JOB EVALUATION EXERCISE: LIBERTY ENTERPRISES (D)
Liberty Enterprises is a small government contractor of specialized engineering products. Company facilities are located in Mobile and Dothan, AL Listed below are 10 benchmark jobs and their point values derived from an internal job evaluation of positions at Liberty Enterprises using the point method. You are going to construct a “wage line” based on the job point values and market rates for the 10 jobs presented below.
Job Job Points Administrative Assistant 160 Technical Writer 370 Accountant 410 Information System Manager 930 Treasurer 850 Engineering Manager 900 Mechanical Engineer 460 Purchasing Agent 350 Marketing Manager 650 Financial Analyst 430
(a) Using a total point range of 0-1400, establish 7 pay grades of 200 points each. Label the pay grades W1, W2, etc., up to W7. This data (job points) will be the X-axis of your wage line graph
Pay Grade
Job Points Range
W1
0-200
W2
201-400
W3
401-600
W4
601-800
W5
801-1000
W6
1001-1200
W7
1201-1400
(b) Use O*NET to identify the annual median market wages for each job. This wage data will comprise the Y-axis of your pay line graph.
Job
Annual Median Market Wage
Administrative Assistant
$44,280
Technical Writer
$80,050
Accountant
$79,880
Information System Manager
$169,510
Treasurer
$156,100
Engineering Manager
$165,370
Mechanical Engineer
$99,510
Purchasing Agent
$71,950
Marketing Manager
$157,620
Financial Analyst
$99,010
(c) Using Excel, SPSS, or another statistical program, determine the equation to construct a wage line representing the relationship between job points and annual median market wage for the AL data. Let “W” represent the median market wage and “P” represent the job points. The wage line will be of the form W = aP + b where “a” is the slope of the wage line and “b” is the constant (intercept of Y-axis).
W= 135.29 P=22569
(d) Based on the Excel trend lines in (c), which job(s) may be misclassified? Explain why you think misclassification exists, and identify what action the company should take?
(e) For each of the 5 jobs identified below (1) identify the wage grade and (2) calculate the estimated median market wage using the wage line equation for AL data. VP, Operations 1250 Marketing Coordinator 310 Field Sales Representative 550 Director, Compliance & Ethics 1050 Foreman 450
(f) Complete this exercise by submitting the answers to all the questions presented on the next two pages. Attach your Excel or SPSS graph to show how the wage line was determined.
Submitted by:
(a) Median Market Wages (from O*NET)
Job
Wage
Grade
Median Market
Wage (U.S.)
Median Market
Wage (AL)
Administrative Assistant
W1
$44,280
$38,940
Technical Writer
W2
$80,050
$79,830
Accountant
W3
$79,880
$65,930
Information Systems Manager
W5
$169,510
$132,840
Treasurer
W5
$156,100
$134,080
Engineering Manager
W5
$165,370
$158,450
Mechanical Engineer
W3
$99,510
$97,050
Purchasing Agent
W2
$71,950
$65,560
Marketing Manager
W4
$157,620
$113,460
Financial Analyst
W3
$99,010
$84,990
(b) What concern(s), if any, do you have about the market “median” wages displayed on O*NET?
(c) Which two jobs show the most significant difference in the market wage between the U.S. and AL data? What factors account for these differences?
(d) What is the Wage Line Equation for AL data? [W = aP + b]
(e) Based on the Excel trend line for the AL data, which job(s) may be misclassified? Why? What action should the company take?
(f) For this exercise, should Liberty Enterprises’ wage line be based on U.S. or AL data? Why?
(g) Using the AL wage line equation, calculate the estimated median wage for each of the following jobs. [This approach is used to slot jobs for which reliable market data may not be available.]
Job
Wage Grade
Estimated Median Wage (AL)
VP, Operations
Marketing Coordinator
Field Sales Representative
Director, Compliance and Ethics
Foreman
NOTE: Include with your response a copy of your original EXCEL or SPSS analysis showing the wage line graph for the Alabama data. Responses to other questions will not be accepted without the wage line graph.
Wage Line Graph
160 370 410 930 850 900 460 350 650 430 38940 79830 65930 132840 134080 158450 97050 65560 113460 84990
[NOTE: O*NET annual median wages tend to be lower than those encountered in actual business organizations. For actual market pricing, salary data provided by a reputable consulting firm would be preferred. Such a survey will also reflect differences in industry, organizational size, location, etc.]
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