Human Capital

The 8 Factors
Deloittes job evaluation approach
The 8 Factors
Sustaining a culture of continuous learning

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 The 8 Factors
Sustaining a culture of continuous learning

Contents

Page

The talent crisis is real. Are you ready? 4

Rewards should remain your organisations priority 6

So how does job evaluation fit into all of this? 7

Going beyond internal equity 10

A brief understanding of job evaluation 11

Can we fairly compare apples to oranges? 12

Deloittes 8 Factors of job evaluation 13

Which factors matter most to your organisation? 16

Reward your people and organisation 18

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The 8 Factors
Sustaining a culture of continuous learning

The talent crisis is real. Are you ready?

Talent today has evolved from a traditionally HR
concern to a key business issue, ranking high
on many CEOs and top executives priority
lists. Businesses are paying more attention to
talent than ever before, and with good reason:
the imminent retirement of the baby boomer
generation, coupled with an ageing workforce,
mean that organisations already face a brain
drain of skills and experience.
Attracting and retaining the right people has
never been so important. Given the current
talent shortage, its vital to understand the new
shape of todays workforce and design your
talent management strategy accordingly.
Changing nature of work. Globalisation and
technology have changed the way people and
organisations communicate, and ultimately
work. The concept of the virtual workplace has
become more and more widespread, resulting
in changes to when, where, and how work gets
done.
Supply and demand. The average age of
employees continues to rise, highlighting the
upcoming baby boomer retirement. Knowledge
retention is also an issue, as businesses face a
decrease in the number of middle managers.
The overall demand for workers is already
beginning to exceed supply.

So whats driving todays talent market? A proactive approach to these trends will keep
you one step ahead in the war for talent.
Shifting demographics. The global working
population looks dramatically different from Are you ready?
30 years ago, as the proportion of women
and racial/ethnic minorities in the workforce
continues to rise.

Values and expectations. The first generation

to have grown up with the internet has begun
to enter the workforce, and theyve brought
their major values flexibility, mobility, and
personal development with them. But those
values arent exclusive to Gen-X or Gen-Y; many
baby boomers and veterans want the same
things their adult children do, causing a shift in
workplace expectations as a whole.

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 The 8 Factors
Sustaining a culture of continuous learning

In talent management circles, the term Total Rewards includes more

than compensation, benefits and perks. It encompasses all the tangible
and intangible elements of the work experience that affect an employees
on-the-job behaviour, including intangibles such as work/life balance,
corporate culture and opportunities for personal development.

Total rewards

Non-cash incentives Intrinsic rewards

Recognition programs
Develop-Deploy-Connect
Culture/environment
Communications
Reward delivery/administration
Global sourcing
Job enrichment
Work/life balance
Career advancement
Feedback
Vision and values

Total compensation

Health / Welfare Benefits Pension, post-

Equity retirement welfare
Perks and Supplemental
Executive Retirement
Plans

Total cash

Base Salary
Annual Cash Incentive
Long-term cash incentive
Annual merit pay

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The 8 Factors
Sustaining a culture of continuous learning

Rewards should remain your organisations

priority
We agree that there exists more than one
solution to talent, and more than one way to
combine them. The trick is finding the right
combination of solutions for your organisation.
Whatever combination you eventually settle on,
one element will always be an integral part of it.
In the 2008 Top Five Total Rewards Priorities
Survey, employers agreed that Total Rewards
programme plays a crucial role in their critical
workforce.
Todays employers are caught between trying to
cut reward costs, while improving the ability of
those rewards to attract, motivate, and retain
employees. At the same time, they face rising
costs of rewards and increased competition for
talent; hence maximising rewards efficiency
takes on added importance. The cost of total
rewards can often exceed 40% of a companys
revenue, but that 40% means nothing if its not
invested wisely. Where are those dollars going to
make the biggest difference?
Trying to figure out where to invest can be
tricky, as total rewards encompass all elements
of the work experience.
So where do you start?
Well, before you can get to where youre going,
you have to find out where you are.
Establish internal equity within your own
organisation first. Make sure youre committed
to the concept of equal work, equal pay; theres
no point in trying to create more value through
your employees if you dont know their value to
begin with.
Once you establish internal consistency and get
everyone on the same page, then you can tailor
your rewards programme to better meet your
employees needs.

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So how does job evaluation fit into all of this?
Job evaluation (JE) determines the relative
value of jobs within an organisation, which
enables you to establish that all-important
internal equity. If you want to put equal work
equal pay into practice, you first need to make
sure that it is equal work.
Any JE system worth its salt should strike a
balance between art and science. Of course you
cant fully eliminate subjectivity, but all methods
should use a consistent, systematic approach.
Remember too that a JE evaluates the content,
roles, and responsibilities of the job not the
people performing it.
The 8 Factors
Sustaining a culture of continuous learning
In its simplest form, JE orders jobs by rank.
On the other hand, an analytical JE assigns
scores to jobs, going beyond simple ranking to
quantifying job value.
Effectively, you need the latter to provide a fair,
defensible basis for a rewards structure.
Its not enough to simply know that one job has
more value to your organisation compared to
another; you need to know how much more
value that job holds, and begin to determine
your rewards philosophy from there.
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The 8 Factors
Sustaining a culture of continuous learning

Take the test

The need for a JE may be triggered internally or externally, by one or several factors. Heres a quick
test to see if your organisation would require JE. (Check all that apply.)

Internal Triggers External Triggers

o Employee grievances with current rewards o Increased competition for critical talent
package
o Organisation is entering a new market or
o A need to maximise rewards efficiency offering new services

o A need to standardise rewards structure o Significant change in competitors rewards

packages
o An unexpected or unexplained increase
in employee turnover, especially in critical
workforce segments

o An unexpected or unexplained decrease in

employee productivity

o Significant introduction of new job or revision

of existing jobs

o A merger, acquisition, or divestiture

o A significant shift in business model or strategy

o Organisation redesign / transformation

If you checked one or more boxes, then you should conduct JE for your organisation. JE may not
directly alleviate some of these triggers; however, it acts as a stepping stone and foundation for
solutions that will.

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 The 8 Factors
Sustaining a culture of continuous learning

A well-executed job evaluation lays the groundwork for strong HR

solutions such as Job Design, Organisation Design, Salary Structure, Job
Grading, or Career Pathing.

HR Solutions

Job Design Organisation Salary Job Grading Career Pathing

Design Structure

Encompassing Comprising Ensuring Determining Paving the

the design of the design of internal and the clear career structure
workgroups the hierarchy, external equity delineation for the
and individual roles and of the basic and number of organisation,
roles, responsibilities, salary, including grades within encompassing
responsibilities, competencies, the formulation the organisation shared and
accountabilities, and metrics of of the minimum to form the specialised
competencies, the functional/ and maximum basis of competencies,
and metrics business unit/ pay, midpoint compensation capability
to enable process-driven and range and benefits development
deployment structures. differential, and structure, job plan, leadership
of process, This includes overlapping levels and development
technology, or organisation degree of the families, and plan, and
compliance- sizing and salary structure, reporting training needs
driven change. staffing in order to hierarchy. analysis,
This helps requirements. administer the in order to
to align an orgnisations manage the
individuals pay philosophy. continuous
job with the progression of
organisations the employees.
objectives.

Job Evaluation

The loftiest edifices need the deepest foundations.-- George Santayana

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The 8 Factors
Sustaining a culture of continuous learning
Going beyond internal equity
Beyond establishing internal equity for your
rewards programme, the solid foundation JE
provides also serves as a stepping stone to
many other HR solutions. Furthermore, JE has
additional benefits in and of itself for your
organisation as a whole:
It helps to set and clarify standards. After a
JE, your employees should be clear on their own
roles and responsibilities, as well as their jobs
relationship to other roles in your organisation.
Your HR department should also have a better
understanding of everyones roles along with
your organisations structure that allows them
to tailor job descriptions, recruitment, and
training appropriately.
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It makes your HR more efficient. After a JE,
you may realise that you have a lot of people
doing essentially the same job, except they
all have different titles. You can potentially
eliminate a lot of redundant job titles and
descriptions, creating a leaner, more efficient
organisation.
It serves as a wake-up call. Is someones
paycheck off the charts for the work they do?
Or is someone getting underpaid compared to
another person with similar responsibilities? Or
perhaps when participating in the JE, you found
out that someone is actually working in that
abandoned cubicle (well, the one you thought
was abandoned). By conducting a JE, you can
identify pay anomalies, poor working conditions,
or environmental hazards you may not have
noticed otherwise.

A brief understanding of job evaluation
There are two widely recognised approaches to
JE: non-analytical and analytical.
Non-analytical JEs include job ranking and whole
job classification, and involve simply ranking jobs
according to their relative value. This approach
has the advantages of being simple, fast and
relatively inexpensive. However, it does not
consider different compensable factors of a job
(for instance, the physical effort it requires) and
is more subjective, making it difficult to ensure
pay equity compliance.
In contrast, analytical JEs use a number of
compensable factors that are broadly defined,
and assign points to each factor. These include
point factor rating and weighted point factor
comparison. Therefore, analytical JEs provide an
objective, systematic approach to quantifying
job value, ensuring pay equity compliance.
The 8 Factors
Sustaining a culture of continuous learning
From Deloittes point of view, the weighted
point factor comparison method is an effective
mix of both qualitative and quantitative
measures, as it:
Uses a number of compensable factors that
are broadly defined (a compensable factor is
a job element that is valued by the
organisation and that they are willing to pay
for)
Assigns points to each factor, where each
factor is typically weighted differently within
the overall framework based on a number of
quantitative and qualitative considerations.
In fact, a weighted point factor comparison can
be applied to more than just jobs; you can even
compare apples to oranges!
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The 8 Factors
Sustaining a culture of continuous learning

Can we fairly compare apples to oranges?

We sure can.

As an example, we can compare apples and oranges in two main aspects: physical appearance, and
properties when eaten.

These criteria are then further divided into eight specific factors: Texture, Colour, Weight, Size,
Taste, Calories, Water content, and Nutrional value.

Apple Factors Orange

Texture
(1: Smooth; 7: Rough)
Colour
(1: Light; 9: Dark)
Weight
(1: Light; 10: Heavy)
Size
(1: Small; 7: Large)
Taste
(1: Sour; 8: Sweet)
Calories
(1: Low; 8: High)
Water content
(1: Low; 8: High)
Nutritional value
(1: Low; 9: High)

Appearance

Effect

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 The 8 Factors
Sustaining a culture of continuous learning

Deloittes 8 Factors of job evaluation

Similarly, every job has four standard criteria recognised in all pay equity legislation. When making
a pay equity claim, the claimant has to be able to show that his or her job holds equal value to
another one, based on an analysis of these four criteria: Skill, Effort, Responsibility and Working
Conditions.

Accountant Factors Secretary

Knowledge
Minimum level of job knowledge (skills, expertise,
know-how and ability) required to do the job.
Interpersonal Skills
Job requirements for using interpersonal
communication skills. Please consider all forms of
interpersonal contact.
Physical, Visual and Auditory Demands
Demands placed upon employee that are not
creative or mental job requirements. E.g. manual
dexterity.
Complexity
Amount and difficulty of analysis, problem solving
and reasoning required to perform job related duties.
Accountability and Decision Making
Level of accountability and decision making
associated with position. E.g. level of work review or
supervision received.

Impact
Measures impact of the work as a result of activities
performed.

Development and Leadership of Others

Direct accountability for supervision of others.

Environmental Working Conditions

Likelihood, frequency, and severity of exposure to
undesirable features in the work environment.

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The 8 Factors
Sustaining a culture of continuous learning

Try it!

Factors

Knowledge
(1: Basic; 8: Extensive)

Interpersonal Skills
(1: Very limited; 9: Very high)

Physical, Visual and Auditory Demands

(1: Very minor & low frequency; 9: Very high & high
frequency)

Complexity
(1: Very limited; 9: Extremely high/Very substantial)

Accountability and Decision Making

(1: Very limited; 9: Extreme)

Impact
(1: Very limited; 9: Extreme)

Development and Leadership of Others

(1: Guidance and advice; 9: Multiple and large
group responsibility)

Environmental Working Conditions

(1: Does not apply; 7: Extremely adverse/severe &
high frequency)

Skill Effort Responsibility Working conditions

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 The 8 Factors
Sustaining a culture of continuous learning

Deloittes 8 Factors are developed based on these criteria, providing a

gender-neutral, pay equity compliant tool that is equally applicable to
all positions within an organisation.

Interpersonal
Skill (IS)
Physical,
Visual and
Knowledge Auditory
Demands
(PVA)

Accountability
and Decision The 8 Factors Complexity
Making (ADM)

Environmental
Impact Working
Conditions
Development (EWC)
and
Leadership of
Others (DLO)

Skill Effort Responsibility Working conditions

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The 8 Factors
Sustaining a culture of continuous learning

Which factors matter most to your

organisation?
The opposite page shows a JE for an organisation that places equal weight on all eight factors.
However, in practice, every organisation has different needs and priorities.

The 8 Factors are carefully tailored and weighted to give you a more accurate picture of a jobs
value specific to your organisation.

Organisation I
IS
If this organisation considers Knowledge
knowledge and complexity PVA
especially crucial to their
employee productivity, their 8
Factors could look like this:
ADM The 8 Factors Complexity

Impact EWC

DLO

Organisation II
IS
If this organisation values Knowledge
responsibility most highly, PVA
their 8 Factors could look
like this:

ADM The 8 Factors Complexity

EWC
Impact
DLO

Skill Effort Responsibility Working conditions

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 The 8 Factors
Sustaining a culture of continuous learning

Benefits for employees

More effective total
rewards programme
Greater trust and
Investment in JE Job evaluation understanding of
Time
organisation
Money
Effort

Direct ROI
Organisation More effective Employees
HR processes

Indirect ROI
(passed on through employee benefits).
Increased employee satisfaction and productivity

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The 8 Factors
Sustaining a culture of continuous learning

Reward your people and organisation

JE gives you a foundation for far more than just JE by itself wont automatically solve your talent
total rewards. It strengthens your HR function as problems, increase reward efficiency or maintain
a whole, directly benefitting the organisation. internal equity. But it will give you a great
springboard from which to do so. A stronger HR
However, JEs direct ROI is just one part of it; it function, reward efficiency, and higher employee
brings just as much value to the table through retention are just a step away.
your employees. A JE analysis provides the facts
you need to establish internal equity. From
there, you can be sure of aligning your rewards
programme with pay equity so everyone gets
rewarded appropriately for the work they do.
That increased satisfaction and loyalty gets
passed on to your organisation, in the form of
greater productivity and retention.

Not to mention the very act of conducting JE

builds trust between employer and employee.
Doing JE as a joint exercise fosters better
understanding of your rewards programme, and
that in turn gives it more credibility.

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Contact us

Andrew Lee, Director

Human Capital Services Group
Deloitte Consulting Malaysia

Tel: +603 7723 6500

Fax: +603 7726 3986
Email: myHC@deloitte.com

Deloitte
Level 19, Uptown 1,
1 Jalan SS21/58, Damansara Uptown
47400 Petaling Jaya, Selangor
Malaysia
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