Cost Effective Job Evaluation

Cost Effective Job Evaluation for Smaller Local Governments

 

Job evaluation plans are a common feature of collective agreements.  As well, the Auditor General for Local Government found the absence of working JE plans a significant risk during the 2016 round of its Human Resources audits of local governments.

The Canadian Human Rights Act has set the standard for expectations to ensure pay equity.  The Act requires jobs to be evaluated based on four categories: skill, responsibility, effort and working conditions.  Another requirement is that all evaluation factors be gender neutral.  That is, a factor cannot apply only to men or to women.

Today, job evaluation plans are generally based on a factor analysis method.  A number of factors are selected that meet the Act requirements.  Typically, skill would include factors like knowledge, learning experience, and complexity/ judgment.  Responsibility is covered by consequence of error, financial responsibility, responsibility for goods, tools, equipment and systems, supervision and contacts.  Working environment deals with working conditions and physical/ mental effort covers effort.

The most common factor analysis method is the point-factor method of job evaluation.  These plans involve rating jobs using a number of factors and selecting from a pick list of “grades” that denote increasing value or weight within each factor.  These translate into points and the aggregate points for all factors determine a job’s placement within a pay scheme.  These plans generally are available from vendors who will work with the organization to tailor their plan – to a degree – to fit the organization.  They tend to be costly, cumbersome and typically require staff resources to administer on an on-going basis.  They can work well in larger organizations.

Smaller local governments – with, say, 40-50 employees – have the option of using a simpler factor method that involves “ranking” jobs; that is, deciding which jobs are greater than, which are comparable to and which are lesser than others.  No points are assigned.  The JE committee members in a smaller organization generally are familiar with all of the jobs and a complex point-factor system isn’t necessary.  The local government can select its factors and define their meaning based on the organization’s values and priorities.

A job evaluation plan must suit the organization and its resources.  In smaller local governments, having a straightforward JE method that is understandable and not overly time-consuming is important.  A plan that is not easy to understand and explain and is hard to administer can collapse under its own weight.

 

The following is an approach for establishing a ranking JE program:

 

  1. Selecting evaluation factors – A typical set of factors are the 10 listed above. Others can be used instead of or added but must align with the Act requirements.  Each factor can have equal weight or some can be identified as being more significant.  The skill factors above often are weightier.  Consequence of error and contacts may be as well.  The JE committee will need to define what each factor means and this will evolve as the committee works through several series of evaluations.  These meanings will be homegrown and unique to the organization.

 

  1. The importance of job descriptions – The job description is the foundation document for the evaluation process. They must be clear in describing the duties of the job and the qualifications – namely, knowledge and learning experience.  The descriptive words are important.  For example “assists with” implies a weaker role than “creates” or “delivers”.  A long shopping list of duties is less helpful than grouping duties into 5 or 6 main functions or “families of duties”.  An example might be grouping all secretarial duties into one paragraph.  See Sections 3.1 and 9.3 of the LGMA’s Human Resources Toolkit for Local Government Organizations, 2nd Edition, for more information on drafting job descriptions.  Also, refer to the writer’s paper on “Integrating Core HR Systems” based on job descriptions.  An important point to remember is ensuring that the supervisor and incumbents both “sign off” the description before it is evaluated.

 

  1. Ranking jobs – This involves creating a worksheet that lists the evaluation factors selected in paragraph 1. and provides space for note taking by the committee. See Exhibit A.  A typical approach when starting a review covering all jobs in the organization is divide them into groups of 3-4 jobs that are similar in duties and pay grade.  An example could be grouping administrative assistants who perform somewhat similar work.  The JE committee would review each job by each factor in turn.  The process involves ranking the jobs on each factor.  Are they essentially the same or are some greater or lesser than the others?  After ranking on each evaluation factor, the committee can determine a ranking hierarchy for the jobs.  This is then done for the other groupings.

 

  1. Selecting benchmark positions – While optional, a useful practice is to select a job from each group that is representative of the group. This allows for comparison across groups in terms of setting up a master job hierarchy.  In the end, it is very helpful to have benchmarks for each pay grade.

 

  1. Merging the hierarchies – In order to prepare a master hierarchy, the committee should select jobs – perhaps the benchmarks – to do ranking across the different groups. This should produce a relative order of jobs from the greatest to least ranking prior to addressing pay.

 

  1. “Sore thumbing” – At every stage of the process, the JE committee should be taking a moment to scan their work for situations that seem “off”. This may require revisiting some of the work to sort out anomalies.

 

  1. Setting pay rates – One of the essentials in proceeding with a JE review is consideration of an acceptable cost of implementation. Implementation may be done at once or phased in over time.  One approach is to attempt to stay with the existing pay plan and move undervalued jobs up to an existing rate based on comparable jobs.  Overvalued jobs typically are afforded some form of pay protection – often until the new rate catches up to the overgrade rate.  A more sophisticated approach is to develop a new pay plan that rationalizes the spread between rates and yet keeps a lid on costs.  This will require using a grid with a number of pay lines to plot the placement of jobs and assess the cost effects.

 

  1. Implementing the plan – As with any change, implementation must be handled carefully. In cases where the union has been fully involved in the development of the JE plan – in some cases in the ranking exercise – an important part of communicating the change should be in hand.  Because a new pay plan will usually upset the existing hierarchy, it is inevitable that there will be some dissatisfaction.  Implementation should include a provision for appeals.

 

  1. Ongoing administration – As a “made in [local government]” plan, the JE committee can operate to maintain the plan and keep it current. New jobs will be created over time and jobs may evolve due to changes in work systems, etc.  A big danger is failing to respond to employee review requests in a timely manner.  An in-house committee can forestall this and prevent loss of credibility.

 

With thanks to Diana M for input to this paper.

Copyright Russell L Cape 2017

 

Exhibit A:

The municipality of [          ]

Job Analysis Worksheet

 

            Job #1                         Job #2                         Job #3                         Job #4

 

Knowledge – foundational, needed to perform complex work and make judgments

Learning experience – relevant experience to competently perform work

Judgment – difficulty with identifying and selecting among options, frequency, independence

Consequence of error – cost impact, damage to reputation

Financial responsibility – authorization of expenditures or payments, budget input

Responsibility for goods, tools and equipment – includes administrative systems, being expert

Supervision of others – work direction to full supervision, numbers

Contacts – provide information, explain, persuade or negotiate

Working environment – discomfort, hazards

Effort – frequently physical, dexterity, can include mental concentration, disruptions, stress