Milkovich/Newman: Compensation, Ninth EditionMilkovich/Newman: Compensation, Ninth Edition

McGraw-Hill/IrwinMcGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 4Chapter 4Job AnalysisJob Analysis

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Exhibit 4.1: Many Ways to Create Internal StructureExhibit 4.1: Many Ways to Create Internal Structure

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Job AnalysisJob Analysis

The systematic process of collecting information that identifies similarities and differences in the work.

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Exhibit 4.3: Determining theExhibit 4.3: Determining theInternal Job StructureInternal Job Structure

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Job-Based Approach: Most CommonJob-Based Approach: Most Common Why Perform Job Analysis?Why Perform Job Analysis?

– Potential uses for job analysis have been suggested Potential uses for job analysis have been suggested for every major personnel functionfor every major personnel function Type of job analysis data needed differs by functionType of job analysis data needed differs by function

– Internal structure based on job-related information Internal structure based on job-related information provides a work-related rationale for pay differences provides a work-related rationale for pay differences to both managers and employees to both managers and employees

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Job-Based Approach: Most Common Job-Based Approach: Most Common (cont.)(cont.)

Why Perform Job Analysis? (cont.)Why Perform Job Analysis? (cont.)– In compensation, job analysis has two critical uses: In compensation, job analysis has two critical uses:

Establishes similarities and differences in the work Establishes similarities and differences in the work contents of the jobscontents of the jobs

Helps establish an internally fair and aligned job structureHelps establish an internally fair and aligned job structure

Key issue for compensation decision makers:Key issue for compensation decision makers:– Ensuring that data collected are useful and Ensuring that data collected are useful and

acceptable to employees and managers involvedacceptable to employees and managers involved

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Exhibit 4.5: Conventional Job Analysis ProceduresExhibit 4.5: Conventional Job Analysis Procedures

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Judging Job AnalysisJudging Job Analysis ReliabilityReliability

– Measure of consistency of results among various Measure of consistency of results among various analysts, various methods, various sources of data, analysts, various methods, various sources of data, or over timeor over time

ValidityValidity– Examines the convergence of results among sources Examines the convergence of results among sources

of data and methodsof data and methods AcceptabilityAcceptability UsefulnessUsefulness

– Practicality of information collectedPracticality of information collected

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A Judgment CallA Judgment Call Work-related information is needed to Work-related information is needed to

determine pay, and differences in work determine pay, and differences in work determine pay differences determine pay differences –– no satisfactory no satisfactory substitutesubstitute

Real issue should be:Real issue should be:– ““How much detail is needed to make these pay How much detail is needed to make these pay

decisions?”decisions?”