MicroPharm BioSciences (MPBS) is a small company, which has demonstrated its rapid growth. Despite the successful financial performance, the organization has ineffective practices towards providing compensation and benefits to its employees. In particular, MPBS needs systematic policies in job evaluation. A new approach should align with the firm’s strategic focus and address its key HR issues. The point-based method is the most appropriate one because it has demonstrated its high efficiency in other companies.
Description of the Point-Based Method and Its Impact on Job Performance
The point-based approach responds to the needs of MPBS more than other methods. It offers dividing jobs depending on such measurable factors as training, skills, ability, responsibility, efforts, and others. Then, the points are set to each one. The value is provided concerning the effects of performing a certain task. In the end, the points for each factor are summarized. These totals allow determining payments. Employees that have the positions completed with a greater number of points receive higher salaries (Eargle, 2013).
The point-based method of job evaluation has a range of valuable advantages. First, most experts and businesses accept this approach supposing that it is reliable (Eargle, 2013). It is important for MPBS because the company operates in different countries including the United States, England, Germany, and Israel. Using the most common method of job evaluation will help to avoid the issues caused by an inability of personnel to understand the new system.
Second, human judgment is minimal because there are detailed explanations concerning ratings (Eargle, 2013). It will address the issue of giving preferences to the scientific staff of MPBS. After the introduction of a new evaluation approach, administrative, sales, management, and technical occupational groups will be assessed objectively. This process will motivate them to demonstrate greater productivity.
Third, the point-based method provides significant accuracy due to evaluating job factors separately. It is more objective than assessing the task as a whole unit (Eargle, 2013). This characteristic of the evaluation method is beneficial for MPBS. It will help the company to deal with inconsistencies in salaries across the divisions. Thus, there have been some discrepancies even within teams in a single department. The evaluation of discrete job factors will address this issue. Besides, the assessment helps to divide positions into classes and grades (Eargle, 2013). This aspect is also important for MPBS. The reason is that the company does not have any distinct classification of jobs now. It has a negative impact on job performance.
If the method is used properly, the organization will address such problems as gender, age or racial discrimination as well as some issues caused by the employee’s disability (Eargle, 2013). It is an important benefit for MPBS as the company is displayed as an equal opportunity employer. In addition, half of the employees are under the age of thirty-five. Meanwhile, the average age of the personnel is forty. It means that the company has people from different generations. Therefore, the tool for addressing the risks of age discrimination is really necessary.
Moreover, the point-based approach has been successfully used for a long time. This method has proved its effectiveness in varied areas including manufacturing, service, and management (Eargle, 2013). The following characteristics of the point-based approach mean that MPBS will definitely deal with the inconsistency of HR practices.
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Therefore, such an approach of job evaluation can help to address the key HR and compensation issues found at MPBS. In particular, it allows setting reasonable salaries for all employees. Besides, the approach will destroy the hegemony of scientific staff over the rest of the company’s workers. In general, employees will get a clear understanding of the factors that influence the size of their compensation. It will motivate them to work productively and reduce misunderstanding between them. HR practices will become consistent.
The Comparison of a Point-Based, Rating and Classification Method
It has already been indicated that a point-based method offers the determining major elements (or factors) of each job later separating them into components. Each part is evaluated. The job with a greater number of points is considered as the most valuable one. The method can address many of MPBS’s issues related to HR. However, it requires time and costs. Another drawback of the approach is its complexity. The method lacks flexibility. Therefore, the companies that change rapidly could not use it (Chand, n. d.). The last aspect could be significant for MPBS because it is characterized by its continuous development.
Unlike the point-based approach, the rating method is non-quantitative. It involves comparing whole jobs and putting them in order depending on their importance for the organization (Chand, n.d.). However, this method is very subjective. There are no definite standards for measuring the value of positions. Therefore, the rating approach is not suitable for MPBS. It could even increase the inconsistency of the current HR policies. The small cost, simplicity and insignificant time spending do not justify the drawbacks of the evaluation method for MPBS.
Another example of the non-quantitative approach to job evaluation is the classification method. Positions are divided into classes by the specific body. A job class is considered a group of various jobs requiring similar skills or efforts (Chand, n. d.). They are identified through analyzing the data from job analysis. Each job class has a fixed wage rate. However, this method is not suitable for big companies. The reason is that it cannot classify complex jobs. Another disadvantage of the approach is the dependence on the opinions of HR specialists assigning classes (Eargle, 2013). These components demonstrate that the classifying method is not appropriate for MPBS.
The comparison of point-based, rating and classification methods demonstrates that the method of job evaluation for MPBS has been chosen correctly. It contains all the components that the company needs including clear standards, minimized effects of human judgments, high accuracy and comprehensiveness, easiness of putting jobs in different categories and consistency. Other approaches do not have all the following elements. Therefore, they cannot be used effectively in the organization.
The List of Compensable Factors and Their Weights for a Point-Based Method
The list of compensable factors and the value may vary across the divisions. The reason is that scientific, administrative, sales, management and technical occupational groups have different requirements. Nevertheless, the major indicators are training, initiative, responsibility, job conditions and supervision. The technical staff could have the following factor value: training (33.3%), initiative (21.5%), responsibility (22.6%), job conditions (10.8%) and supervision (10.8%). The management occupational group might need a long list of compensable factors due to a greater number of duties. Thus, it could include knowledge (41.9%), supervision (15.1%), guidelines (14.5%), complexity (9.9%), scope and influence (10.1 %), individual contact (2.6%), the purpose of contact (5%), physical requirements (0.9%), and work environment (1.1%).
Point-Based Method and MPBS’s Strategic Focus
One of the company’s values is investing in its staff’s constant development and. The recommended method aligns with this value because it encourages employees to develop themselves. In particular, expanding knowledge and improving skills through training can result in increasing the wage rate. Besides, the point-based method could help to attract experienced staff with the necessary knowledge. The recommended approach is the most common one to job evaluation. It means that potential employees will understand that the company values its staff and offers competitive compensation. Finally, the point-based method allows the organization to remain an equal opportunity employer. All these benefits would help to keep the workers being able to make the MPBS leader of the market.
The Key Challenges to Effective Implementation of Point-Based Method
MPBS faces some difficulties in administrative and management areas. Therefore, it could have issues with the implementation of the recommended approach. The reason is that the point-based method is difficult to understand and perform. Employees need to spend much time and costs on writing compensable factors and values. The method involves mathematical procedures and outstanding clerical time. Overall, these issues could be easily addressed. However, it requires consistent and systematic practices, which are absent at MPBS.
Apart from that, the company operates in the industry, which requires high flexibility.
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The recommended method is time-consuming. Therefore, MPBS can have problems with keeping a high speed of its operations. Besides, the point-based method is expensive. The organization’s management may reject this idea and ask for something cheaper. Therefore, persuading executives might become one of the key challenges for this approach.
In conclusion, the most appropriate approach to job evaluation at MPBS is point-based. First, it aligns with the company’s strategic focus and can help keep the leading position in the market. Second, it minimizes human judgment. Third, this method is the most common one today; and it is very reliable. The recommended approach will allow the company to deal with major HR issues. However, MPBS could have some difficulties with its implementation because of its requirements for time and costs. The approach is also hard to understand and manage. Therefore, the organization will have issues with it due to inconsistent administrative and management practices. Besides, MPBS operates in such an industry demanding its significant flexibility. The point-based method of job evaluation might negatively affect the speed of change within the organization. Nevertheless, the benefits of the approach prevail over its drawbacks. Therefore, its introduction will greatly enhance job performance at MPBS if implemented.