goodwill.