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Compensation Consideration and Consistency

Using the Internet explore the various benefits of job analysis and job evaluation. Next, discuss how these practices could benefit Customers First from the Chapter 6 case study.
Determine three (3) reasons why you believe it is necessary for companies to adopt compensation strategies and policies that promote competitive advantage. Justify your response.
Chapter 6 Case Study

Conduct the Study: Data Collection Methods and Sources of Data
Once analysts have gathered and made sense of these preliminary data, they can begin gathering and recording information for each job in the company. Analysts should carefully choose the method of data collection and the sources of data. The most common methods are questionnaires and observation. Questionnaires direct job incumbents’ and supervisors’ descriptions of the incumbents’ work through a series of questions and statements, for example:

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Describe the task you perform most frequently.
How often do you perform this task?
List any licenses, permits, or certifications required to perform duties assigned to your position.
List any equipment, machines, or tools you normally operate as part of your position’s duties.
Does your job require any contacts with other department personnel, other departments, outside companies, or agencies? If yes, please describe.
Does your job require supervisory responsibilities? If yes, for which jobs and for how many employees?
Observation requires job analysts to record perceptions they form while watching employees perform their jobs.

The most common sources of job analysis data are job incumbents, supervisors, and the job analysts. Job incumbents should provide the most extensive and detailed information about how they perform job duties. Experienced job incumbents will probably offer the most details and insights. Supervisors also should provide extensive and detailed information, but with a different focus. Supervisors specifically are most familiar with the interrelationships among jobs within their departments. They are probably in the best position to describe how employees performing different jobs interact. Job analysts also should involve as many job incumbents and supervisors as possible because employees with the same job titles may have different experiences.

For example, parts assembler John Smith reports that a higher level of manual dexterity is required than parts assembler Barbara Bleen reports. Parts assembler supervisor Jan Johnson indicates that assemblers interact several times a day to help each other solve unexpected problems, and supervisor Bill Black reports no interaction among parts assemblers. Including as many job incumbents and supervisors as possible will provide a truer assessment of the parts assembler job duties.

Of course, job analysts represent a source of information. In the case of observation, job analysts write descriptions. Job analysts, when using questionnaires, often ask follow-up questions to clarify job incumbents’ and supervisors’ answers. In either case, job analysts’ HR expertise should guide the selection of pertinent follow-up questions.

Companies ultimately strive to conduct job analyses that meet reliability and validity criteria. A reliable job analysis method yields consistent results under similar conditions. For example, let’s assume that two job analysts independently observe John Smith perform his job as a retail store manager. The method is reliable if the two analysts reach similar conclusions about the duties that constitute the retail store manager job. Although important, reliable job analysis methods are not enough. Job analyses also must be valid.

A valid job analysis method accurately assesses each job’s duties or content. In this regard, we are referring to a particular type of validity – content validity. Unfortunately, neither researchers nor practitioners can demonstrate whether job analysis results are definitively accurate or content valid. At present, the best approach to producing valid job descriptions requires that results among multiple sources of job data (e.g., job incumbents, analysts, supervisors, and customers) and multiple methods (e.g., interview, questionnaire, and observation) converge.2

Reliable and valid job analysis methods are essential to building internally consistent compensation systems. The factors that describe a particular job should indeed reflect the actual work. Failure to match accurately compensable factors with the work employees perform may result in either inadequate or excessive pay rates. Both cases are detrimental to the company. Inadequate pay may lead to dysfunctional turnover (i.e., the departure of high-quality employees). Excessive pay represents a cost burden to the company that can ultimately undermine its competitive position. Moreover, basing pay on factors that do not relate to job duties leaves a company vulnerable to allegations of illegal discrimination.

What can compensation professionals do to increase the likelihood that they will use reliable and valid job analysis methods? Whenever time and budgetary constraints permit, job analysts should use more than one data collection method, and they should collect data from more than one source. Including multiple data collection methods and sources minimizes the inherent biases associated with any particular one. For example, job incumbents may view their work as having greater impact on the effectiveness of the company than does the incumbents’ supervisor. Observation techniques do not readily indicate why an employee performs a task in a specific way, but the interview method provides analysts with an opportunity to make probing inquiries.

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