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Full text of "Job evaluation"

"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/-/ 



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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 


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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 

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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 
the scales cannot be used together. In fact, the factor comparison plan 
would suggest that the arithmetic scale could be used for some factors 
while the geometric scale could be used for other factors in the same job 
evaluation plan. 

The weighted point system is essentially the same as the straight 
point system except that the factors are not all considered equally im- 



18 



CHART 21 



Factor 




D 


egrees 






1 


2 


3 


4 


5 


1. Education 


10 


20 


30 


40 


50 


2. Experience 


30 


60 


90 


120 


150 


3. Physical demand 


20 


40 


60 


80 


100 


4. Responsibility for process 


10 


20 


30 


40 


50 


5. Responsibility for safety 


5 


10 


15 


20 


25 


6. Responsibility for materials 


5 


10 


15 


20 


25 


7. Working conditions 


10 


20 


30 


40 


50 


8. Hazards 


5 


10 


15 


20 


25 



portant. This is reflected by assigning more points to some factors than 
others. The amount of relative importance of the factors is a matter of 
judgment. An example of a weighted point system is shown in Chart VII. 
A geometric scale could be used just as well. 

The advantage of the point system is that, at a later time, data are 
available to show how a job was evaluated. The main disadvantage is the 
lack of flexibility, due to the use of a predetermined number of degrees 
and points which does not allow for the impact of the general economic 
changes. 

There are several modifications and combinations, too numerous to 
list, of the basic plans described. With this system, as with all other job 
evaluation programs, the only criterion to distinguish good plans from 
poor ones is continued acceptance by management and labor. 

ESSENTIALS OF A JOB EVALUATION SYSTEM 

In any job evaluation program there are two basic problems : ( 1 ) in- 
stalling some system of job evaluation and (2) maintaining the system. 

In each case there are certain essentials which must be thought out 
and a policy established. The following sections of this Bulletin will point 
out some of the problems of installing a system. The last section, starting 
on page 36, will consider points about maintaining a particular system. 



19 



Establishing Policies 

The first question to be answered is: "Do we want a job evaluation 
system?" 

Two main things to be considered are ( 1 ) how good is the present 
method of determining relative base money rates, and (2) how well is it 
accepted by management and labor. 

Some systems now in use may appear to be very illogical. But, if the 
parties involved like it, there is little reason to change. How simple or 
how complex the present system is should not matter in this decision. 

A new plan should be considered when either management or labor 
is dissatisfied with the present one, or when they think that the present 
plan could be improved. 

Any policy aimed at establishing a new plan might appropriately 
include statements covering: 

( 1 ) The company's position in the new system, particularly top-man- 
agement support. 

(2) Labor's position — varying anywhere from full partnership in all 
phases to acceptance of the general plan, but with the right of grievance 
on any particular job evaluation. 

(3) The employee's stake. Usually this is covered by a guarantee that 
the present encumbered base money rate of any particular person will 
not be reduced as long as he remains on the specific job. 

(4) Procedure for maintaining the system. This will include, among 
other things, a statement of what constitutes a change in any particular 
situation sufficient to cause a new evaluation of a job. 

(5) The relationship between the job evaluation and the collective 
bargaining process and agreement. 

Experience indicates that this policy statement should be worked out 
before the actual process of altering or establishing a system is started in 
detail. 

Selecting the Plan 

The next step is the selection of a plan. A company may adopt another 
company's plan in its entirety, design a tailor-made plan after a study of 
several systems, or develop a combination of these. The union may have a 
voice in the selection. 

In any case the company's own staff can be used, or outside services 
or consultants can be secured. If outside services are used, it is essential 
that provision be made for training a person on the staff of the company 
to be responsible for the maintenance of the system after it has been 
installed. This training is important for two reasons. First, because of the 

20 



economic point of view — the cost of setting up the system ; and second, 
because it serves as a means of assuring the continuance of employee or 
union acceptance. 

The factor comparison methods and various forms of point systems 
are the most popular. But, in selecting one of these plans, it should be 
recognized that there is no absolute way to insure that the factors which 
are used are the only essential factors. Nor is there any way of testing to 
decide absolutely whether or not all the factors which are used are essen- 
tial. Some guidance in selecting factors can be gained by testing the 
particular contribution of a specific factor and its influence on the results. 
This is strictly on a statistical or mathematical basis. This still leaves out 
certain psychological aspects, not influencing the numerical results one 
way or another to any marked degree, and these aspects may gain or 
lose the acceptance of the whole idea. The statistical aspects will be 
considered in a subsequent section, starting on page 36. The psychological 
aspects have to be left to judgment of the situation which may exist in 
each case. 

Choosing the Factors 

Guidance in selecting factors to be used in the ultimate plan can also 
be gained from a study of the scope of the jobs to be evaluated. 

Traditionally, jobs are grouped into families, or occupational ranges. 
But, more fundamental categories are these: 

( 1 ) Factory jobs, including direct and indirect labor in the factory. 

(2) Clerical positions in the numerous offices through the company. 

(3) Supervisory positions in the first lines of management. 

(4) Managerial positions in middle and top management. 

(5) Technical jobs in the staflf areas of a company. 

The consensus, again based almost entirely on tradition, is that no 
single plan can cover all these classifications; hence the use of the terms 
"job evaluation" for the factory and "position evaluation" for the office. 
Using such categories reduces the inequities which may exist within the 
two broad groups, factory and office. But it leaves the main inequity — 
that between office and factory. 

This disadvantage is particularly evident in plants that have an 
evaluation system for the factory and none for the office, yet in which 
any broad shift of the wage curve for the factory group is accompanied 
by at least a partial shift of the wage curve for the office group. 

The theoretically sound basis would be to have one plan for the 
entire company. However, this is usually blocked by lack of employee or 
union acceptance. Unions often block this plan when there are multiple 

21 



bargaining units. Employees object when they fail to see the complete 
picture. They fail to accept the fact that there will be job factors appli- 
cable to some groups and not to others; some employees will get a zero 
evaluation on some factors, while other employees will get a zero on 
other factors. Zero evaluations trouble these people. To them a zero 
evaluation for a factor is a psychological insult; they reject the whole 
general philosophy of such an evaluation program. Nor do they agree 
with giving some definite point-value to a factor which is not present 
in a job. Such a procedure appears silly to them; hence, again, they 
develop non-acceptance of the whole general philosophy of the evaluation 
program. 

Until the people involved can be educated to broaden their thinking, 
convenience dictates separate plans for broad groups of jobs — such as 
factory or hourly-rate jobs, and ofHce or salary-rated positions. 

Starting with this differentiation, the extremes of jobs that are to 
come under the plan should be listed, with several intermediate jobs 
scattered in between. This listing will aid in selecting common factors 
in the job requirements of all the types of work to be covered. 

Such factors may include: (1) education, (2) experience, (3) judg- 
ment, (4) physical effort, (5) mental effort, (6) responsibility for equip- 
ment, (7) responsibility for material and/or product, (8) responsibility 
for the safety of others, (9) working conditions — surroundings, (10) 
working conditions — hazards, (11) initiative, (12) dependability, 
(13) responsibility for monetary decisions and handling, and (14) an- 
alytical ability. This list is not all-inclusive. 

If the factor comparison system is to be used, then after each of the 
factors has been clearly and adequately described, the process of evalua- 
tion, previously outlined, is ready to begin. 

Determining Degrees and Points 

The point system, however, requires a further step. After the various 
factors have been described, the number of degrees and the points 
assigned each degree must be determined and fully identified. 

As to the number of degrees assigned to any one factor, there is no 
set rule. The scope of jobs will assist in determining the number of 
degrees. If the jobs to be evaluated cover a large range, from unskilled 
to, and including, highly skilled types of work, the number of degrees will 
be large. Usually it is not possible to identify clearly more than seven or 
eight degrees of a factor. Listing a greater number of degrees results in 
serious overlap between successive degrees. On the other hand, the use 
of too few degrees does not permit the factor to differentiate one job from 
another. This is explained in the subsequent section on checking the 

22 



plan on page 36. In determining how many and which degrees should be 
used, extreme care has to be exercised. The whole process is largely a 
matter of judgment, but it can be guided by the checking procedure 
outlined. 

In assigning points to each degree and degrees to each factor, there 
are certain basic considerations. Either all factors can be considered of 
equal importance, or some factors can be regarded as more important 
than others. Also, the successive degrees of any one factor may be con- 
sidered to be of a constant rate of change or a varying rate of change. 
As yet, no definite rules exist that can be applied in making a decision 
in either one of these cases. Job evaluation plans that make use of points 
have been devised by first judging what the point relationships should 
be, and then trying out the plan to see whether it works without disturb- 
ing too many of the prevailing conditions or relationships of relative base 
money rates for various jobs. However, as is brought out in the subse- 
quent section, Checking on Evaluation Program, some guidance can be 
gained in this judgment. 

Usually the importance of one factor in relation to another can be 
judged on the basis of the type of work to be done, along with the require- 
ments of the specific job. For example, in an industry where the experi- 
ence requirement is low, one would find some such scale as this: 

1. Skill factors 15% of importance 

2. Effort factors 25% of importance 

3. Responsibility factors 25% of importance 

4. Working conditions factors 35% of importance 
whereas in a precision tool industry the scale might be: 

1. Skill factors 50% of importance 

2. Effort factors 10% of importance 

3. Responsibility factors 30% of importance 

4. Working conditions factors 10% of importance 

The magnitude of the points used is a matter of choice. The main thing 
to avoid is the use of fractional parts of a point or of such a small number 
that the relative totals are not easy to distinguish. This caution is par- 
ticularly important when the number of total points for one job differs 
only slightly from that of another, and the jobs fall in different labor 
grades. The psychological effect is disturbing, since it is hard to justify 
such fine measurements in a system based to a considerable extent on 
subjective judgment. For examples of weighting effect see Charts IV, V, 
VI, and VII. 

Either an arithmetic or a geometric scale may be adopted for use 

23 



throughout the plan. As stated, in an arithmetic scale the amount of 
change is of equal magnitude from one degree to the next for a factor; 
in a geometric scale the amount becomes increasingly greater from one 
degree to the next for the factor. Thus far, sufficient study has not been 
made to determine just which scale is the most satisfactory. Present indi- 
cations are that best results would require an arithmetic scale for some 
factors, but a geometric scale for others. Furthermore, there is an inverse 
relationship between the scale used and the ultimate shape of the wage 
curve; for example, an arithmetic scale of points gives a curved wage 
trend, and a geometric scale of points gives a straight wage trend. This 
is explained further in the section on Wage Curve on page 30. 

Job Description 

The job evaluation program is no stronger than the weakest of its 
parts — including job description. In fact, job description is the core 
of many job evaluation programs. Through the securing of data for the 
job description, the greatest number of people are reached. This enables 
them to feel that they have a part in the acceptance of the ultimate 
resulting labor grades and corresponding money rates. 

Yet, in many cases the complete failure of the whole program can 
be traced to poor job description. Hence it is vital to know what a good 
job description is and how to make one. 

If satisfactory results are to be achieved, the job description must 
convey to the evaluators a clear, accurate, and complete picture of the 
job requirements. Some suggest that economic worth of jobs should be 
included in the job description. As yet, a clear method of presenting this 
is not available. 

Before starting to collect the data about the jobs, other possible uses 
of the material could well be considered. The data might be applied in 
such areas as training, employment, placement of the physically handi- 
capped, and safety. When this is kept in mind the data are collected 
more economically; moreover the psychological effect of conducting just 
one survey rather than many surveys is good. 

The actual data-gathering procedures will vary. A method used in 
a certain situation will not work in another situation. But ultimately the 
specific worker and/or his representative, and the supervisors, should be 
permitted to pass judgment upon the final draft of any description that 
concerns them. 

The problem is to strike a balance between not enough and too much 
information in the description. There is no sure way of knowing when 
this balance has been achieved. Some believe that approval by the super- 
visor and the worker and/or his union representative suffices. This is not 

24 



FIGURE 12 
JOB RATING STANDARD 



Blanko Corporation 
Anytown, U.S.A. 

Job TitIP Grinder - Rough (Castings) 



Code No. 



Total Points. 



281 



Department. 



-»9 - Grinding 



Section ^"""'^^ 



Grinds gates, fins, burrs, roughness, etc., from a wide variety 
of castings such as small blanks attachments to large commercial 
castings using stand grinder. Checks castings to determine size 
and type of grinding vheel to use, to perform specified operation 
according to previous instructions and with proper wheel, first 
sounding for cracks, places safety washer correctly, and tightens 
retaining nut. Dresses wheel when necessary with a star wheel 
dresser to obtain proper wheel surface, and adjusts rest to 
proper height and distance from wheel to accommodate size of work, 
or compensate for wheel wear . 

Shovels castings into pam at machine and manually holds casting 
between rest and wheel manipulating part in most efficient 
manner to remove excessive metal. Places ground castings in 
barrel, and when completed separates grinder's and packer's 
tickets, places packer's ticket on barrel and rolls barrel out 
to be trucked to next operation. Occasionally uses hand air 
grinder for setting types of grinding and burring such as large 
flat hard iron plates, and inside of scoops and other castings 
that can not be reached by conventional stand grinder. 




SO. Such clearance, through signatures affixed to the description, can be 
no better than a guide. Others place fine print at the bottom of the page 
to the effect: 

The above statement reflects the general details considered necessary to 
describe the principal functions of the job, and shall not be construed as a 
detailed description of all the work requirements that may be inherent in the job. 

This fine print does not settle the problem, but evades it. A further guide 
is the difficulty the evaluators have with the job description. The more 



25 



the evaluators of any job differ in their evaluations of job factors, the 
greater the Hkelihood that the job description is. not clear, accurate, and 
complete. 

It is advisable not to use such all-inclusive words as "operates," 
"handles," "assists," and "may perform" except when the descriptions go 
on to define and explain such terms. 

The final job description may be in sentence-and-paragraph form or 
it may be a check list. An example of the former is given in Figure IV. 

Two further basic recommendations: (1) The jobs should be reason- 
ably standardized before descriptions are attempted, and (2) descriptions 
should be reviewed periodically to keep them up to date. 

The Actual Job-Evaluation Process 

One of the prime reasons for a Job Evaluation Program is the de- 
termining as impartially as possible the relative status of each job in 
respect to all the others. In this step the actual process of making such a 
determination is set down. Detail is included to the extent that the 
particular system of job evaluation directs. As previously pointed out, 
though some systems of job evaluation are more detailed and refined 
than others, detail alone does not insure a better evaluation job — certain 
sorts of detail may actually detract from the accuracy of the results. See 
the section on Cross-checking the Evaluation Program on page 36. 

The evaluation may be done by one person or by a partly rotating 
committee. Committees may be composed of management alone or of 
management and labor. At least some members of any such committee 
should be permanent, with one person in charge throughout all the 
evaluations. Rotating members attend meetings at which jobs in their 
work area are being evaluated and may also attend meetings that deal 
with other jobs in which they are interested. 

It is best for each person to do his assigned evaluations independent 
of the others and then to compare the results. Any differences are to be 
discussed and reconciled. There are two possible methods: (1) Evalu- 
ating all jobs on one factor before proceeding to the next factor or 
(2) evaluating a job on all factors before proceeding to the next job. 
The first method is preferred, to avoid the unduly frequent change of 
pace and thought required in the second method. 

Delay in reconciling differences of opinion about the rating of a job 
may be due to lack of clarity in the job description — - or to plain stub- 
bornness. If the former, a new job description may be called for. These 
non-reconciled evaluations are the main check on the adequacy of the 
job description. It is, in fact, about the only sound check available. 

In those cases in which stubbornness prevents reconciling differences 

26 



in evaluations, the task may be set aside until all other jobs have been 
evaluated. Then, the ditlerences can usually be eliminated. It is undesir- 
able to engage in "horse-trading" on the evaluations for these jobs. 

A final form for a job evaluation can be made part of the job descrip- 
tion form, or it can be on a separate sheet accompanying that form. See 
Figure IV for job description. Figure V suggests the type of rating and 
basis of rating which may be used. 

At this point, the jobs should be arranged in the order of their rela- 
tive worth. However, it may be found that some evaluations do not 
reflect the intentions of the job evaluation plan. Furthermore, the addi- 
tive results of each factor evaluation may not give the value of importance 
which people may attach to certain jobs. This means that considerable 
cross-checking should be done, by methods set forth in a subsequent 
section on page 36. 

Wage Survey 

The purpose of the wage survey is to collect comparable wage data 
that will enable the particular plant to determine on what wage levels it 
wants to operate or has to operate and assist in reducing, if not elim- 
inating, inequities which are in existence. Any plant is confronted with 
inequity problems due to: 

( 1 ) Inequities within its own plant. 

(2) Inequities within its industry. 

(3) Inequities within its labor market area. 

(4) Gross inequities between industrial types within the labor market 
area. 

(5) Some combination of two or more of the above classifications. 
Just what the particular plant or company may do depends upon what it 
wishes to achieve in the product-competition field and/or in the labor 
market. 

The first step in the wage survey is the selection of those jobs to be 
covered by the evaluation program. The process should: (1) Give a 
rather complete coverage over the range of jobs evaluated; and (2) list 
jobs which are fairly standard in job content in the area to be surveyed. 

The second step is to draw up a list of organizations from which 
to secure data. 

Then, with a list of wage rate classifications (i.e., average hourly 
earnings, base rate, occupational rate, etc.) it is best to make personal 
calls to each company. In these calls a comparison of jobs can be made 
by job content only. The wage data should be carefully gone over to be 

27 



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sure that comparable data are being received. For example, wage rates 
can be influenced by: 

( 1 ) Average hourly earnings. 

(2) Incentive bonuses or premiums. 

(3) Nominal operating hours. 

(4) Inclusion of overtime pay. 

(5) Relationship of guaranteed day-w^ork rate and incentive plan 
used. 

(6) Number of persons in each job in each plant surveyed. 

(7) Special benefits and privileges. 

The above list, though not all-inclusive, does suggest the various diflfer- 
ences that should be looked for. 

All data should then be compiled and any data not comparable should 
be eliminated from further use. Copies should then be supplied to plants 
cooperating in the w^age survey. 

Wage Curve 

Even after eliminating irregular wage data collected during the wage 
survey, one will soon discover that plotting the wage curve presents 
some problems. 

The ultimate purpose of the wage curve is to arrive at the relative 
money rates which are to be paid for all the jobs which have been 
evaluated. These rates should reflect, in general, the relative status of the 
jobs evaluated. 

The first step is to plot, on graph paper of convenient size, the relative 
evaluations of the jobs along one ordinate, and the money rates along 
another ordinate. See Figure VI. All usable wage data from the wage 
survey, and rates within the plant, should be shown. (It is desirable to 
key the data so that the sources of information from any particular plant 
can be readily identified.) The resulting plot will show that no trend line 
will be possible which will include all the points plotted. Rather, there 
will be range trends, as shown by the dotted lines in Figure VI. 

There are two ways in which trend lines can be established: mathe- 
matically, by what is known as the least-squares method, or by estimating. 

The method of least squares is defined and described in any text on 
statistics. This method is sound mathematically. But it is not practical 
here because the original data are based on judgment and not on abso- 
lute facts. It is foolish to apply a detailed mathematical procedure to 
data which are not absolute in the engineering sense. 

A second reason why this method is undesirable is that the trend line 



30 



FIGURE Yl 



o 
q: 



3 
O 

X 

a> 
v> 
o 

CO 



.80] 

.60 

.40 

.20 

.00 

.80 

.60 



.40 



-r 



c 
o 

-3 



0> 

a. 
o 



Note: 



Total 
Data from Chart I. 



/Trend Lines 



^ 



o Own company 
• Company A 
X Company B 
a Company C 



Points 
Illustrative only. 



is not necessarily straight, and since the method of applying the least 
squares is easiest for a straight line, people tend to force a straight line 
on data which should yield a curved line. Then, to establish labor grades, 
the straight line is broken up — "roughed up" — into steps. What these 
objections all add up to is that the method of least squares gives a false 
sense of exactness. It looks scientific, but isn't. 

Another matter to settle is the general shape of the trend lines. 
Should they be straight lines or curved lines? There is no answer to this 
question except as indicated by the data. It is reasonable to assume that 
if a wide range of skills is being covered by the one evaluation program 
and if the original measuring scales are arithmetic scales (for example, 
5, 10, 15, etc.), the trend lines will be curved, concave upward, when 
the data are plotted on ordinary arithmetic graph paper. If, however, the 
original measuring scales used in the evaluation are geometric (for ex- 
ample, 10, 20, 40, 80, etc.) the trend line will be a straight line. The 
narrower the range of skills to be covered by the evaluation program, the 
more nearly straight the trend lines. 

Once the trend lines indicate the range of rates which prevail for the 
various jobs, the next consideration is to settle where within the range 
the particular plant can operate. There are two extremes: (1) at the 
bottom of the range throughout, and (2) at the top of the range 
throughout. Other alternatives are any number of places between the 
range lines. Each company must set its own policy in this regard, on the 



31 



basis of the product and labor competitive markets and with due regard 
to collective bargaining obligations if such exist. 

If a single rate structure is the final aim for each labor grade, the 
establishment of the average trend line will permit going directly to 
establishing labor grades. However, if rate ranges are to be used for each 
labor grade the trend lines will show one of the following tendencies of 
the range between the lines: constant money range, constant percentage 
range, or variable money and percentage range. Here, again, a policy 
needs to be determined. Usually, the wider the range of skills covered 
by any one job evaluation program, the more the trend will be toward 
a variable percentage range. This is necessary to permit more variability 
in rates for higher-skilled jobs. Furthermore, the use of rate ranges for 
each job requires a policy on how the progression is to be made from 
the lowest to the top rate for the job. Is this progression to be according 
to seniority, merit, or a combination of seniority and merit? 

Labor Grades 

In the previous section. Wage Curve, a trend line was determined, 
which relates the relative evaluation of the jobs with a money rate to be 
paid. However, one will quickly discover that a great number of wage 
rates will be present if the study stops with the wage trend line. Further- 
more, since the whole system up to this point is based on judgment, even 
though it is perhaps sound, many money rates will be a fraction of a cent 
difTerent for very similar jobs. Such a fractional cent variance is nearly 
impossible to explain and justify to those expected to accept and work 
with the results of a job evaluation system. Also, to keep a record of so 
many difTerent rates becomes an increasingly diflficult accounting problem 
for management as well as a union. 

To overcome the psychological aspect of small fractional cent variance 
for similar jobs, jobs are grouped into what is known as labor grades. 
This grouping of jobs into labor grades reduces the friction which would 
result with small fractional cent variances because all jobs in any one 
group, or grade, will carry the same rate or rate range. 

It is desirable that a few basic rules be observed in establishing labor 
grades. They are: (1) the number of grades should be established to 
provide sufficient incentive for movement from grade to grade; (2) the 
overlap between labor grades, if rate ranges are used, should not be 
excessive; and (3) a rational pattern of difTerentials should exist through- 
out the labor grades. 

Considering the first basic thought, the number of labor grades estab- 
lished, one finds that there is a workable minimum as well as a maximum 
established through practice. The minimum condition is to have labor 

32 









FIGUR 


E ML 








1.39- 
















a> 








11 iyiilliyilll::!:;: 




^» 








I: ::::::::::;::::::;:: 




o 








il l|llillli:l:l::l:::j 




% 1.23- 








1: i:!;:;::;;!;ll;;i:i! 














^ 








ii;:i 




3 












^ 1.12 
















« 1.05- 
o 1.00- 




















.'" '" 












m 




• 
















1 


iiiiiiii 


lllliil 


4 


iiiiSi 





Labor Grades 

grades with at least five or six percent of the base rate differentials 
between successive grades. Values less than that will lead back to the 
problem of fractional values, and it will be nearly impossible to secure 
acceptance, as previously stated. The maximum limit of differentials 
between successive labor grades will depend upon the range of skill classi- 
fications to be covered by the job evaluation plan (i.e., unskilled through 
semi-skilled to and including high-skilled jobs is the top consideration). 
For the ordinary jobs usually found, and included in the job evaluation 
plan, in a mass production industry the differential amounts to about 
ten to fifteen percent of the specific base rate. Higher differentials make 
the jump from labor grade to labor grade too abrupt and create distrust. 

This whole situation can be illustrated graphically as shown in Figure 
VII. In this case the differential between labor grade one and two is five 
percent; between grades two and three, about seven percent; about nine 
percent between labor grades three and four; and around eleven percent 
between the fourth and fifth labor grades. 

In the case of the overlaps between labor grades one should consider 
the psychological impact of the status of workers in various grades. 
Whether it is justified or not, each worker builds up a feeling of status 
based somewhat on his particular labor grade assignment and the cor- 
responding money which is attached to the labor grade. It is this status, 
as well as the yet unsolved problems of impartial and inadequate systems 
of merit rating, which has caused many plans to resort to a single rate 
for each labor grade. This is to avoid the problem that arises as the 
result of both overlap and merit rating. 

When labor grades overlap there is a possibility of a person in one 



33 



FIGURE 2III 



1.53 



c 1-39 
^ 1.35 
q: 

-z 1.23 

=} 
o 

X 



o 
CD 



1.16 
1.12- 
1. 10 
1.05 
1.00 



If |-^::/; 2 : 3 4 5 



Labor Grades 

labor grade receiving the same hourly rate as a person in the next or 
subsequent labor grade. Usually this overlap is spoken of in terms of 
money. An illustration of no overlap is shown in Figure VII. Here each 
successive labor grade — a single wage structure • — • pays a distinctly 
diflferent rate. There can be no case of people assigned to different labor 
grades receiving the same amount of money per hour, or what ever other 
pay basis is used. 

Should rate ranges be used in Figure VII one may get a picture as 
shown in Figure VIII. 

In Figure VIII an arbitrary rate of ten percent of the starting rate 
was used in each case. But, note that between labor grades one and two 
there is an overlap of five cents; betwen labor grades two and three, a 
four cent overlap; and no overlap between grades three and four and 
even a gap of four cents between grades four and five. 

For example, if an arbitrary rate of twenty-five percent of the starting 
rate is used for the rate range in each grade. Figure IX results. In this 
case there is an overlap between each two successive labor grades. How- 
ever, there is a serious overlap picture developing. Considering grades 
one and four, there is an overlap of three cents. The type of work — 
even the minimum work — which will be found in grade four should be 
far superior in requirements to that in grade one; yet someone in grade 
one could receive equal to or better than a person in grade four. Such a 
situation hits strongly at the psychological status of the worker in grade 
four. This successive overlap should be avoided. This is even more serious 



34 



1.74- 



FIGURE IX 



o 



3 
O 



o 
CD 



.54- 



.40- 
.37- 

.31- 
1.25- 
1.23- 



.05- 
.OOH 



Labor Grades 

if a job in labor grade one is on incentive and a job in labor grade four 
is on day work. 

A certain amount of overlap is essential for management to provide 
flexibility of transfer and upgrading with no additional expense during 
the employee trial period on the new job. 

A third thought on establishing labor grades is to have a rational 
pattern of differentials throughout the labor grades. In Figure VII this 
pattern is 5 (difference between $1.05, grade two, and $1.00, grade one, 
etc.), 7, 11, 16. Another pattern could be 5, 5, 5, 5; or 5, 6, 7, 8. But a 
pattern of 5, 7, 8, 12 is hard to justify because a suppression is shown 
in the middle, as contrasted with the implication of increasing importance 
of successively higher labor grades. 

There are many other important considerations in establishing labor 
grades. It must be kept in mind that: 

(1) Tradition is hard to overcome; so grouping of jobs into labor 
grades may have to be a little different than strict evaluations order. 

(2) Occupational grouping of jobs should be considered. 

(3) General union feeling and prevailing practice in the area on the 
number of labor grades should not be ignored. 

(4) The greater the difference of the rate for the lowest paid job and 
that for the highest paid job, the more labor grades one will have. 



35 



CROSS-CHECKING THE EVALUATION PROGRAM 

The foregoing sections have outHned the general and procedural as- 
pects of job or position evaluation. As is evident, much of the mechanics 
is based on judgment. But, there is need for better guidance in the 
judgment process than has been evident in practice to date. In this section 
some procedures are given to assist in this judgment process. Under no 
conditions are these procedures the absolute measure and neither are they 
to be used as the sole criterion. There are too many problems within the 
company and too many problems arising from forces outside the company 
— problems and forces that cannot as yet be fully evaluated — to allow 
a dogmatic solution. 

Factors to be considered in cross-checking the evaluation program 
include : 

( 1 ) The effectiveness of each factor. 

(2) The validity of each factor. 

(3) The validity of factors in respect to each other. 

(4) The continuance of validity of the plan. 

Effectiveness of Each Factor 

This means: is the factor necessary and is it fully used? In many cases 
a factor (see Charts IV, V, VI, and VII) is listed with several possible 
degrees of its use. Such listing assumes that the factor is necessary and 
that it is to be fully used. The latter is important when considering item 



CHART VUr 


FACTOR: Experience 


Degrees 


Jobs assigned 


1 
2 


1 
6 


3 


3 


4 


8 


5 


II 


6 


2 


7 


3 


8 


1 



36 



CHART IX 



FACTOR: Work Hazards 


Degrees 


Jobs assigned 


1 
2 


5 


3 


5 


4 


21 


5 


4 


6 


— 



three, the validity of factors in respect to each other. To check the first 
point, one should tabulate the degrees for the factors and the correspond- 
ing number of jobs assigned to each degree. Such a tabulation could be 
as shown in Chart VIII. This shows that the factor is at least used 
throughout its range. Whether it contributes to the plan properly will be 
shown subsequently. In the following illustration. Chart IX, some ques- 
tion is to be raised regarding the effectiveness of the factor, especially 
since the trend is to simplify jobs in industry, rather than to make them 
more complex. Therefore, if the higher degrees, especially those of a 
factor, are not used at the time of installation of the job evaluation pro- 
gram, it is even more likely that they will not be used in the future. This 
has a special impact on the validity of factors in respect to each other. 

Validity of Each Factor 

The second consideration, the validity of the factor, is a measure of 
how distinctly the factor is separated from other factors in the plan. The 
first step is to tabulate the jobs and to set opposite each job the rating 
for the factors to be checked against each other. A suggested tabulation 
is shown in Chart X. The same data then can be plotted on a graph as 
in Figure X. 

If the trend line can be established as shown, if the points cluster close 
to the trend line, and if the slope is at about 45 degrees, rising or falling 
(assuming uniform scales on the graph), then there is a high correlation 
between the two factors. In such a case, one factor or the other is 
sufficient in the plan; if both are used, usually they are measuring the 



37 







CHART X 






Job 


Factor One 


Factor Two 




Job 


Factor One 


Factor Two 




Rating 


Rating 






Rating 


Rating 




in degrees 


in degrees 






in degrees 


in degrees 


1 


2 


1 




19 


3 


3 


2 


1 


1 




20 


3 


3 


3 


1 


2 




21 


2 


3 


4 


2 


1 




22 


2 


3 


5 


1 


I 




23 


3 


3 


6 


1 


I 




24 


3 


3 


7 


2 


2 




25 


3 


4 


8 


2 


2 




26 


3 


2 


9 


1 


1 




27 


3 


2 


10 


2 


2 




28 


3 


2 


II 


2 


2 




29 


3 


2 


12 


2 


2 




30 


3 


2 


13 


3 


4 




31 


5 


4 


14 


5 


5 




32 


5 


4 


15 


2 


2 




33 


3 


2 


16 


2 


2 




34 


3 


2 


17 


1 


3 




35 


3 


2 


18 


2 


3 

1 











same thing. If no trend line can be quickly seen, or if a trend line run- 
ning nearly horizontal results, each factor is measuring a relatively 
different feature of the job. 

Validity of Factors in Respect to Each Other 

The third item, the validity of factors in respect to each other, con- 
siders the importance attached to the individual factors. In Charts IV 
and VI each factor is considered to be of equal importance and each 
factor has the same number of points assigned to it as do each of the 
remaining factors. In Chart V, however, some factors are considered 
more important than other factors. This is shown by a different number 
of degrees, so that even though all factors start out with the same number 
of points, some factors can have a higher average rating than others. 
Chart VII definitely shows the variable importance attached to respective 
factors. 

There is nothing wrong with the importance attached to each factor 



38 



FIGURE X 



M 4 

0) 

0> 

w. 

o» 

0) 

■° 3 

I 

0) 

c 

? z 

o 

u 

o 




Trend line 



o2 ^7 o3 



^ ol oi 



12 3 4 5 

Factor Two- degrees 

except that the entire weighting is based on judgment. Furthermore, the 
plan is explained as such to those who will operate under it. The purpose 
of this check is to make sure that: ( 1 ) the judgment of factor importance 
is correct, and then that (2) the average collective results of the job 
evaluations are the same as the plan shows. For example, is it a correct 
judgment of the factor "experience" to make it twice as important as the 
factor "working conditions"? Do the average collective results of the 
evaluations of all the jobs show this to be so? 

To make this check on the relative importance of factors, consider the 
following example. From Chart X the average rating for Factor One is 
2.48; and for Factor Two, 2.37. (Secured by adding all the degree ratings 
for Factor One and dividing by the number of jobs considered. Likewise, 
for Factor Two.) Then add the difference, regardless of sign, between 
2.48 and each job rating for the factor. For Job One, for example, the 
difference is 0.48. Divide this total by the number of jobs considered. 
For Factor One this arithmetic deviation is 0.84; and for Factor Two, 
0.81. In terms of points. Factor One is 4.20 (secured by multiplying 0.84 
by the 5-point intervals between degrees) and Factor Two is 8.10. 

The specific plan from which the data were taken is shown in Chart 
XL This shows that Factor Two is considered to be double the impor- 
tance of Factor One. If this is the case, the arithmetic deviations for these 
factors should have the same or nearly the same relationship. The actual 
figures in this case show that the ratio is nearly two (8.10 dixided by 



39 



CHART zr 



FACTOR 


Degrees 


1 


1 


3 


4 


5 


One 
Two 
Three ^^^^^ 


5 


10 
x20 


15 
30 


20 
40 


25 
50 









4.20). So the two factors in use are contributing, on the average, to the 
results in accordance with the plan as designed. This is a reasonably close 
approximation method to use to guide judgment. 

Continued Validity of the Plan 

A fourth point to check is the continuance of the validity of the plan. 
It is important to recognize that from time to time new jobs will be 
evaluated, and changed jobs will be re-evaluated. The main question 
that arises is : How do these new evaluations change the actual collective 
results from what they were at the time of installing the plan? The 
method used to answer this question is equivalent to setting up a quality 
control chart of much the same sort as that used by production 
departments. 

The procedure will be to determine the average rating for each fac- 
tor at the time of installing the plan. Then periodically — every six 
months or a year — thq, average factor ratings should be determined for 
all evaluations which have been made within the six months or year 
period. These average ratings are then compared with those at time of 
installation. Differences will indicate whether or not the new evaluations 
are more lenient or more severe than those that were adapted at the 
time of installing the plan. This sort of check helps keep inequities from 
developing. 

INSTALLATION AND MAINTENANCE OF PLAN 

Before a job evaluation plan is actually installed a considerable 
amount of explanation and selling has to be done to those who have to 
operate with it. This selling is a continuous process. It must go on 
throughout the period of establishing the plan and ever afterwards. 

Above all, remember a job evaluation plan is used in a dynamic situ- 
ation, and it needs continual guidance by someone who has been assigned 



40 



this responsibility and who makes this responsibility an important part 
of his work. 

A procedure must be set up which, among other things, will : 

( 1 ) Handle all grievances on present evaluations or re-evaluations. 

(2) Periodically review' the jobs to ascertain whether or not the jobs 
are the same as originally described. 

(3) Periodically conduct sound wage surveys. 

(4) Continue to receive support from all those closest to the jobs — 
as by calling attention to job content change. 

(5) Provide close check upon adherence to job description in work 
assignments — except in emergencies. 

(6) Provide a constant source of assistance to show and solve im- 
pacts of the job evaluation plans on other personnel policies and labor 
contract provisions. 

CONCLUSION 

This Bulletin is intended mainly to present the techniques of job 
evaluation (or position evaluation) and to indicate many "fringe" 
aspects which must be considered. It does not attempt to discuss when 
and by whom job evaluation should be adopted. That is a decision to be 
made by management and labor representatives in each situation. As is 
evident, judgment forms an important part of any job evaluation. And, 
since judgment is not positive in measurement, psychological and socio- 
logical aspects take on added meaning in any evaluation. No attempt has 
been made here to weigh the pro and con of any of the human relation- 
ships. Instead, the reader is encouraged to investigate other current 
publications on the subject, some of which are listed in the following 
bibliography. 



41 



SELECTED BIBLIOGRAPHY 
Books and Pamphlets 

Baker, Helen, and True, John M. The Operation of Job Evaluation Plans, A 
Survey of Experience, Industrial Relations Section, Princeton University, 
Princeton, N.J., 1947, 112 pages. 

Balderston, C. Canby. Wage Setting Based on Job Analysis and Evaluation, 
Industrial Relations Monograph No. 4, New York Industrial Relations Coun- 
selors, Inc., 1943, 68 pages. 

Benge, Eugene J., Burk, Samuel L., Hay, Edward N. Manual of Job Evaluation, 
Harper & Brothers, New York, 1941, 198 pages. 

Dickinson, Z. Clark. Coinpensating Industrial Effort, The Ronald Press Company, 
New York, 1937. 

Gomberg, William. A Labor Union Manual on Job Evaluation, Labor Education 
Division, Roosevelt College, Chicago, 1947, 80 pages. 

Harrington, C. C. (ed.). Job Evaluation and Wage Incentives, Conover-Mast 
Publications, Inc., New York, 1949, 289 pages. 

Industrial Job Evaluation Systems, Occupational Analysis Branch, U. S. Employ- 
ment Service, Department of Labor, Revised October, 1947, 69 pages. 

Industrial Management Society. Occupational Rating Plan, Industrial Manage- 
ment Society, Chicago, 1943, 232 pages. 

Johnson, F. H., Boise, R. W., Jr., and Pratt, D. Job Evaluation, John Wiley & 
Sons, Inc., New York, 1946, 288 pages. 

Jones, Philip. Practical Job Evaluation, John Wiley & Sons, Inc., New York, 1948, 
304 pages. 

Lott, Merrill R. Wage Scales and Job Evaluation, The Ronald Press Company, 
1926, 161 pages. 

Lytle, C. W. Job Evaluation Methods, The Ronald Press Company, New York, 
1946, 329 pages. 

National Industrial Conference Board. Job Evaluation: Formal Plans for Deter- 
mining Basic Pay Differentials, Studies in Personnel Policy No. 25, The 
Board, New York. 

National Industrial Conference Board. Principles and Application of Job Evalua- 
tion, Studies in Personnel Policy No. 62, The Board, New York, 1944. 

Otis, Jay L., and Leukart, Richard H. Job Evaluation, Prentice-Hall, Inc., New 
York, 1948, 473 pages. 

Patton, J. A., and Smith, R. S., Jr. Job Evaluation, Richard D. Irwin, Inc., Chi- 
cago, 1949, 316 pages. 

Position Classification in the Public Service, Committee on Position Classification 
and Pay Plans in the Public Service, Civil Service Assembly of the United 
States and Canada, Chicago, 1941, 404 pages. 

Riegel, John W. Wage Determination, Bureau of Industrial Relations, University 
of Michigan, Ann Arbor, Mich., 1940, 278 pages. 

Smyth, R. C, and Murphy, M. J. Job Evaluation and Employee Rating, McGraw- 
Hill Book Company, New York, 1946, 255 pages. 

Stanway, H. Geddes. Applied Job Evaluation, The Ronald Press Company, New 
York, 1947, 81 pages. 

Stigers, M. F., and Reed, E. G. The Theory and Practice of Job Rating, McGraw- 
Hill Book Company, New York, 2nd Edition, 1944, 168 pages. 

United Electrical, Radio and Machine Workers of America. U. E. Guide to Wage 
Payment Plans, Time Study and Job Evaluation, 2nd Edition, 1943, pp. 
72-95. 

42 



Magazine Articles 

Barkin, Solomon. "Wage Determination: Trick or Techniques," Labor and 
Nation, 112 East 19th Street, New York, June-July, 1946, pp. 24-26, 48. 

Benge, E. J. "Statistical Study of a Job Evaluation Point System," Modern 
Management, The Society for Advancement of Management, 84 William 
Street, New York 7, April, 1947, pp. 17-23. 

Gomberg, William. "Union Interest in Engineering Techniques," Harvard Busi- 
ness Review, Gallitan House, Soldiers Field, Boston 63, Mass., Spring, 1946, 
pp. 356-365. 

Gomberg, William. "A Collective Bargaining Approach to Job Evaluation" and 
"A Rejoinder to William Gomberg" by Solomon Barkin, Labor and Nation, 
New York, November-December, 1946, pp. 51-54. 

Lawshe, C. H., Jr., and Salter, G. A. "Studies in Job Evaluation: I. Factor 
Analysis of Point Ratings in Hourly-Paid Jobs in Three Industrial Plants," 
Journal of Applied Psychology, June, 1944, pp. 189-198. 

Lawshe, C. H., Jr. "Studies in Job Evaluation: II. The Adequacy of Abbreviated 
Point Ratings in Hourly-Paid Jobs in Three Industrial Plants," Journal of 
Applied Psychology, June, 1945, pp. 177-184. 

Lawshe, C. H., Jr., and Maleski, A. A. "Studies in Job Evaluation: III. An 
Analysis of Point Ratings in Salary Paid Jobs in an Industrial Plant," Journal 
of Applied Psychology, April, 1946, pp. 117-128. 

Lawshe, C. H., Jr., and Allessi, Salvatore L. "Studies in Job Evaluation: IV. 
Analysis of Another Point Rating Scale for Hourly-Paid Jobs and the Ade- 
quacy of an Abbreviated Scale," Journal of Applied Psychology, August, 1946, 
pp. 310-319. 

Lawshe, C. H., Jr., and Wilson, R. F. "Studies in Job Evaluation: V. An 
Analysis of the Factor Comparison System as It Functions in a Paper Mill," 
Journal of Applied Psychology, October, 1946, pp. 426-434. 

Percival, A. J., and Gross, G. B. "Job Evaluation — A Case History," Harvard 
Business Review, Boston, Summer, 1946, pp. 466-497. 

Tilov^e, Robert. "Functions and Limitations of Job Evaluation," Personnel, Ameri- 
can Management Association, 330 West 42nd Street, New York 18, January, 
1946, pp. 206-214. 

Viteles, M. S. "A Psychologist Looks at Job Evaluation," Personnel, American 
Management Association, New York, February, 1941. 



43 



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