1

Job Review & Validation

Begins with clear job description

Comparison to jobs of similar nature in selected surveys

2

Compensation selects job description and sends to

appropriate validation team.

Validation team reviews

description.

Needs updating?

Validation team matches description with closest generic

job title and responsibility level from survey data.

Compensation matches salary data with the average of position salary data from current year

survey report.

Go to instructions for job descriptions.

NoYes

A match is identified

Validation team and Compensation

Manager agree on appropriate salary

grade.

The position is slotted and an

appropriate salary grade assigned.

YES NO

Changes, if necessary, are made and communicated

to the affected employee.

3

Job Descriptions

Provide the organization with documentation of the major responsibilities and duties (nature and level of work), job specifications (knowledge, skills and abilities) and working conditions which are required for competent performance of the job.

Facilitates job-content evaluation. Facilitates salary survey exchanges. Assists in recruiting efforts. Establishes minimum performance standards. Assists in defining career paths (succession planning). Serves as documentation for legal challenges to compensation

determinations, job administration and staffing actions.

The job description process typically needs to include the immediate manager/supervisor, department key manager, compensation manager, and incumbent, if applicable.

4

Job Descriptions

Snapshot of job -- captures most important elements of job

– Should cover 80% of job.

Three major sections:– General Summary– Principle Duties and Responsibilities– Knowledge, Skills, and Abilities

5

Job Description Flow Chart

· New Job · Change to

Job

Manager Discusses Job Content with the

Compensation Manager

Does the Job match to an existing Job

Manager initiates the change and

communicates this to the employee

Manager writes the job description and

sends it to the Compensation

Manager

The Compensation Manager conducts the Benchmarking (Internal/External)

The determination of the Salary Grade

is made and reviewed with the

Manager

No

Yes

Yes NoQuestions???

Final review and approval by two

Management

Compensation completes the final

documentation

Manager communicates

change(s)to employee(s) levels of

6

“Administrative Exemption”

Job Description Preamble“Administrative Exemption” is granted since the primary duty of this position is the performance of office or non-manual work directly related to assisting the management or general business operations of the Company with the running of the business or servicing our customers; and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance to the Company.

7

“Executive Exemption” Job Description PreambleNumber of Employees Supervised = 2 or more

“Executive Exemption” is granted since the primary duty of this position is management of a customarily recognized department or subdivision. This position customarily and regularly directs the work of two or more other employees. The incumbent’s suggestions and recommendations are given particular weight as to hiring, firing, advancement, promotion or other change of status of other employees.

8

“Learned Professional Exemption” is granted since the primary duty of this position is the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. This position includes work requiring the consistent exercise of discretion and judgment, which is predominately intellectual in character and requires advanced knowledge generally used to analyze, interpret or make deductions from varying facts or circumstances.

“Learned Professional Exemption”

Job Description Preamble

9

“Computer Professional Exemption” is granted since this position has a primary duty of (A) application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software of systems functional applications; or (B) design, development, documentation analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user of system design specifications; or, (C) design, documentation, testing , creation or modification of computer programs related to machine operating systems; or (D) a combination of duties described in (A), (B) and (C), the performance of which requires the same level of skills.

“Computer Professional Exemption” Job Description Preamble

10

What is a Job Family?

A job family is a group of jobs in a major work function sharing similar background, education, and experience requirements.

Matching positions to job families is done based upon the duties, responsibilities, background and experience requirements of your positions, not the department or business unit that the position is in.

For instance, while Engineering positions (such as Field Service) may exist in the Operations or Customer Service departments, those jobs are matched to an Engineering job family, not Operations or Customer Service.

11

What is a Career Level?A Career Level is a distinct level of responsibility and proficiency within a job family. In each of the job families positions are typically assigned to one of the following career levels:

Management Professional Technician Admin. HourlyM3 - 3rd Level Manager P5 - Expert T3 - Lead A3 - Lead H3 - Lead

M2 - 2nd Level Manager P4 - Advanced T2 - Skilled A2 - Skilled H2 - Skilled

M1 - 1st Level Manager P3 - Career T1 - Entry A1 - Entry H1 - Entry

MS - Supervisor P2 - Intermediate

P1 - Entry

While the definitions and requirements of the survey’s career levels are generally consistent across our job families, some differences exist between different types of job families (e.g. technical vs. non-technical families). The career levels applicable to each job family are described in terms of the general experience/ education, knowledge/skills/abilities, and typical responsibilities expected ateach level in each family.NOTE: Executive positions are not assigned career levels, as all are assumed to be top managers.

12

BENCHMARKING MARKET & JOB LEVELS (Example)

MECHANICAL ENGINEER 1 (ENTRY LEVEL position) Bachelors Degree in Mechanical Engineering or equivalent experience.

MECHANICAL ENGINEER 2 Bachelors Degree in Mechanical Engineering or equivalent experience, and 2 years of applicable mechanical engineering experience.

MECHANICAL ENGINEER 3 Experience and Training: Bachelors (Masters preferred) in Mechanical Engineering or equivalent experience, and 5 years of applicable mechanical engineering experience.

MECHANICAL ENGINEER 4 Experience and Training: Masters Degree in Mechanical Engineering or equivalent experience, and 8 or more years of applicable progressively complex Mechanical Engineering experience

MANUFACTURING ENGINEER 5. Excludes those with full supervisory responsibilities. Experience and Training: Masters Degree in Manufacturing Engineering or equivalent experience, and 10 or more years applicable progressively complex Manufacturing Engineering experience.

13

Benchmarking

• Intent is to match base pay to market to remain competitive

• Competitive salaries are measured through use of published salary surveys.

• Preference is to compare local companies that are similar in terms of skills required, technological sophistication, size, and products.

14

Salary Surveys Survey Sources & Quality Considerations

Good Clear job or role definitions to ensure “apples to apples” comparisons Efforts to support job matching Sufficient sample size for statistical inference, i.e., lots of participants! Full range of compensation elements and appropriate statistical measures Rigorous data auditing and cleaning Flexible (electronic) output formats

Bad (Let’s just say, “not so good”) Very brief and/or generalized job definition Collect average pay per job instead of incumbent-specific data Base salary only Averages only Self-reported data (e.g., professional association surveys of their members)

Ugly Statistically biased (e.g., recruiting firm “surveys”) Unnamed sources and participants

e.g., Monster.com, Salary.com, Payscale .com

15

Surveys& Appropriate Labor Markets

Non-Exempt (and Hourly)Local only

Exempt Local primaryRegional secondary

Key Employees & ManagementNational primaryLocal secondary

Appropriate labor market should be determined by level of position:

16

Surveys & Similar Companies

Companies in the salary surveys meet one or more of the following criteria

• Similar size business, i.e. complexity of the job is comparable

• Companies with similar positions• Geographic location is in the area from

which location would recruit to fill the position

17

Non-Benchmark Jobs Jobs for which you can’t get good data

Job evaluation is the traditional answer “Slotting” of jobs to estimate market

value can be an alternativeLink a given job to one or more other

benchmark positions that have been market priced, and thereby assigning it to the same reference data.

Example: slotting an OD Manager against an HR Manager and a Compensation Manager

18

Position Matching Blended Jobs

Financial Systems Analyst

Match to Financial Analyst, Systems Analyst or both?1. “Highest Common Denominator” approach (recommended)

Survey Position Market Median Base Salary

Financial Analyst $60,000

Systems Analyst $70,000

Reference value for your Financial Systems Analyst should be at least $70,000

2. Weighted average blending of data

Survey Position Market Median Base Salary Percentage of job

Financial Analyst $60,000 60%

Systems Analyst $70,000 40%

Reference value for your Financial Systems Analyst should be $64,000

19

Weighting Survey Matches

Most situations “simple averaging” (equal weighting) is appropriate

Under certain (limited) circumstances, sources may be more heavily weighted to put more emphasis on Industry specific sources or Significantly better match of survey description to your position

Some organizations weight by the number of companies or incumbents for each data point

Sample criteria for weighting

Weight 1x: “Meets evaluation standards”• acceptable source and match

Weight 2x: “Very trustworthy source”• high quality survey methodology• large participant base

Weight 3x: “Most relevant source/match”• highly comparable participants

20

Aging Survey DataSurvey pay statistics are typically “aged” to a common point in time

To “standardize” data from

sources conducted at different dates 3% annual Aged Aged to Common Date

Survey A: 1/1/09 data x 1.0450 7/1/2010

Survey B: 4/1/09 data x 1.0375 7/1/2010

Survey C: 7/1/09 data x 1.0300 7/1/2010

To position pay recommendations to be competitive at a certain point in time

Pay policy or ranges effective

Jan 1 July 1 Dec 31

Lag/Lag Data Aged to Lead/Lag Data Aged toLead/Lead

21

Communications

Make every effort to clearly communicate your compensation plan to all employees. However, understand that the compensation plan is a two-way responsibility.

Managers and supervisors are expected to explain and answer questions pertaining to the plan.

And to communicate salary information to employees– Salary range for current position– Salary range for next likely position

Employees are expected to understand plan details and put forth behaviors that will result in expected performance. When uncertain about plan practices, employees are expected to ask for further explanation or information.