Job Evaluation - Introduction

INDUSTRIAL ENGINEERING is redesign (engineering) of Products, Facilities and Processes for Productivity increase.
Productivity Management Imperative for USA - McKinsey. Returning US productivity to its long-term trend of 2.2 percent annual growth would add $10 trillion in cumulative GDP over the next ten years (2023 - 2030).

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Wage scales and job evaluation; scientific determination ... Lott, Merrill R.

Wage incentive methods, their selection, installation and operation, by Charles Walter Lytle ...
Published: New York, The Ronald press company [1943]

Available on hathitrust

JOB EVALUATION METHODS
By CHARLES WALTER LYTLE, M.E.
PROFESSOR OF INDUSTRIAL ENGINEERING, NEW YORK UNIVERSITY
1954, Ronald Press
Available on archive


JOB EVALUATION




Collective bargaining to decide wages and salaries is democratic and helpful but by itself does not assure correct answers. This fact is evident from the frequent demands for rebargaining. In fact, we can hardly expect correct answers from unaided bargaining if we consider how many variables are involved. Bargaining done in ignorance on both sides is always a needlessly slow, costly process, and when the conditions of the bargain keep changing, so that it must be done over every year or every six months, it may give little improvement over unilateral guesswork by employer.

Job evaluation is merely a convenient name for systematic preparation for pricing in the labor market, closely comparable to modern pricing of merchandise. The latter is made possible by adequate cost analysis, the former by adequate job analysis.

Job evaluation, then, is neither more nor less than an effort to apply sound principles of measurement to determine what each job in an organization is really worth. It is the fair share, to which a satisfactory performance of a job should entitle the man who performs it, of the profitable
result to which his performance contributes. To make job analysis adequate for job evaluation it is necessary to think beyond the concept "amount of work" because that implies only the quantitative
part of the employee's contribution. That part is tangible and can be positively checked by comparing the units produced per period of time with set tasks as is done for incentive payment. Less tangible,
and hence more difficult, is the qualitative part which involves skill, effort, responsibility, and working conditions and many more possible subordinate considerations that are covered by these
four major considerations.

This qualitative part of the employee's contribution is a matter of guessing in old-fashioned "rate setting" and is not part of "motion and time study." Hence a separate and different kind of job study must be made with the specific purpose of measuring the qualitative contribution. Such further study begins with job review or "job analysis," carries through "job description-specification," "job classification," and ends with "evaluation." This foundation should underlie every job rate whether for time payment or for incentive payment.  Modern job analysis and its recent extension, job evaluation, are now solving this long neglected problem impersonally and objectively. These terms
may be defined as follows:

Job analysis is the review study of definite jobs to ascertain what kind and what degree of man-qualities are necessary to make man-job units operate satisfactorily.

Job evaluation is the extension of job analysis to ascertain reliably the relative worth of jobs, to transform these appraisals into a structure of adequate rates, and to provide standard procedures for all additions to, and adjustments in, the rate structure.

Labor efficiency or man-productivity is the variable effect of, or response to, plant conditions and practices which are variable causes. The latter variables can largely be planned, for better or for worse, by the policies, plans, and activities of management which create the jobs, or more accurately, the man-job units. Graphically we can picture man-job unit productivity as the resultant of five or six job-planning  components} Obviously, if we wish to change the direction or increase the magnitude of the man-job productivity resultant we must begin by installing, building up, or correcting the job-planning components, not just one or two of them, but all of them.

Let us suppose, for instance, that two like-sized factories, A and B, make identical improvements in one component, say wage incentives. That would be building up one of the job plan plan components.  and each factory might achieve the same man-job unit productivity gain in
percentage. But if A, because of the weakness of other job variables, had been below B in productivity before the change, it would continue to be below B after the change. The weakness of A's other variables would not be corrected by the addition or strengthening of the single component and the resultant productivity would not be as much improved as it could have been if all components had been re-aligned. From the fact of equal percentage gain A would seem to be improving as much as B. Actually A might still be far below its rightful potential.

Of the five or six components constituting job plan  the most fundamental are the standardization of conditions and the standardization of operations. The former — development of equipment, that is, the design or selection of the most expedient equipment, jigs, tools, gauges, and the like — establishes the physical potential for quality of product. The latter — job standardization,
that is, motion and time study - — establishes the physical potential for efficient operating. The first can largely be purchased from without while the second must be developed almost entirely from within. When these two components of job control have been fully developed the factory will have attained improved, standardized jobs. The tasks or amounts of work per hour which derive therefrom can be used as bases for much of the planning and controlling, for efficiency measurement, for extra-financial incentives, and the like.

Prerequisites of Job Evaluation.
 Job standardization is a prerequisite of job evaluation.  If jobs are definite and stable, because of automatic machinery, then perhaps further job standardization may be omitted, but we can scarcely
imagine any kind of practical work which cannot be improved by an appropriate application of motion and time study.  Job review-analysis and evaluation can be used more peremptorily but usually should not be. Certainly management must have gained labor's confidence in its general
competence and fairness before attempting to build the component review-analysis and evaluation. When management has achieved the prerequisites it can gain a more complete confidence by creating
a systematic and analytic job evaluation.

Primary Purposes of Job Evaluation. In brief we may state the primary purposes of job evaluation as follows:

1. To establish a general wage level for a given plant which will have parity, or an otherwise desired relativity, with those of neighbor plants, hence with the average level of the locality.

2. To establish correct differentials for all jobs within the given plant.

3. To bring new jobs into their proper relativity with jobs previously established.

4. To accomplish the foregoing by means of facts and principles which can be readily explained to, and accepted by, all concerned.

Job evaluating can become a control of importance because:

1. By reducing all essential job facts to convenient form it enables a management to implement policies of fairness.

2. By adopting sound principles and impartial techniques it trains the supervisory force to be more nearly objective.

3. By clarifying lines of authority and responsibility it obviates misunderstanding.

4. By substantiating confidence it lessens grievances and simplifies wage negotiations.

Conformity to sound principles makes possible consistency in job rating and the latter is the cornerstone of mutual fairness. If man-merit rating can be added as a top layer to all base rates, then payment by time can have a limited but important incentive effect.

Secondary Purposes of Job Evaluation.  Certainly a: unified rate structure embracing all jobs is important to any employment department. We will say here that, either for hiring or for transferring and promoting, even for demoting and discharging, a set of job description-specifications is considerably more valuable when consistent base rates or rate ranges are affixed to them.

The secondary purposes are well indicated by the following outline of a job evaluation program.

1. To determine qualities necessary for a job when hiring new employees.

2. To determine qualifies necessary for a job when making promotions.

3. To determine if the system of advancement in a particular plant is from the job of lowest order toward the job of highest order.

4. To determine qualities necessary when bringing back men who have been laid off or have been on leave for war service. During the interval there may have been changes in job content.

5. To support explanations to employees as to why a particular man would not be suitable for a given opening. Many seniority clauses give preference to length of service only after the requirements of the job in the way of experience, etc., are satisfied. If the job rating has been made up by an independent agency and the entire plant has been rated there is likely to be less stress on mere seniority.

6. To determine if men now occupying various jobs have qualifications required by the specifications.

7. To determine if all men are placed to best advantage in respective jobs available, also to guide the revamping of jobs for skill conservation.

8. To analyze hourly rates and to determine if they are in line with rating given.

9. To compare periodically wage rates with those for similar occupations at other local plants.

10. To point out where greatest opportunities lie for development of automafic equipment and improvement of working conditions, removal of hazards, etc. Any plant where job ratings are very high, indicating a predominance of highly skilled labor, usually is a plant where there are
very few automatic operations. High ratings indicate places where it is most likely that improvements in equipment can be justified.

Primarily job evaluation is not concerned with improvements in tools and methods but such possibilities are sometimes brought to light during the analyst's review studies, in which case a report should be made to the industrial engineering department.

11. To train new supervisors. Specifications outlining duties of each man are useful in starting a new foreman on the job. Even an old foreman may have a wrong conception of job content and worth.

12. To facilitate explanations to an employee of the fact that any improvement in working conditions theoretically should mean a reduction in his wage rate. For example, if a worker is located in a poorly heated building and better heating is installed, the installation of heating equipment, an improvement in working conditions, lowers his job classification. Theoretically the base rate for the job should be lowered accordingly. Actually, poor working conditions rarely carry high ratings.

It is not advocated that better working conditions be provided for the express purpose of lowering workers' rates. However, if an employee is shown that he is paid a higher rate because his working conditions are not the best, he will probably be better satisfied with his job.

Collectively job evaluation facilitates the making of safe plans for the rearrangement or replacement of large numbers of workers. Only by such means is it possible to enter bargaining negotiations
without fear or fumbling. Without it decisions are often influenced (1) by the favoritism of a supervisor, (2) by the advertising ability of an employee, (3) by bad guesses regarding the ratio of demand to supply, or (4) by precedents previously influenced by any of the foregoing. Job evaluation can eliminate all these extraneous influences. The first two are precluded and the third, that of demand-to-supply ratio, can be kept from being confused with the relative worth of jobs by measuring the relative worth in terms of abstract points regardless of money rates. The supply-demand influence should be left to bargaining. In short, job evaluation completes the phases of job study and makes possible a rate structure which is independent of off-side, disrupting influences. Naturally this condition aflows a management to proceed with confidence and should do much to gain and keep the complete confidence of workers. This advantage alone will usually justify whatever costs are involved. It was, in fact, the exposure of this need that plunged management into the movement during the latter half of the prolonged depression, 1935-1940.

Transformation of "Rate Setting."
The original purpose of job analysis was to classify jobs in order to correct the setting of job
rates. Various attempts at job classification were made by Civil Service reformers, beginning with the Civil Service Commission of 1871. But modern job analysis was started in 1909 by a requirement of the Civil Service Commission of Chicago and the subsequent work of the Commonwealth Edison Company of that city. No doubt inspiration for this step came from Taylor's practices: his further
specialization of jobs, his "science of work" studies, his more careful selection and placement of operatives, and his examples of increasing unit labor cost to reduce unit total cost. Apparently Taylor and other engineers were too busy with the improvement of methods to go far into this, the last step of job study. In fact, these pioneers, in developing better shop management, were putting most jobs on incentive payment and were content to work backward from total earnings to derive the base rates. Time-paid workers were left to supervision and "functionalized foremanship" was supposed to solve supervision. Furthermore, Taylor had little union contact until after 1912. Thus the personnel men developed job analysis, as they named it, and for several years it remained mostly in large offices.

World War I gave impetus to this personnel function. From that
time on its use spread wherever there was a functionalized personnel
staff. It seems, however, that the rate-setting function in factories
was held jealously by line executives and they paid little attention to
the new personnel files of job description-specifications. In fact, the
techniques of job analysis were only then emerging from the experi-
mental stage. Foreman-made descriptions were tried. Then the per-
sonnel staffs made their own. Ranking or grading whole jobs was
the usual method of determining their relative worth. A few indus-
trial engineers were beginning to analyze work on basic "character-
istics" but even in such experiments no one attempted to use weighted
points to measure the relative worths. In 1924, Merrill R. Lott tried
out the first thorough-going plan for weighting separate work char-
acteristics. His fifteen characteristics included three that are now
considered extraneous and others that were not well related but he,
and those who followed, did get the pioneering done in time for a
more urgent need.

Pressing Need Had Developed by 1937. Meanwhile, jobs had
been getting more specialized and more individualized. This out-
come was the natural consequence of the many choices in equip-
ment brought into being for various scales of operation and of many
special solutions to "the one best way" which motion study was beginning to effect. No longer was it safe to assume that jobs bearing the same titles in different factories were identically the same jobs.
Employers could use only the relatively few key jobs for rate com-
parisons, and even these needed to be checked by personal inspec-
tion. Thus the "going rate" for any class of jobs in a community
became less evident, and more undependable, as a basis for informal
rate setting. This lack of reference points meant that the manage-
ment of each plant had to work out its rate structure more inde-
pendently of interplant comparisons.

By 1937 another force, that of the unions, was pressing to the
same storm center. Organized labor had long advocated "standard
rates" and numerous states had passed minimum wage laws. The
National Industrial Recovery Act of 1933-35 put the latter on a
federal scale and the National Labor Relations Act of 1935 intensi-
fied the activity of the unions. After the Supreme Court sustained
that law in 1937 the two-year-old CIO was able to increase its
membership by large numbers of unskilled and semiskilled workers
and to exert a power never before wielded by American employees.
Wage rates for large groups were set by collective bargaining and
pushed upward frequently. Hours came down and, in not a few
cases, efficiency per man-hour fell off alarmingly. In short, bargain-
ing became as unbalanced in favor of employees as it had ever been
unbalanced in favor of employers. Many a manager found it diffi-
cult to defend his base rates. Where that occurred the higher-ups in
management became interested and demanded some kind of "job-
pictures" to help them get a grasp of the whole situation. Thus the
few companies which had learned how to build a stormproof rate
structure were stormed by their less farsighted neighbors asking for
help. Soon the National Electrical Manufacturers Association, the
National Metal Trades Association, and other employer associations
were deep in the new business of job evaluation.^

Peace-to-War, War-to-Peace Conversion Benefited. It may not
have been appreciated at the time but it can be seen now that it was
fortunate to have thoroughly reliable methods of rate setting pushed
into being before the war expansion began in 1941. As the Amer-
ican machine tool industry benefited from its depression-completed
redesigning and tooling, so American management benefited from
its depression-completed development of job evaluation. The rate
structure of many a plant was more free from "out-of-line rates"
than ever before. New jobs could be fitted quickly into the structure.
New thousands of employees could quickly be assigned high but
consistent rates. New demand-supply requirements could be ad-
justed without upsetting any of the weighted values. Hence these
prepared companies were better able to meet the demands of war
without undue rate confusion and without loss of confidence on the
part of unions.

Many managements that were not prepared in this respect at the
time of conversion lost no time in getting prepared for the reconver-
sion. They realized that when wage and salary controls were eased
or relinquished there would be a great commotion wherever man-
agement failed to develop a program of job analysis and job evalua-
tion. Much confusion, distress on the part of top management, and
in many cases actual strikes were avoided where this preparation
took place. A mature program of job control perhaps does not
insure perfect calm, but it can do a great deal to smooth out the
agitation. Job evaluation and all it connotes provide a factual basis
for decision and for negotiation. It implements policy and wins
confidence, and these advantages are always helpful when manage-
ment is confronted with difficult problems.

Here are only a few of the job evaluation problems which needed
attention during post-war years. Some jobs had been split to make
one skilled job for a woman and one heavy job for a man, neither
of which rated as high as the original job. As women withdrew
from industry or as the scale of operations shrank, it became neces-
sary to recombine some of these narrowed jobs and put the more
general job into a higher classification. Other jobs were upgraded
on responsibility resulting from certain war conditions. Such jobs
needed to be re-evaluated and reclassified downward. Many jobs
were hastily put on incentives, without an evaluated base. In fact,
the extension of evaluated bases for incentive jobs had barely begun
at the end of the war and that had to be undertaken without delay
in plants where it had thus far been neglected. We assure top man-
agement that it will now save itself much trouble by installing job
evaluation where no steps have been taken in that direction. In
fact, it will also save itself much time for other matters.

Surveys Indicating Present Use. A survey made by the Na-
tional Industrial Conference Board in 1948, covering 3,498 com-
panies, showed that 59 per cent of them had job evaluation applied
to nearly all hourly paid jobs. Over half of these companies applied
job evaluation to salaried jobs, one third to supervisory jobs, and
one eighth to executive jobs. About the same time the Bureau of
Labor Statistics reported that unions were participating in these
plans at 50 per cent of the plants making metal parts, assemblies
made of metal, and the like.





A later NICE survey reported that 70 per cent of the plans in use
were point systems, 10 per cent factor comparison systems, 14 per
cent combinations of the foregoing, 4 per cent mere classification,
and 2 per cent other unnamed systems.

Recently The Dartnell Corporation of Chicago surveyed 96
companies regarding their use of job evaluation. All but 8 of the
companies had installed their plans since 1940. Of these plans, 74
used weighted points, 8 comparison of characteristics, 8 character-
istics comparison combined with weighted points, and 6 ranking.
Only 38 companies brought in consultants for installation. Only
12 companies were nonunion, but 41 did not include the matter in
their union contracts; 43 did. Fourteen companies did not apply
it to the office force; 82 did. Only 12 companies had training pro-
grams for preparing their supervisors, but 85 held meetings with
their supervisors. All but 16 companies held meetings with their
employees and most of them used the employee magazine plus bul-
letins to explain what was coming.


C. W. Lytle, "Job Evaluation— A Phase of Job Control," Personnel XVI, No.
4.

Also Roland Benjamin, Jr., "The Dynamics of Job Evaluation," The Manage-
ment Review, XLII, No. 4.

^ Developed directly from the works of Taylor and Gilbreth with the objective
of determining the least costly methods of utilizing the physical assets. References
recommended: Ralph M. Barnes, Motion and Time Study (New York: John
Wiley & Sons, 1948); Production Handbook (New York: The Ronald Press Co.,
1953).

■* By this procedure he reduced unit labor cost without reducing employee
earnings.

^^ Eugene Caldwell, "Job Rating," The Iron Age, CXLIV, No. 10.
■' In 1938, of 63 companies questioned, 32 were found to be doing job evaluation.

® See Report No. 605 (Chicago: Dartnell Personnel Administration Service).