Job analysis is a tool that aids in identifying the duties at the jobs, and the qualities employees need to have to be able to perform them. Basically, “job analysis is used to discover and document the essential nature of work” (Breaugh, 2017, p. 12). This information is studied to explore the key insights behind these duties, such as their relative importance, frequency, and time needed to perform them, KSAOs, work complexity, or working conditions and environment. The obtained knowledge can be utilized for diverse objectives, including recruitment campaign design, candidate selection, or compensation decisions. Although the process is costly and time-consuming, the information obtained through the analysis serves as a necessary basis for decision-making regarding human resource management within organizations.
Key Elements of Job Analysis
Phases of Job Analysis
The Job Analysis process must be designed and conducted according to the requirements and standards for the procedure. Stewart and Brown (2020) define seven steps that cover job analysis from its planning to evaluation practices. After the demand for work assessment occurs, the organizational stage takes place (Stewart & Brown, 2020). Secondly, the jobs are chosen for the study and exploration. It is crucial to study the specific positions for which the analysis is done, and not similar positions. Later, job analysts are recommended to review the existing knowledge about a job. This stage includes an in-depth analysis of external literature and the company’s documentation and is used to identify critical questions and issues.
After the detailed review of the information and the setting of goals, the implementation phases take place. According to Stewart and Brown (2020), the fourth stage involves the selection of the representative sample that consists of experts, supervisors, and incumbents. Next, the analysts should collect information utilizing a variety of methods. The sixth stage implies the development of a job description that has the form of the list with the duties (Stewart & Brown, 2020). Job Specification List is an outcome of the process that includes the representation of the necessary KSAOs vital for successful performance on the job.
Job Analysis Methods
Different job analysis techniques are used to evaluate what employees have to do at a particular position and what KSAOs are necessary for an excellent performance. Breaugh (2017) identifies such approaches as interviews, questionnaires, and observation. The scholar emphasizes the necessity to choose the right method according to the participants of the survey (Breaugh, 2017).
For example, interviews about tasks may be used among job incumbents, questionnaires are best to be completed by supervisors, and observation methods can be used both by job analysts and supervisors. Stewart and Brown (2020) describe several ways of conducting job analysis, including position analysis questionnaire, critical-incidents technique, and task analysis inventory. These methods can be used separately or combined to get a better understanding of tasks and characteristics.
Task analysis inventory is a list of behaviors performed at a job that are rated according to their weight in the overall performance. However, Stewart and Brown (2020) see it as a tool for data collection, when each participant evaluates the tasks from a checklist according to their frequency and importance. Critical incidents technique is a list of statements generated by job agents “that describe behaviors they consider particularly helpful or harmful for accomplishing work” (Stewart & Brown, 2020, p. 132).
The method of structured interviews can be used to evaluate skills, not tasks. The employees in structured multifaceted interviews answer the questions about the critical KSAOs they require for the job. The position analysis questionnaire differs from the previous methods as it focuses mainly on the characteristics necessary to perform the duties well (Stewart & Brown, 2020). Such qualities are usually combined under the abbreviation of KSAOs.
Identifying KSAOs in Job Analysis
The collected data is analyzed to determine which work-related employee characteristics are fundamental for a job. KSAOs are those qualities “that help to identify the job candidate likely to be most successful on the job” (Phillis & Gully, 2015 p. 98). Knowledge is the information input, while skills refer to the specially trained competencies that enable an employee to perform a job. A set of abilities, such as the aptitude for physically demanding work, defines the necessary prerequisites for job performance. According to Waters et al. (2017), other qualities may include attitudes or personality traits required to perform job duties. The requirements for each of these parameters define what competency an employee should have to be successful at a job.
Workforce Planning and Recruiting
Job analysis is an essential foundation for strategic staffing and workforce planning. According to Phillips and Gully (2015), it can be adopted to forecast the demand and supply of labor. The companies can use job analysis to identify how many workers the organization will require to perform the existing task amount and what competencies do they need for future jobs. After the study of the labor supply, a company can decide whether these employees can be found internally or externally. Due to the job analysis of different positions at a company, the HR managers will be able to know how many internal employees possess those characteristics, and organize their transferring.
Job analysis is also a foundation for external recruitment. It helps to create an understanding of the needed qualities, and then, the labor market can be analyzed as for the presence of those characteristics. Job analysis is vital in the recruitment process as it helps to create a clear and specific job description and communicate it to potential employees. Although job analysis focuses mostly on job content and not on the people executing particular tasks, it often serves as a basis for performance evaluation. The process of employee assessment implies the comparison of the behavior against job standards. To ensure that the evaluation is fair and unbiased, these requirements must be identified and officially documented.
Job Analysis for Compensation Management
Job analysis has practical implications regarding employee compensation as it helps to develop a rationale for the payment level. Waters et al. (2017) highlight the necessity of developing a compensation model that corresponds to job requirements, making job analysis is a helpful tool for this purpose. It becomes especially useful when the worth of different jobs has to be compared. According to Ingster (2020), job analysis material helps to “hierarchically order a set of jobs or positions with respect to their value or worth, usually for the purpose of setting pay rates” (p. 95). Thus, if the tasks are similar, the payments are likely to be equal, and when they differ, job analysis justifies the discrepancy in compensation.
Pros and Cons of Job Analysis
Advantages of Job Analysis
Job analysis provides essential insights for organizations regarding jobs’ structure and content. It is a vital tool to facilitate the recruitment process and to ensure the efficiency of strategic staffing. As Morgeson et al. (2020) claim, “job analysis is essential in establishing the validity of selection assessment and testing methods” (p. 287). This approach helps to establish equality not only in hiring but also in compensating the workers. According to Ingster (2020), job analysis is a fair method to develop a compensation package that corresponds to the complexity of the work. The primary advantage of job analysis is that the obtained information can serve multiple purposes, as it gives critical insights into the job content.
Disadvantages of Job Analysis
The extensive exploration of job-related tasks and behaviors is a costly process involving many stakeholders within an organization during a long-term process and requiring IT solutions. When the research outputs are not used efficiently, it can bring financial losses to the company. That is why the findings of job analysis should be used to their maximum potential as the source to respond to multiple issues. They are to be reported and documented for further use by different departments. Struggles with the legality of job analysis are another serious issue that can undermine job analysis efficiency.
Legal concerns and risks are not the disadvantages of the model, but they pose substantial challenges for job analysts. Stewart and Brown (2020), claim that flaws in the analysis can lead to the accusation in arbitrary decisions regarding hiring, promoting, or firing the employees. However, proper job analysis can enhance equality and serve as a roof of a fair decision-making process based on robust analysis.
Job analysis is a systematic study of the duties at a particular position along with the required competencies. It is done for the purposes of recruitment, workforce planning, compensation design, or performance evaluation. HR managers or job agents collect the data about jobs through different methods, such as questionnaires, interviews, or critical incidents techniques. The process is complicated and consists of seven phases – from the planning stage to the analysis of obtained data. Despite its complexity and multiple legal challenges, it brings benefits for the companies in terms of strategic staffing.
Developing a Compensation Package
Both monetary and non-monetary compensation is a reward for the employees given for their effort, skills, and competencies in working for an organization. Although most companies have similar components of compensation packages, the weight and function of each element are different. According to Stewart and Brown (2020), the compensations can be divided into uniform, which implies similar pay for everyone, or variable, which focuses on employee performance. The choice of the compensation strategy depends on many factors, including changing trends in the labor market, employee needs, and job characteristics.
Base pay is the minimum level of employee salary that is not influenced by varying factors and does not include any individual or group incentives or bonuses. As Stewart and Brown (2020) claim, it “is compensation that is provided for time worked; it is not contingent on performance” (p. 461). The level of base pay is determined by several parameters. Some companies focus on job characteristics in developing their base pay plan, the others, however, choose to reward the skills and competencies of employees, and some employ a combination of the two approaches. Although base pay is a necessary element of the total wage, its significant disadvantage is that it does not motivate performance increase. Thus, companies tend to combine base pay and incentives, with different proportions of each, to enhance performance.
Benefits are the components of total reward that the employees receive apart from their base pay. Examples of such benefits are retirement savings, health insurance, or maternity leave support. Benefits programs have many advantages both for the employees and organizations. The latter can create a unique image on the market that promotes corporate values and attracts the potential workforce, while the former feel protected and gain from the payments regulated by favorable tax rules. Stewart and Brown (2020) note that the average proportion of labor costs spent on benefits in U.S. companies is about 30 percent.
However, not all the benefits can be measured through money. Different work-life incentives, legal support, or flexible schedule are non-monetary benefits that improve employee well-being at work. The benefit package may differ not only from a company to a company but also among the employees of the same organization who have different needs.
Individual and Group Incentive
While base pay is a stable compensation and benefits are given to meet the employees’ needs, individual and group incentives reward high performance. Such solutions generally determine a part of the total reward that depends on employee performance. According to Stewart and Brown (2020), the incentives should motivate the employees by placing a substantial part of compensation at risk. Individual rewards can be designed as piece-rate incentives or commissions for the employees who have high performance. A merit pay increase is based on the evaluation of overall performance during an extended period.
It is often assigned after an assessment, yearly performance increase, or qualification improvement. Team incentives have a similar nature, but they focus on group performance. A goal-based reward is an achievement-oriented incentive that motivates teamwork and the performance increase during a determined period. Moreover, teams of workers may receive bonuses from gainsharing or profit-sharing incentives when they perform well. Such approaches help to align the interests of employees and owners and enhance the positive outcomes for the company.
Compensation structure defines the differences in employee pay not among companies but within one organization. This model describes how the companies see their jobs and employers and what are their priorities in compensation. Based on the HR strategy, the company decides whether the payment for a particular job is uniform or variable, or whether it is relational or transactional (Stewart and Brown, 2020).
The structure of compensation also depends on what factor is considered as crucial in a company, and the two key models are job-based and skill-based pay. For the job-based payment, jibs are analyzed, and some numerical values are assigned to them according to their complexity and importance. However, many companies tend to compete for highly qualified workers who have higher long-term potential or to promote education in an organization. To motivate employees to develop new competencies, skill-based pay is used when people are rewarded for their qualities, which may not be necessary for job performance.
A compensation strategy based on the skills and competencies of the worker is called skill-based pay. This approach emphasizes the people-centeredness of companies instead of job accentuation. As Stewart and Brown (2020) define, a skill-based approach “pays people relative to their long‐term value rather than relative to the value of their current position” (p.419). Thus, the system aims to encourage education and skill development that are essential for the company’s strategic vision. Ledford et al. (2020) claim that there is a global tendency to skill-based pay with 27 percent of companies implementing it for executives, 36 percent – for managerial positions, and 28 percent – for other jobs. This trend proves that the system has been recognized worldwide as the facilitator for the development of employees.
Advantages of Skill-Based Pay
The key advantage of skill-based pay is that it motivates people to develop new skills. These competencies may not be required for the current position, but when they align with the company’s strategy, they may bring long-term potential. Moreover, skilled workers may initiate improvements and advancements and become emerging leaders in their companies. This approach can solve many staffing problems in the future, providing a stable source for internal recruitment and promotion. Furthermore, the ability of the companies to attract the best workers due to skill-based pay can create a competitive advantage.
Disadvantages of Skill-Based Pay
Despite the evident benefits of skill-based pay, there are several disadvantages that prevent the system from more rapid popularization. The high cost of such systems is among the most critical issues. Individual pay rates increase due to additional competencies that do not bring direct use for the company. Moreover, the investments made into the training of the employees do not pay off immediately and are sometimes burdensome for the companies. The process of assessment and reassessment of the skills requires administrative complexity and thus results in higher expenses. Besides monetary disadvantages, there are other issues that are not related to money. It is often challenging to assess skills that are not directly linked to performance, so the likelihood of mistakes increases.
Governmental Regulation of Compensation
Apart from the companies’ strategies and market forces, legal governance also shapes the compensation packages. In the U.S., the Fair Labor Standards Act (FLSA) regulates non-exempt employees’ work and pay (Stewart & Brown, 2020). The list of these employees includes those who get an hourly wage that has to be carefully recorded. The case of Nordstrom Department Stores is the situation when “sales associates failed to record hours they spent making deliveries and doing small tasks to facilitate sales” (Stewart & Brown, 2020, p. 440). The benefits they got from doing those duties covered the extra hours of work, but the procedural incorrectness led to a serious case, and the company had to seek solutions.
Other requirements regulated by the act include the minimum wage, overtime rate, equal pay, and restrictions on child labor. The failure to adhere to the rules leads to a violation of human rights, which is the issue with which the companies do not desire to be associated. Nevertheless, such cases still occur, especially in developing countries. One of the incidents of child labor exploitation by Nestle in the Ivory Coast caused a global scandal and undermined the not-so-perfect reputation of the organization (Wijesinghe, 2018). FLSA also controls that people of different gender, race, or physical ability are treated equally and get the same compensation. Thus, the design of the compensation package should be checked with the legal regulations to avoid employee rights violations.
The total compensation package usually consists of base pay, individual or group incentives, and employee benefits. The reward structure, based on the strategy, defines a proportion of each component. The base pay can be chosen either according to the job- or skill-based system of payment, when people are paid for their skill level and not for the job characteristics. Despite high costs, the competency-oriented reward is a recent trend in compensation management. These are not the only factors that determine the compensation package, as the companies have to adhere to multiple rules and regulations that protect human rights and ensure equality at the workplace.
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