A Very Brief Overview on Internal Alignment

A Very Brief Overview on
Internal Alignment
Internal alignment, often called internal equity,
refers to the pay relationships among different
jobs/skills/competencies within a single
organization.
(Milkovich, Newman, & Gerhart, 2014, p. 72)
Pay Structure
180
Engineer
160
Senior
Engineer
Systems
Engineer
Lead Engineer
140
120
100
80
60
40
20
0
Compensation
(in thousands of $)
(Milkovich & Newman, 2008)
Advisor
Engineer
Consultant
Engineer
Consequences of an Internally Aligned Structure
Undertake training
Increase experience
Pay structure
Reduce turnover
Facilitate career progression
Facilitate performance
Reduce pay-related
grievances
Reduce pay-related work
stoppages
(Milkovich, Newman, & Gerhart, 2011, p. 86)
Differentials

The pay differences between levels

Pay is determined by:
– Knowledge/ skills involved
– Working conditions
– Valued addition to the company

Intention of these differentials:
– To motivate people to strive for promotion to a
higher-paying level
(Milkovich, Newman, & Gerhart, 2011)
Guidance from the Evidence

Equity theory: Fairness
– Research suggests that employees judge fairness
by multiple comparisons
 Comparing to jobs similar to their own at same employer
 Comparing their job to other jobs at same employer
 Comparing their jobs’ pay against external pay levels
 Comparing their pay for similar work at different time
periods
(Milkovich, Newman, & Gerhart, 2011)
Equity Theory – Adams (1965)
“Person”
“Comparison Other”
“Inputs”
“Inputs”
compared to
“Outcomes”
“Outcomes”
A “social comparison” theory of motivation. Person compares his or her ratio of
Inputs to Outcomes with the Inputs to Outcomes ratio for a Comparison Other.
Ratios that are not “in balance” are perceived as inequitable and may trigger
actions to redress the imbalance
Guidance from the Evidence

Impact of internal structures depends on CONTEXT in
which they operate

More hierarchical structures are related to greater
performance when the work flow depends on individual
contributors

High performers quit less under more hierarchical systems
when:
 Pay is based on performance rather than seniority
 When people have knowledge of the structure

But when close collaboration and sharing of knowledge
are required, more egalitarian structures are related to
greater performance
(Milkovich, Newman, & Gerhart, 2011)
Compensation and Job/Work Analysis
Ex. 4.3: Determining the Internal Job Structure
Internal
relationships in
organization
Work analysis
Job
descriptions
Job evaluation
Collect
information
about the
nature of
specific jobs
(Adapted from Milkovich, Newman, & Gerhart, 2014, p. 103)
Job structure
Work/Job Analysis
The systematic process of collecting
information that identifies similarities
and differences in the work.
(adapted from Milkovich, Newman, & Gerhart, 2014)
Why Perform Work Analysis?

Potential uses exist for every major human
resource function

An internal structure provides a work-related
rationale for pay differences

Uses of work analysis in compensation
 Establishes similarities and differences
in work content of jobs
 Helps establish an internally
fair and aligned job structure
Methods of Data Collection
(Psy 3315)
Observation
Interviews (individual or group)
Questionnaires
Diaries
Equipment
Review of existing records/literature
Study of equipment design specifications
Do the work yourself
Generic Categories of Information Collected
(Psy 3315)
Job Content
Duties, tasks, activities
Job KSAOs or
Competencies
Knowledge, skills, abilities and other
characteristics (KSAOs)
Job Context
Purpose, accountability, responsibility,
supervision received or given,
consequences of error, physical
demands, working conditions, shifts,
equipment, etc.
(Bemis, Belenky, & Soder, 1983)
Work Analysis: Levels of Descriptors
(Brannick, Levine, & Morgeson, 2007, p. 13)
Conventional Work Analysis Techniques

Task Inventory Analysis

Critical Incident Technique

Position Analysis Questionnaire (PAQ)

Functional Job Analysis (FJA)

Methods Analysis (Motion Study)

Guidelines-Oriented Job Analysis

Management Position Description Questionnaire (MPDQ)

And many more!
Ex. 4.6:
Typical
Data
Collected
for Work
Analysis
(Milkovich, Newman, & Gerhart, 2014, p. 107)
The Judgment Call
“How much detail is needed to make pay decisions?”
Typical Sources
(Psy 3315)
Work analyst him/herself
Subject matter experts (SMEs)
•
job incumbent(s)
•
immediate supervisor(s)
•
others who have previously performed job
Technical expert (e.g., prof in field)
Trainers
Clients or customers
Textbooks
Judging Work Analysis
Reliability
Validity
Up to Date/Currency?
Acceptability
Usefulness/
Practicality
(Milkovich & Newman, 2014)
Job Description Categories (Psy 3315)
I.
JOB IDENTIFICATION
II.
PURPOSE OF JOB/PLACE IN ORGANIZATION
III.
JOB SUMMARY
IV.
ESSENTIAL FUNCTIONS
V.
JOB DUTIES & RESPONSIBILITIES
VI.
ACCOUNTABILITIES/EMPLOYMENT STANDARDS
VII.
JOB SPECIFICATIONS
VIII. WORKING CONDITIONS/HAZARDS/HOURS
IX.
PRODUCTS/TOOLS/EQUIPMENT USED
X.
EXTERNAL & INTERNAL CONTACTS
(Carrell, Elbert, & Hatfield, 1995; Gael, 1988)
Times for Reviewing Jobs and Revising Descriptions

Assigning a new incumbent to a job

When major changes are made in product or outputs
provided by work unit or individual

Introduction of new equipment,
methods, or procedures to workplace

Reorganization of work unit

Implementation of a new pay system

When a new responsibility (a major work activity area) is
added to job

JCAHO Review (in healthcare settings)

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