Sunday, 26 March 2017

Compensation Management?


Before reading the compensation management topic,  one should know the impact of compensation system on the organisation and its gravity if it is not managed effectively. First and last word on compensation management is that, it is core and direct influencing factor on employee motivation and other factors succeeds.

Employees, in exchange of their work, generally expect some appreciation. Money is considered as the most important motivating factor for employees, though non-financial incentives work efficiently. The goals of compensation management are to design the lowest-cost pay structure that will attract, motivate and retain competent employees. Here the term compensation and salary of employee are one and same.

Before knowing about Compensation management one must know the labor laws of the country which are governing employees compensation or remuneration system. International Labour Organisation (ILO) made conventions on labour welfare especially on regularly in payment of wages & salaries with minimum pay for stipulated working hours. In accordance with the conventions & recommendations of ILO every country has established labour laws and enforced, who ever contravene them shall be liable for penalty or punishment under serious cases both may be awarded. Naturally judiciary of the concern country is watchdog for dealing labour issues.

India is one of the countries with very high population and stands second in place followed by china. In the India, parliament has enforced four key laws on wages of workers that are Payment of wages act 1936 and Minimum wages act 1948 for the purpose of ensuring minimum payment for particular type of jobs in different sectors and industries according to stipulated working hours prescribed by the law.  Normally eight hours is  stipulated working time in almost all countries,  above stipulated time if any worker is made to work, his employers has to compulsory pay overtime,  if not it shall be treated as unlawful by the court of law for which it may impose penalty. Other side of coin it may create serious dissatisfaction among workers and make them feel that they are  being exploited which may lead to  agitations eventually may lead strikes which is ultimate weapon in hands of workers,  ultimately organisations may chose for lockout which is the weapon in  hands of employers altogether may create industrial disputes. On this law may support worker agitation for not complying payment of wages by their employer in accordance with wage laws and in some cases law may support employer if workers agitation causes serious damages to organisation. 

The third key law is workmen's compensation act 1923, the primary objective of this law is to have any compensation by an employee from his employer if any accident occurs, which make permanent are partial disablement. This law defines under schedules various types of accidents certain to happen to worker and percentage of compensation paid to him in accordance with his age.

The fourth key law is Equal Remuneration Act, 1976, according to the section 4 it is the  DUTY OF EMPLOYER TO PAY EQUAL REMUNERATION TO MEN AND WOMEN WORKERS FOR SAME WORK OR WORK OF A SIMILAR NATURE. According to Section 3, a settlement arrived at between the management and the employees cannot be a valid ground for effecting discrimination in payment of remuneration between male and female employees performing the same work or work of a similar nature; Mackinnon Mackenzie and Co. v. Audrey D’ Costa, (1987) 2 SCC 469.
"The most important thing is to note that compensation plays a major role in attracting talent from the market and compensation system of the organisation is Key factor for creating employer brand, which is most important factor for attracting talent people. Having talent people for the organisation is a major asset for the organisation development"

Importance of employees compensation or reward system 
  • Compensation or reward system of the organisation is most influencing factor for employee motivation, must remember.
  • If we observe history of causes of industrial disputes, employee compensation a reward system issues were the main reason in most cases.
  • good compensation system of rewards system in the organisation will minimise industrial disputes and helps in maintaining peace and harmony within the organisation.
  • Compensation system plays a key role in employee attrition.
  • Compensation system mostly influences retention of employee in the organisation.
  • Most of employee satisfaction depends upon compensation a reward system of organisation.
  • Effective compensation system builds employer brand, which plays a key role in attracting talent.
  • Effective compensation system makes employee to put his full efforts for achievement of organisation's goals and objectives.
  • Effective compensation system builds initiative towards work, which in turn enhances the productivity of organisation.
  • Effective compensation makes employees feel belongingness towards the organisation.
The HR Compensation Analyst assists with producing the organization's compensation program. Their primary responsibility is the research and study to determine appropriate employee compensation. In addition, they evaluate predicted market trends, recommend revisions to company compensation plans, review job descriptions, and assist the Compensation Manager.

The HR Compensation Manager
directs the organization's compensation program. Their responsibilities include developing job descriptions, analyzing jobs, conducting salary surveys and job evaluations, and establishing a salary structure. They suggest revisions to the compensation plan and procedures, administer bonus and incentive programs, and manage the performance appraisal system.


Compensation: an overview

Compensation management is one of the most challenging human resource areas because it contains many elements and has a far-reaching effect on the organisation's goals. The purpose of providing compensation is to attract, retain and motivate employees. There are two main types of financial compensation.
  1. Direct financial compensation - the pay that a worker receives as wages, salaries, commissions and bonuses, and
  2. Indirect financial compensation - all financial rewards that are not included in direct compensation (i.e. benefits).
An example of direct financial compensation is the money the worker receives as wages at the end of the week, or as a salary paid at the end of the month. Many companies pay salaries straight into the employee's bank account.

An example of indirect financial compensation is when the company contributes to an employee's housing subsidy or a pension plan.

Not all compensation is financial. A worker can get great satisfaction from his work and enjoy the environment in which he works. This is called non-financial compensation and cannot be counted in terms of money. For example, a veterinarian might enjoy working outside, going to farms to treat animals and deliver calves. A publisher might enjoy the challenge of producing books that will enrich people's lives.

It is not always possible to provide a perfect pay package (the agreement between the organisation and the employee about how much money and other benefits the employee will receive). Because of this, some companies allow their employees to work out their own compensation packages.


India: Central government employees draw more salary along with benefits than state government employees, compared with private sector employees. There is a particular pay structure fixed for every government employee in India which is not in private companies. The pay structure of government employees in India is as follows

Employee salaryBasic pay + Grade pay + Dearness Allowance (DA) + House Rent Allowance (HRA) + City Compensatory Allowance (CCA)

The details of above said components of salary of government employees are as follows.
  • Basic pay: The primary component of employee salary which is bases for calculation of other components in the employee salary.
  • Grade pay: An amount which is fixed by the government on the range of employee in government hierarchy. (for example; Group A officers have high grade pay than Group B officers.)
  • Dearness Allowance: Certain percentage of the amount on basic pay. This percentage varies from state government to Central government employees. An allowance paid to employees on the basis of consumer Price index. Consumer price index denotes the cost of the products which influences by the inflation. (in simple terms cost of living) At present, 41%  is for state government employees and 72 % is for Central government employees as dearness allowance on their basic pay.
  • House Rent Allowance (HRA): Certain percentage of the amount on basic pay. This percentage varies from state government to Central government employees. This allowance is paid to employees are meeting house rent expenditure.
  • City Compensatory Allowance (CCA): An allowance paid according to the city or town where employee do the job and the purpose of this allowance is to compensate high cost of living especially in cities like Mumbai, Delhi, Calcutta and Hyderabad et cetera . Government decides the amount of allowance to be paid to employees on basis of city or town.


Objective of Compensation

The objective of the compensation function is to create a system of rewards that is equitable to the employer and employee alike. The desired outcome is an employee who is attracted to the work and motivated to do a good job for the employer. Patton suggests that in compensation policy there are seven criteria for effective­ness. Compensation should be:

  1. Adequate Minimal governmental, union, and managerial levels should be met.
  2. Equitable Each person should be paid fairly, in line with his or her effort, abilities, and training.
  3. Balanced Pay, benefits, and other rewards should provide a reasonable total reward package.
  4. Cost-effective Pay should not be excessive, considering what the organization can afford to pay.
  5. Secure Pay should be enough to help an employee feel secure and aid him or her in satisfying basic needs.
  6. Incentive-providing Pay should motivate effective and productive work.
  7. Acceptable to the employee The employee should understand the pay system and feel it is a reasonable system for the enterprise and himself or herself.

13 tech jobs that pay at least $130,000

There's little doubt that technology-related jobs, whether building software or managing a network, are in demand and pay well.
But it's also a fact that wages differ from state to state. And it is no different in the US. Salaries are higher in places like San Francisco, New York, and Boston than they are in other parts of the US, which skews the data a bit.Tech recruiting specialist Mondo recently published a report on the highest-paid tech jobs with salary ranges, reflecting regional differences in pay, with areas like NYC/San Francisco on the high end and areas like Florida/Dallas on the low end.

Here's are 13 tech jobs according to Mondo's listing which will help you earn at least $130,000.

Chief security officer: Up to $214,000
This person is responsible for protecting an organization from hackers and other security-related breaches.The job includes buying and installing computer security products, ensuring corporate apps don't have holes, doing forensics if a problem occurs, and so on. The professionals are generally paid well, for, millions of dollars can be at stake.

Chief data officer: Up to $200,000

Collecting, storing and analyzing loads of data is rage these days in companies both big and small. This person would lead a team of data scientists that could span across IT, marketing, and business functions.

VP, information technology: Up to $178,000
This person usually heads the internal tech team and may report to a chief information officer, or maybe the top IT exec at the company.

VP, engineering: Up to $177,000
This person would run the teams of software or hardware engineers who develop products.This is a title often used at tech companies, however, many enterprises too develop custom IT projects and this person could also be leading those efforts.
Director, PMO: Up to $177,000
A director of project management/program management is the person in charge of a particular tech project or an ongoing program.This may involve managing an interdisciplinary team of engineers, marketeers and business people.

Scala developer: Up to $177,000
A computer programmer with Scala language skills is a hot commodity these days. Scala is a web development language that is an alternative to the popular (but old) language Java.

Application architect: Up to $175,000

An application architect is someone who helps engineers large, complex software programmes with lots of moving parts.

iOS developer: Up to $174,000
An iOS developer writes mobile apps for Apple devices, the iPhone and iPad.Every company in the world these days is looking to reach iPhone and iPad users.

VP, infrastructure: Up to $173,000
A vice president of infrastructure runs the team of people that handle a company's computer hardware: servers, network, storage, and other data center tech.

Android developer: Up to $173,000
An Android developer writes mobile apps for Android devices. Nearly all companies, from your health club to Fortune 500 companies, are writing their own mobile apps.

UI/UX designer: Up to $172,000
A user interface or user experience designer is the person who designs how a person uses a product. He helps answer questions like: Is the product easy to figure out? Will users be able to find all the features? This designer is also often responsible for the aesthetic look of the product.

BI developer: Up to $171,000
A business intelligence developer is a programmer who specializes in writing database apps that help businesses analyze data. This field has exploded with the Big Data craze. There are now lot of methods to cheaply collect and store vast amount of data. However, these have little use unless there are business intelligence apps that can analyse all that data.

IS security manager: Up to $169,000
An information systems security manager is responsible for making sure that networks, servers and apps remain safe from hackers. This may be the top security position in a small company or, in a large one, this person may report to a chief security officer.

Job evaluation is the process of analyzing and assessing various jobs systematically to ascertain their relative worth in an organization.

Job evaluation is an assessment of the relative worth of various jobs on the basis of a consistent set of job and personal factors, such as qualifications and skills required.

The objective of job evaluation is to determine which jobs should get more pay than others. Several methods such as job ranking, job grading, and factor comparison are employed in job evaluation. Research indicates, however, that each method is nearly as accurate and reliable as the other in ranking and pricing different jobs. Job evaluation forms the basis for wage and salary negotiations.
--------businessdictionary.com
Background of Job Evaluation
Job evaluation developed out of civil service classification practices and some early employer job and pay classification systems. Whether formal job evaluation began with the United States Civil Service Commission in 1871 or with Frederick W. Taylor in 1881, it is now over 120 years old and still of great value. The first point system was developed in the 1920s. Employer associations have contributed greatly to the adoption of certain plans. The spread of unionism has influenced the installation of job evaluation in that employers gave more attention to rationalized wage structures as unionism advanced. During World War II, the National War Labor Board encouraged the expansion of job evaluation as a method of reducing wage inequities.
As organizations became larger and larger and more bureaucratized the need for a rational system of paying employees became evident. Wage structures became more complex and needed some way to bring order to the chaos perpetuated by supervisors setting pay rates for their employees on their own. Job evaluation became a major part of the answer. The techniques and processes of job evaluation were developed and perfected during this time period of the late 1950s.

With the advent of the Civil Rights movement, job evaluation literally got written into the law. The Equal Pay Act of 1963 required jobs to be compared on the basis of skill, effort, and responsibility to determine if they were or were not equal. A 1979 study of job evaluation, as a potential source of and/or a potential solution to sex discrimination in pay, was made by the National Research Council under a contract from the Equal Employment Opportunity Commission. The study suggested that jobs held predominantly by women and minorities could be undervalued. Such discrimination resulted from the use of different plans for different employee groups, from the compensable factors employed, from the weights assigned to factors, and from the stereotypes associated with jobs. Although the preliminary report failed to take a position on job evaluation, the final report concluded that job evaluation holds some potential for solving problems of discrimination.
Definitions of Job Evaluation


Below are given some important definitions of job analysis:

Job Evaluation involves determination of relative worth of each job for the purpose of establishing wage and salary differentials. Relative worth is determined mainly on the basis of Job Description and Job Specification only. Job Evaluation helps to determine wages and salary grades for all jobs. Employees need to be compensated depending on the grades of jobs they perform. Remuneration must be based on the relative worth of each job. Ignoring this basic principle results in inequitable compensation and attendant ill effects on employees’ morale. A perception of inequity is a sure way of De-motivating an employee.

  • In the words of Edwin B. Flippo. "Job evaluation is a systematic and orderly process of determining the worth of a job in relation to other jobs."
  • According to Kimball and Kimball Jr., "Job evaluation represents an effort to determine the relative value of every job in a plant and to determine what the fair basic wage for such a job should be."
  • According to Bethel, Atwater and Smith et at, "Job evaluation as a personal term has both a specific and genetic meaning specifically, it means job rating or the grading of occupations in terms of duties ; generally it means the entire field of wages and salary administration along modern lines"
  • According to International Labour Organisation, "Job evaluation may be defined as an attempt to determine and compare the demands which the normal performance of particular job makes on normal workers without taking account of the individual abilities or performance of the workers concerned."
  • In the words of Dale Yoder, "Job evaluation is a practice which seeks to provide a degree of objectivity in measuring the comparative value of jobs within an organisation and among similar organisations."
  • According to Bureau of Labour Statistics, "Job evaluation is the evaluation or rating of job to determine their position in job hierarchy. The evaluation may be achievement through asssignment of points or the use of some other systematic rating method for essential job requirements such as skill, experience and responsibility."

Jobs are evaluated on the basis of content and placed in order of importance. This establishes Job Hierarchies, which becomes the basis for satisfactory wage differentials among various jobs. Jobs are ranked (not jobholders)

Facts [+]

A commonly used job evaluation method is the paired comparison evaluation system. The paired comparison system compares each job within a company with every other job within the company. A job's resulting score is determined from the comparisons. The jobs are then ranked by score.



THE JOB EVALUATION PROCESS

Job analysis describes a job. Job evaluation develops a plan for comparing jobs in terms of those things the organization considers important determinants of job worth. This process involves a number of steps that will be briefly stated here and then discussed more fully.
  1. Job Analysis. The first step is a study of the jobs in the organization. Through job analysis, information on job content is obtained, together with an appreciation of worker requirements for successful performance of the job. This information is recorded in the precise, consistent language of a job description. This was the topic of chapter 10.
  2. Compensable Factors. The next step is deciding what the organization "is paying for" -- that is, what factor or factors place one job at a higher level in the job hierarchy than another. These compensable factors are the yardsticks used to determine the relative position of jobs. In a sense, choosing compensable factors is the heart of job evaluation. Not only do these factors place jobs in the organization's job hierarchy, but they also serve to inform job incumbents which contributions are rewarded.
  3. Developing the Method. The third step in job evaluation is to select a method of appraising the organization's jobs according to the factor(s) chosen. The method should permit consistent placement of the organization's jobs containing more of the factors higher in the job hierarchy, than those jobs lower in the hierarchy.
  4. Job Structure. The fourth step is comparing jobs to develop a job structure. This involves choosing and assigning decision makers, reaching and recording decisions, and setting up the job hierarchy.
  5. Wage Structure. The final step is pricing the job structure to arrive at a wage structure.

Features of Job Evaluation

The primary objective of job evaluation is to find out the value of work, but this is a value which varies from time to time and from place to place under the influence of certain economic pressure, not least of which is the worth of money itself. The main features of job evaluations are:
  • To supply bases for wage negotiation founded on facts rather than on vague intermediate ideas.
  • It attempts to assess jobs, not people.
  • Job evaluation is the output provided by job analysis.
  • Job evaluation does not design wage structure, it helps in rationalising the system by reducing number of separate and different rates.
  • Job evaluation is not made by individuals rather it is done by group of experts.
  • Job evaluation determines the value of job. Further the value of each of the aspects such as skill and responsibility levels are also related and studied in connection with the job.
  • Job evaluation helps the management to maintain high levels of employee productivity and employee satisfaction.

The objectives of job evaluation
  • To establish an orderly, rational, systematic structure of jobs based on their worth to the organization.
  • To justify an existing pay rate structure or to develop one that provides for internal equity.
  • To assist in setting pay rates that are comparable to those of in similar jobs in other organizations to compete in market place for best talent.
  • To provide a rational basis for negotiating pay rates when bargaining collectively with a recognized union.
  • To ensure the fair and equitable compensation of employees in relation to their duties.
  • To ensure equity in pay for jobs of similar skill, effort, responsibility and working conditions by using a system that consistently and accurately assesses differences in relative value among jobs and
  • To establish a framework of procedures to determine the grade levels and the consequent salary range for new jobs or jobs which have evolved and changed.
  • To identify a ladder of progression for future movement to all employees interested in improving their compensation.
  • To comply with equal pay legislation and regulations determining pay differences according to job content.
  • To develop a base for merit or pay-for-performance.


Advantages of Job evaluation
Job evaluation is a process of determining the relative worth of a job. It is a process which is helpful even for framing compensation plans by the personnel manager. Job evaluation as a process is advantageous to a company in many ways:
  1. Reduction in inequalities in salary structure - It is found that people and their motivation is dependent upon how well they are being paid. Therefore the main objective of job evaluation is to have external and internal consistency in salary structure so that inequalities in salaries are reduced.
  2. Specialization - Because of division of labour and thereby specialization, a large number of enterprises have got hundred jobs and many employees to perform them. Therefore, an attempt should be made to define a job and thereby fix salaries for it. This is possible only through job evaluation.
  3. Helps in selection of employees - The job evaluation information can be helpful at the time of selection of candidates. The factors that are determined for job evaluation can be taken into account while selecting the employees.
  4. Harmonious relationship between employees and manager - Through job evaluation, harmonious and congenial relations can be maintained between employees and management, so that all kinds of salaries controversies can be minimized.
  5. Standardization - The process of determining the salary differentials for different jobs become standardized through job evaluation. This helps in bringing uniformity into salary structure.
  6. Relevance of new jobs - Through job evaluation, one can understand the relative value of new jobs in a concern.


Limitations:
  1. Though there are many ways of applying job evaluation in a flexible manner, rapid changes in technology and in the supply of and demand for particular skills, create problems of adjustment that may need further study.
  2. When job evaluation results in substantial changes in the existing wage structure, the possibility of implementing these changes in a relatively short period may be restricted by the financial limits within which the firm has to operate.
  3. When there are a large proportion of incentive workers, it may be difficult to maintain a reasonable and acceptable structure of relative earnings.
  4. The process of job rating is, to some extent, inexact because some of the factors and degrees can be measured with accuracy.
  5. Job evaluation takes a long time to complete, requires specialized technical personnel and is quite expensive.


JOB EVALUATION METHODS

After job analysis preparations of job descriptions comes the essential stage of job evaluation, namely, the systematic comparison of jobs in order to establish a job hierarchy. The techniques which have been commonly used tend to fall into one of the two main categories:
Non-analytical or Non-quantitative or summary methods
Analytical or quantitative methods.

Qualitative methods are:
  1. Job Ranking
  2. Job Classification or grading
Quantitative methods are:
  1. Factor Comparison
  2. Point rating or assessment

Job

Job Descriptions and Job Specifications

Job Descriptions
Job description -where the details regarding the job are given.
  • It is a list of job duties, responsibilities,reporting, relationships, working conditions and supervisory responsibilities - one product of the job analysis --- Gary Dessler
  • Job description is a broad, general, and written statement of a specific job, based on the findings of a job analysis. It generally includes duties, purpose, responsibilities, scope, and working conditions of a job along with the job's title, and the name or designation of the person to whom the employee reports. Job description usually forms the basis of job specification.

    Capture all key aspects of your education, work experience and achievements in your profile, says Judhajit Das, chief HR, ICICI Prudential Life Insurance. "It helps if you write detailed job descriptions as it makes it that much easier to be spotted by a prospective headhunter," he says.

Job Description practical application and use in legal issues.
Above mentioned notes is one side of the coin. The other side of the coin has to be known that is need to provide job description document to every employee in the organisation.

Every employee must be provided with his job description as to how to perform his duties, limitations or boundaries in his duties, to whom he has to report and answerable, code of conduct, punctuality and discipline and safety procedure that is to be followed in case of Performing hazardous jobs. (This practice is being followed by few organisations in United States ) Having a job description document with employee, helps employer in dealing with employees especially in the circumstances when an employee proceed legally against employer for rejecting his/her claiming of compensation  for the accident happened during the course of employment or for taking disciplinary action against  employees who committed wrong.

Circumstances could be like; employees especially who does hazardous jobs, must follow safety measures which are framed by the safety officer to avoid accidents. To those  employees if any accident happens, he may claim for compensation on the statutory grounds framed by the Legislature. Here it is the task of HR manager to crosscheck with actual safety measures to be followed and safety measures followed at the time of occurrence of accident. If it is found that the victim did not follow actual safety measures to be followed, he may not be eligible to claim the compensation. The victim of accident cannot claim that he was not aware of safety measures to be followed while performing such job, since he was already provided with job description document having all details of his job as to how to be in his job. if it is found that the victim followed actual and safety measures to be followed, the victim has right to claim compensation in accordance with the statutory provisions framed by the Legislature (labour laws). (In India, Workmen's Compensation Act, 1923 is the law that deals with claiming of conversation by employees who succumbed to accident during the course of their employment)

likewise; when an employee proceed legally against employer for taking disciplinary action against employee, it is a task of HR manager to crosschecks with predefined in-disciplinary activities mentioned in the job description which was already provided to that employee. 

Job Specifications; 
John specification is a statement in which we explain the qualities required by people applying for the job.
  • Job specification as a statement of minimum qualification that person must posses to perform a given job successfully --- Stephen. P . Robbins & Marry Coutler
  • Job specification is a statement of employee characteristics and qualifications required for satisfactory performance of defined duties and tasks comprising a specific job or function. Job specification is derived from job analysis.
While the job description describes activities to be done, it is job specifications that list the knowledge, skills, and abilities an individual needs to perform a job satisfactorily. Knowledge, skills, and abilities (KSAs) include education, experience, work skill requirements, personal abilities, and mental and physical requirements. Job specifications for a data entry operator might include a required educational level, a certain number of months of experience, a typing ability of 60 words per minute, a high degree of visual concentration, and ability to work under time pressure. It is important to note that accurate job specifications identify what KSAs a person needs to do the job, not necessarily what qualifications the current employee possesses.

It can be explained with the help of the following diagram




Components of a Job Specification

Experience: Number of years of experience in the job you are seeking to fill. Number of years of work experience required for the selected candidate. Note whether the position requires progressively more complex and responsible experience, and supervisory or managerial experience.

Education: State what degrees, training, or certifications are required for the position.

Required Skills, Knowledge and Characteristics: State the skills, knowledge, and personal characteristics of individuals who have successfully performed this job. Or, use the job analysis data to determine the attributes you need from your “ideal” candidate. Your recruiting planning meeting or email participants can also help determine these requirements for the job specification.

Facts [+]

Workers holding a bachelor's degree who make less than $19,800 a year are considered "overqualified." Nearly eight percent of U.S. residents are considered overqualified, according to a recent Migration Policy Institute study of Census Bureau data. This compares to nearly 24 percent of foreign-born, non-citizen residents that are considered overqualified.
A person who is going out to find a job will always have in his mind the qualities and set of skills he has, and also the work experience he acquired and the educational background that he has taken on his college years. With this sets of skills, talents, education and experience he has, an applicant will now have a basis for his job search. A company is approached and an application letter is written when he or she is looking only for a job vacancy which is offering to hire a person with the set of skills he already has.Because these sets of skills and experiences are the only tools he has to offer to any company or corporations he or she is willing to apply to.

Job specifications are very essential and important to every job applicant and for the hiring company to have. The job's basis which the company will be offering and nothing more will be set by this. Job specifications will set the basis for the career descriptions of an employee or applicant within the company's area of responsibilities or operations. Because of improper notification or advertisement of a job specification, almost the targeted applicants get confused and the company will lose the much needed manpower. And without the proper job specifications, an employee will have no basis for his work and will be unproductive because he is unfocused and have no proper guidelines.

A job's specifications will help the company gain the much needed manpower to boosts the company's productivity. The job responsibilities of every employee or applicant of the company basis will be laid by this.A company will save more time by having to process only those applications from applicants who are only qualified with job specifications given clearly to applicants and job seekers. And saving time will also mean saving the company much needed financial resources which are scarce these days.

Applicants and employees will have insights on their respective job duties with clear job specifications and will never have to overlap each other, which will create chaos within the company and will cause great losses for the company either in company time, or company resources. By clearly laying down the job duties in front of them, applicants and employees will know what they are supposed to do for the company's operation and can set out their plans and goals on how to help the company without overlapping with one another's job. Job specifications are the most important tool for the company to have when it comes to employee or human resource management. The valuables to a company's success and the success of every employee and job seeker are the company time, manpower and other resources which are saved by it. 
What Is a Job?

A group of homogeneous tasks related by similarity of functions.

When performed by an employee in an exchange for pay, a job consists of duties, responsibilities, and tasks (performance elements) that are (1) defined and specific, and (2) can be accomplished, quantified, measured, and rated. From a wider perspective, a job is synonymous with a role and includes the physical and social aspects of a work environment. Often, individuals identify themselves with their job or role (foreman, supervisor, engineer, etc.) and derive motivation from its uniqueness or usefulness.

Job Analysis

Job analysis, contains a simple term called "analysis", which means detailed study or examination of something (job) in order to understand more about it (job). therefore job analysis is  to understand more about a specific job in order to optimise it. Job analysis is a systematic process of collecting complete information pertaining to a job. Job analysis is done by job analyst who is an officer have been trained for it.

Job analysis is a procedure through which you determine the duties and responsibilities, nature of the jobs and finally to decide qualifications, skills and knowledge to be required for an employee to perform particular job. Job analysis helps to understand what tasks are important and how they are carried on. Job analysis forms basis for later HR activities such as developing effective training program, selection of employees, setting up of performance standards and assessment of employees ( performance appraisal)and employee remuneration system or compensation plan.

One of the first industrial-organizational psychologists to introduce job analysis was Morris Viteles. In 1922, he used job analysis in order to select employees for a trolley car company. Refernce:http://en.wikipedia.org/wiki/Job_analysis.

The intention behind job analysis is to answer questions such as:
  • what is the need of the job to exist?
  • What physical and mental activities does the worker undertake?
  • When is the job to be performed?
  • Where is the job to be performed?
  • How does the job performed by an employee?
  • What qualities and qualifications are required to perform the job?

Job analysis is a detailed examination of
(1) tasks  that make up a job (employee role),
(2) conditions under which an employee performing his/her job, and
(3) what exactly a job requires in terms of aptitudes (potential for achievement), attitudes (behavior characteristics), knowledge, skills, educational qualifications and the physical working condition of the employee.

Its objectives include 
(a) to determine most effective methods for performing a job.
(b) to increase employee job satisfaction.
(c) to identify core areas for giving training to employees and to find out best methods of training.
(d) development of performance measurement systems, and
(e) to match job-specifications with  employee specifications while selection of an employee.


Definitions of Job Analysis

Some important definitions of job-analysis are as under :

Harry L. Wylie. "Job analysis deals with the anatomy of the job.....This is the complete study of the job embodying every known and determinable factor, including the duties and responsibilities involved in its performance; the conditions under which performance is carried on; the nature of the task; the qualifications required in the worker; and the conditions of employment such as pay, hours, opportunities and privileges"

In the words of Dale Yoder. "A Job is a collection of duties, tasks and responsibilities which are assigned to an individual and which is different from other assignment"

According to Michael J. Jucius, "Job analysis refers to the process of studying the operations, duties and organisational aspects of jobs in order to derive specification or, as they are called by some job description"

In the words of Edwin B. Flippo, "Job analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job "

According to Blum, "A job analysis is an accurate study of the various components of a job. It is concerned not only with an analysis of the duties and conditions of work, but also with the individual qualifications of the worker."

According to John A Shubin "Job analysis is the methodical compilation and study of work data in order to define and characterise each occupation in such a manner as to distinguish it from all others."

In the words of Scott, Clothier and Spriegel, "Job analysis is the process of critically evaluating the operations, duties and relationship of the job."

In simple words Job analysis is a formal programme which examines the tasks, duties and responsibilities contained in an individual unit of work.

Before the recruitment process, job analysis takes place.


Job Descriptions and Job Specifications >>

Facts [+]

The U.S. Department of Labor publishes The Occupational Outlook Handbook every two years. The handbook is a nationally recognized source of career information for hundreds of various jobs. Information subjects include required job training and education, earnings, expected job prospects, what workers do on the job, and working conditions.

PROCEDURE FOR JOB ANALYSIS
Job analysis is done by using two approaches one is work oriented approach and second one is employee oriented approach
1. work oriented approach
this approach focus on the actual task involved in a Job. this approach mainly concentrate on duties, functions and responsibilities involved in a job
Example
Job of court manager at Courts (judiciary), task oriented approach of job analysis statement include
  • The Court Manager shall function under the control and guidance of the Chief Justice in the High Court, and the District Judge in the respective district Courts.
  • He shall work on policies and standards, based on applicable directives of superior Courts, establish the performance standards applicable to the Court (including on timeliness, efficiency; quality of Court performance; infrastructure; and human resources; access to justice; as well as for systems for Court management and case management.
  • He will carry out an evaluation of the compliance of the directives of the Court with such standards; identify deficiencies and deviations; identify steps required to achieve compliance, maintain such an evaluation on a current basis through annual updates.
  • He will in consonance with the rules and policies of the court and in consultation with the stakeholders of the Court including litigants, the Bar, ministerial staff, Executive Agencies supporting judicial functions such as prosecutors/police/ process service agencies prepare, submit and update annually a 5-year court-wise Court Development Plan (CDP), for approval of the court.
  • He will monitor the implementation of the approved CDP and report to the District Judge and the High Court with the progress.
  • He will ensure that statistics on all aspects of the functioning of the Court are complied and reported accurately and promptly in accordance with systems established by the High Court.
  • He will ensure that reports on statistics are duly completed and provided as required.
  • He will ensure that the processes, procedures, policies and standards established by the High Court for Court Management are complied with and that they safeguard quality, ensure efficiency and timeliness and minimize costs to litigants and to the State; and enhance access to justice.
  • He will ensure that case management systems are fully compliant with the policies and standards established by the High Court for case management and that they address the legitimate needs of litigants in terms of quality, efficiency and timeliness, costs to litigants and to the State. Standard systems for case management shall be developed by the High Court time to time.
  • He will ensure that the Court meets standards established by the High Court on access to justice, legal aid, alternative dispute mechanisms and are user friendly.
  • He will ensure that the Court meets quality of adjudication standards established by the High Court.
  • He will ensure that Human Resource Management of ministerial staff in the court comply with the Human Resource Management standards established by the High Court.
  • He will ensure that the core systems of the court are established and function effectively (documentation management;utilities management; infrastructure and facilities management; financial systems management (audits, accounts, payments);
  • He will ensure that the IT systems of the court comply with standards established by the High Court and are fully functional.
  • He will feed the proposed National Arrears Grid to be set up to monitor the disposal of cases in all the Courts, as and when it is set up.
  • The Court Manager shall be responsible in implementation, managing data entry initiation, services roll-out and monitoring of the e-Court Project in the respective Districts/High Court.
  • (xviii) He shall perform all other administrative functions and duties as may be assigned by the Chief Justice in the High Court and the District Judge in the District Court from time to time.
  • (xix) He shall report to the Chief Justice/ District Judge or any other Judge/ officer nominated by the Chief Justice/ District Judge and shall perform the duties as assigned to him from time to time.
2. Employee oriented approach
this approach focus on examining of human attributes needed to perform the job perfectly. human attributes have been classified into knowledge, skills, attitude and other characteristics. Knowledge is the information people need in order to perform the job. Skills are the proficiencies needed to perform each task. Abilities are the attributes that are relatively stable over time. Other characteristics are all other attributes, usually personality factors.

Example
  • The Court Manager shall have M.B.A. Degree or Advanced Diploma in General Management from a recognised University/institution of India.
  • He shall have minimum 10 years experience in the field of management, experience/training in I.T Systems Management, H.R.Management, Financial Systems Management.
  • He shall not be more than 40 years of age.
  • He should have excellent communication skills.
  • He should have excellent Computer application skills.


Importance of Job Analysis
Job analysis helps in analyzing the resources and establishing the strategies to accomplish the business goals and strategic objectives. Effectively developed, employee job descriptions are communication tools that are significant in an organization's success.
The main purpose of conducting job analysis is to prepare job description and job specification which would help to hire skilled workforce. Job description is a statement of information about duties and responsibilities of a particular job. whereas job specifications is a statement of information about qualifications, special qualities, skills and knowledge required for an employee to fit for a job. Therefore job analysis enables recruiter/employer to have a deep insight of a job, with that, recruiter can easily track candidates who have required qualifications and qualities to perform a job.
Job Analysis can be used to identify areas where an employee needs training, since job analysis make it clear  to understand about core duties and responsibilities of a job. Besides, it provides information to develop  suitable training material for a job to be performed by an employee after completion of his training.
Compensation management/salary administration is one of core  HR functions. salary for a job is decided on  skill level required, duties and responsibilities, qualification and experience level/seniority, altogether, called as compensable factors, which could be known by job analysis only. But there is a separate method to determine value of job that is called as job evaluation which is part of job analysis.  Job evaluation is process of valuing or determining how much is to be paid for a job. Job evaluation is mainly used when a specific job or a single job is to be evaluated or when there are different jobs in same Cader, or when there jobs based on projects or piecework. However job analysis has its own  importance in concluding compensation/remuneration/ salary of an employee.
No organisation exists without goals and objectives to achieve, performance standards to be maintained by every employee and reviewing performance of employees. These could be cross checked with outcome of job analysis of a job, whether outcome of job analysis of a job is in tune with goals and objectives of an organisation or not, performance standards are being maintained or not and reviewing employee performance based on performance standards or not.
Job Analysis can be used in performance review to identify or develop goals and objectives, performance standards, evaluation criteria, length of probationary periods, and duties to be evaluated
An ideal job analysis should include
below listed are areas where job analyst should focus to bring out facts about a job.
Duties and Tasks: The basic unit of a job is the performance of specific tasks and duties. This segment should include frequency, duration, effort, skill, complexity, equipment, standards, etc.
Environment: This segment identifies the working environment of a particular job. This may have a significant impact on the physical requirements to be able to perform a job.
Tools and Equipment: Some duties and tasks are performed using specific equipment and tools. These items need to be specified in a Job Analysis.
Relationships: The hierarchy of the organization must be clearly laid out. The employees should know who is under them and who they have to report to.
Requirements: The knowledge, skills, and abilities required to perform the job should be clearly listed.
There are several ways to conduct a job analysis, including: interviews with incumbents and supervisors, questionnaires (structured, open-ended, or both), observation, critical incident investigations, and gathering background information such as duty statements or classification specifications.
The following are the benefits of job analysis. 


  1. Organizational structure and design :- Job analysis helps the organization to make suitable changes in the organizational structure, so that it matches the needs and requirements of the organization. Duties are either added or deleted from the job.
  2. Recruitment and selection :-Job analysis provides information about what the job entails and what human characteristics are required to perform these activities. This information, in the form of job descriptions and specifications, helps management decide what sort of people to recruit and hire.
  3. Performance appraisal and training/development :- Based on the job requirements identified in the job analysis, the company decides a training program. Training is given in those areas which will help to improve the performance on the job. Similarly when appraisal is conducted we check whether the employee is able to work in a manner in which we require him to do the job.
  4. Job evaluation :- Job evaluation refers to studying in detail the job performance by all individual. The difficulty level
  5. s, skills required and on that basis the salary is fixed. Information regarding qualities required, skilled levels, difficulty levels are obtained from job analysis.
  6. Promotions and transfer :- When we give a promotion to an employee we need to promote him on the basis of the skill and talent required for the future job. Similarly when we transfer an employee to another branch the job must be very similar to what he has done before. To take these decisions we collect information from job analysis.
  7. Career path planning :- Many companies have not taken up career planning for their employees. This is done to prevent the employee from leaving the company. When we plan the future career of the employee, information will be collected from job analysis. Hence job analysis becomes important or advantageous.
  8. Labour relations :- When companies plan to add extra duties or delete certain duties from a job, they require the help of job analysis, when this activity is systematically done using job analysis the number of problems with union members reduce and labour relations will improve.
  9. Health and safety :- Most companies prepare their own health and safety, plans and programs based on job analysis. From the job analysis company identifies the risk factor on the job and based on the risk factor safety equipments are provided.
  10. Acceptance of job offer :- When a person is given an offer/appointment letter the duties to be performed by him are clearly mentioned in it, this information is collected from job analysis, which is why job analysis becomes important. Job analysis information can be gathered in a variety of ways. One consideration is who is to conduct the job analysis. Most frequently, a member of the HR staff coordinates this effort. Depending on which of the methods discussed next is used, others who often participate are managers, supervisors, and employees doing the jobs. For more complex analyses, industrial engineers may conduct time and motion studies.

    Another consideration is the method to be used. Common methods are observations, interviews, questionnaires, and specialized methods of analysis. Combinations of these approaches frequently are used, depending on the situation and the organization. Each of these methods is discussed in some detail next.


    Observation

    When the observation method is used, a manager, job analyst, or industrial engineer observes the individual performing the job and takes notes to describe the tasks and duties performed. Observation may be continuous or based on intermittent sampling.

    Use of the observation method is limited because many jobs do not have complete and easily observed job duties or complete job cycles. Thus, observation may be more useful for repetitive jobs and in conjunction with other methods. Managers or job analysts using other methods may watch parts of a job being performed to gain a general familiarity with the job and the conditions under which it is performed. Multiple observations on several occasions also will help them use some of the other job analysis methods more effectively.


    WORK SAMPLING

    As a type of observation, work sampling does not require attention to each detailed action throughout an entire work cycle. Instead, a manager can determine the content and pace of a typical workday through statistical sampling of certain actions rather than through continuous observation and timing of all actions. Work sampling is particularly useful for routine and repetitive jobs.

    EMPLOYEE DIARY/LOG

    Another method requires that employees “observe” their own performances by keeping a diary/log of their job duties, noting how frequently they are performed and the time required for each duty. Although this approach sometimes generates useful information, it may be burdensome for employees to compile an accurate log. Also, employees sometimes perceive this approach as creating needless documentation that detracts from the performance of their work.


    Interviewing

    The interview method of gathering information requires that a manager or HR specialist visit each job site and talk with the employees performing each job. A standardized interview form is used most often to record the information. Frequently, both the employee and the employee’s supervisor must be interviewed to obtain a complete understanding of the job.

    Some typical interview questions include:
  11. What is the job being performed?
  12. What are the major duties of your job position? What exactly do you do?
  13. What physical locations do you work in?
  14. What are the education, experience, skill, and [where applicable] certification and
  15. licensing requirements?
  16. In what activities do you participate?
  17. What are the job’s responsibilities and duties?
  18. What are the basic accountabilities or performance standards that typify your work?
  19. What are your responsibilities? What are the environmental and working conditions
  20. involved?
  21. What are the job’s physical demands? The emotional and mental demands?
  22. What are the health and safety conditions?
  23. Are you exposed to any hazards or unusual working conditions?
The interview method can be quite time consuming, especially if the interviewer talks with two or three employees doing each job. Professional and managerial jobs often are more complicated to analyze and usually require longer interviews. For these reasons, combining the interview with one of the other methods is suggested.


Questionnaires
The questionnaire is a widely used method of gathering data on jobs. A survey instrument is developed and given to employees and managers to complete. The typical job questionnaire often covers the areas shown below. The major advantage of the questionnaire method is that information on a large number of jobs can be collected inexpensively in a relatively short period of time. However, the questionnaire method assumes that employees can accurately analyze and communicate information about their jobs. Employees may vary in their perceptions of the jobs, and even in their literacy. For these reasons, the questionnaire method is usually combined with interviews and observations to
clarify and verify the questionnaire information.
One type of questionnaire sometimes used is a checklist. Differing from the open-ended questionnaire, the checklist offers a simplified way for employees to give information. An obvious difficulty with the checklist is constructing it, which can be a complicated and detailed process.

Job Analysis Questionnaire

  • Materials and equipment used
  • Financial/budgeting input
  • External and internal contacts
  • Knowledge, skills, and abilities used
  • Working conditions
  • Special duties performed less frequently
  • Duties and percentage of time spent on each
  • Work coordination and supervisory responsibilities
  • Physical activities and characteristics
  • Decisions made and discretion exercised
  • Records and reports prepared
  • Training needed


Critical incident technique.

The critical incident technique involves observation and recording of examples of particularly effective or ineffective behaviors. Behaviors are judged to be "effective" or "ineffective" in terms of results produced by the behavior.

The following information should be recorded for each "critical incident" of behavior: (1) what led up to the incident and the situation in which it occurred; (2) exactly what the employee did that was particularly effective or ineffective; (3) the perceived consequences or results of the behavior; and (4) a judgment as to the degree of control an employee had over the results his or her behavior produced (to what degree should the employee be held responsible for what resulted?).

The critical incident method differs from direct observation and work methods analysis in that observations of behavior are not recorded as the behavior occurs, but only after the behavior has been judged to be either particularly effective or ineffective in terms of results produced. This means that a person using the critical incident method must describe a behavior in retrospect, or after the fact, rather than as the activity unfolds. Accurate recording of past observations is more difficult than recording the behaviors as they occur.

Job Analysis and the U.S. Department of Labor


A variety of resources related to job analysis are available from the U.S. Department of Labor (DOL). The resources have been developed and used over many years by various entities with the DOL, primarily the Employment and Training Administration.

FUNCTIONAL JOB ANALYSIS (FJA)

This method is a comprehensive approach to job analysis. FJA considers:
  1. goals of the organization,
  2. what workers do to achieve those goals in their jobs,
  3. level and orientation of what workers do,
  4. performance standards, and
  5. training content.
A functional definition of what is done in a job can be generated by examining the three components of data, people, and things. The levels of these components are used to identify and compare important elements of jobs given in the Dictionary of Occupational Titles (DOT), a standardized data source provided by the federal government.


Specialized Job Analysis Methods

Several job analysis methods are built on the questionnaire approach. Some of these methods are described next.

POSITION ANALYSIS QUESTIONNAIRE (PAQ)
The Position Analysis Questionnaire (PAQ) developed by McCormick, Jeanneret, and Mecham (1972) is a structured job analysis instrument to measure job characteristics and relate them to human characteristics.
The PAQ is a specialized questionnaire method incorporating checklists. Each job is analyzed on 27 dimensions composed of 187 “elements.” The PAQ comprises six divisions, with each division containing numerous job elements. The divisions include:
  • Information input: Where and how does the worker get information to do the job?
  • Mental process: What levels of reasoning are necessary on the job?
  • Work output: What physical activities are performed?
  • Relationships with others: What relationships are required to perform the job?
  • Job context: What working conditions and social contexts are involved?
  • Other: What else is relevant to the job?
The PAQ focuses on “worker-oriented” elements that describe behaviors necessary to do the job, rather than on “job-oriented” elements that describe the technical aspects of the work. Although its complexity may deter many potential users, the PAQ is easily quantified and can be used to conduct validity studies on selection tests. It is also useful in helping to ensure internal pay fairness because it considers the varying demands of different jobs.

MANAGERIAL JOB ANALYSIS Because managerial jobs are different in character from jobs with clearly observable routines and procedures, some specialized methods have evolved for their analysis. One of the most well known and widely used methods was developed at Control Data Corporation and is labeled the Management Position Description Questionnaire (MPDQ). Composed of a listing of over 200 statements, the MPDQ examines a variety of managerial dimensions, including decision making and supervising.


Computerized Job Analysis

As computer technology has expanded, researchers have developed computerized job analysis systems. They all have several common characteristics, including the way they are administered. First, analysts compose task statements that relate to all jobs. They are then distributed as questionnaires that list the task statements. Next, employee responses on computer-scannable documents are fed into computer-based scoring and reporting services capable of recording, analyzing, and reporting thousands of pieces of information about any job.
An important feature of computerized job analysis sources is the specificity of data that can be gathered. All of this specific data is compiled into a job analysis database.
A computerized job analysis system often can reduce the time and effort involved in writing job descriptions. These systems have banks of job duty statements that relate to each of the task and scope statements of the questionnaires.
As is evident, the melding of computer technology with job analysis methodology allows firms to develop more accurate and comprehensive job descriptions, linked to compensation programs, and performance appraisal systems. These processes can also provide better data for legal defensibility than was once available.


Combination Methods

There are indeed a number of different ways to obtain and analyze information about a job. No specific job analysis method has received the stamp of approval from the various courts in all situations. Therefore, in dealing with issues that may end up in court, care must be taken by HR specialists and those doing the job analysis to document all of the steps taken. Each of the methods has strengths and weaknesses, and a combination of methods generally is preferred over one method alone.

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