Thursday, August 9, 2018

Job Evaluation - An Industrial Engineering Task


Industrial engineers actively get involved in job evaluation. In IE curriculums job evaluation is taught.

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

To be edited further

Job Requirements Are Not Simple. What the employer requires
of the employee in work and what the employee requires of the
employer in wages have always been delicate questions. Either
party has often got the better of the other party. Collective bar-
gaining is democratic and helpful but by itself does not assure cor-
rect 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 old-time unilateral
guesswork.

 Job evaluation is merely a convenient name for sys-
tematic preparation for pricing in the labor market, closely com-
parable 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. That is not what the management
thinks it ought to pay, nor what the worker, or his union, thinks he
ought to get, but 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 con-
cept "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, not to mention the
many 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 but incidentally con-
sidered in that part of job study known as "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. Despite the
fact that a wage rate is important to the employee as the limit of his
"take home," to the employer as an influence on costs, and to both
as a basis of harmony, job rating has been the last management
problem in this field to get professional attention. 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:

Jo b 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 evaluati on is the extension of job analysis to ascertain reliably
the relative worth of jobs, to transform these appraisals into a struc-
ture of adequate rates, and to provide standard procedures for all
additions to, and adjustments in, the rate structure.

Job Evaluation is part of organization 

Labor efficiency
or man-productivity is the variable effect of, or response to, plant
conditions and practices which are variable causes. The latter varia-
bles can largely be controlled, 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-control com-
ponents} 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-control 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 incen-
tives. That would be building up one of the job controls and each
factory might achieve the same man-job unit productivity gain in
percentage. But if A, because of the weakness of other job controls,
had been below B in productivity before the change, it would con-
tinue to be below B after the change. The weakness of A's other
controls 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 control the most
fundamental are the standardization of conditions and the stand-
ardization of operations (see Figure 1 ) . 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 with-
out while the second must be developed almost entirely from within.
When these two components of job control have been fully devel-
oped 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 effi-
ciency measurement, for extra-financial incentives, and the like.
But all this, as already explained, does not bring parity of wage
rates; by itself it increases disparity of rates!

Prerequisites of Job Evaluation. Concurrent with the adoption
of extra-financial incentives, or even in lieu of them for many jobs,
should come the components of job review-analysis and job evalua-

'  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).




tion. Like the arrangement of an incentive these components should
follow, never precede, job standardization, because they presuppose
the existence of definite and reasonably stable jobs. If jobs are defi-
nite 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 apphcation of motion and time study. Extra-finan-
cial incentives are positively dangerous if not preceded by these and
other preparatory controls. 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 previ-
ously established.

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

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 pay-
ment by time can have a limited but important incentive effect. If any manager, not yet using job evaluation, thinks
that rates set otherwise are already consistent let him examine the
statistical picture shown in Figure 2. This figure may show a worse
case than his own but it represents about the usual situation before
completing job evaluation.

Secondary Purposes of Job Evaluation. In this text we will not
dwell on the use of job analysis as an aid to hiring, the sole aim of
many managements in adopting job analysis between 1914 and
1937. All such assistance and more can come from extending job
analysis on through job evaluation. Certainly a: unified rate struc-
ture embracing all jobs is important to any employment department.
We will say here that, either for hiring or for transferring and pro-
moting, 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 out-
line 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 Une 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 auto-
mafic 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 improve-
ment 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 equip-
ment, an improvement in working conditions, lowers his job classi-
fication. 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 influ-
ences. 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 con-
dition 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.

Transfoimation 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

^^ Eugene Caldwell, "Job Rating," The Iron Age, CXLIV, No. 10.





Service reformers, beginning with the Civil Service Commission of
1871. But modern job analysis was started in 1909 by a require-
ment 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 be-

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





ginning 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

■' In 1938, of 63 companies questioned, 32 were found to be doing job evaluation.





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.

 The Dartnell Corporation of Chicago surveyed 96
companies  regarding their use of job evaluation (1954). 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.

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

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