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23-Ind-A2 Analysis and Design of Work · December 2015

Question 7 of 7: Point-System Job Evaluation and Direct Financial Incentive Plans

Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)

Notes on this paper

National Exams — December 2015 — 98-Ind-A2 Analysis and Design of Work. Three-hour, closed-book exam (approved Casio/Sharp calculator only); any five of the seven questions constitute a complete paper and only the first five answered in the answer book are marked — all seven are solved below for completeness. The source prints Question 3's second and third sub-parts both labelled “(iii)” in the question text (and the marking-scheme line repeats “(ii)” for the same slot) — a typesetting slip; they are answered here in the marking-scheme order (i)/(ii)/(iii), 8/6/6 marks.

Reference texts: Niebel & Freivalds, Niebel’s Methods, Standards, and Work Design (13th ed.) — operations analysis and process/flow charting, motion economy, multiple-machine assignment, stopwatch time study, performance rating and allowances, predetermined time systems (MTM/MOST), work sampling, and wage-incentive and job-evaluation systems.

Question 7: Point-System Job Evaluation and Direct Financial Incentive Plans (20 marks)

Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.

(i) Factors Generally Selected in a Point-System Job Evaluation Plan

A point-system plan rates every job against a common set of compensable factors, grouped under four generally recognized headings, each split into sub-factors and further into degrees with assigned point values:

Typical point-system compensable factors
Factor groupTypical sub-factors
Skilleducation/knowledge required, experience, initiative and ingenuity
Effortphysical demand, mental and/or visual demand
Responsibilityfor equipment or process, for material or product, for the safety of others, for the work of others
Working conditionssurroundings (heat, noise, dirt), hazards

Each sub-factor is defined by a written scale of degrees (e.g. “requires no prior experience” through “requires five or more years of directly related experience”), and each degree carries a point value reflecting the factor’s relative importance to the organization. A job’s total point score is the sum of the points earned on every sub-factor, and a wage curve is then fitted (by regression of current pay against total points for a set of benchmark jobs) to convert any job’s point total into a pay rate or grade.

(ii) Why the Point System Is Preferred Over Other Job Evaluation Methods

The main alternative methods — simple job ranking (ordering whole jobs from most to least valuable by holistic judgement), job classification (writing grade-level descriptions and fitting each job to the closest one), and factor comparison (allocating a portion of an agreed benchmark wage directly to each factor) — are each weaker on at least one of the dimensions the point system handles well. Ranking is a single holistic judgement with no documented reasoning, becomes unwieldy and inconsistent once there are more than a few dozen jobs, and offers nothing to defend a specific pay decision against a grievance. Job classification is coarser (jobs are slotted into a small number of grades rather than scored continuously) and depends on a subjective “best fit” judgement each time a job is placed. Factor comparison is mathematically powerful but unusually complex to install and explain, because it requires assigning actual wage dollars to each factor from the outset, tying the evaluation to a specific wage structure that then has to be maintained.

The point system is generally preferred because: it produces a quantitative, additive score that is easy to explain to employees and unions (points earned on each defined sub-factor, summed); it separates job evaluation from wage-rate setting — degrees and points are fixed once, and only the wage curve is later fitted to points, so the evaluation itself does not have to be redone when the pay structure changes; it scales cleanly to plants with hundreds of distinct jobs, since new jobs are simply scored against the same fixed factor/degree scales; and it supports statistical audit and pay-equity review, since a regression of pay against points across all jobs will reveal systematic under- or over-payment for a given point total.

(iii) Why the Standard Hour Plan Is the Most Commonly Used Direct Financial Plan

Under piecework the operator is paid a fixed rate per unit produced, so earnings scale continuously with output but swing with every fluctuation in work availability or difficulty, and quality/safety risk rises with pace. Under measured day work the pay rate is fixed for a period and reset only periodically from the operator’s demonstrated longer-run average performance, which gives income security but responds only slowly to a change in individual effort. The standard hour plan pays the operator’s guaranteed hourly rate for the number of standard hours earned (the standard time the completed output should have taken), rather than for clock hours worked or a per-unit rate.

The standard hour plan is the most commonly used of the three because it directly reuses the same engineered time-standard infrastructure (Question 4) the plant already maintains for planning, costing and scheduling, rather than requiring a separately negotiated piece-rate table for every part number; it smooths short-run output and machine-availability variation better than piecework, reducing earnings volatility and the grievance load that volatile piecework pay generates; it responds to individual performance immediately (unlike measured day work’s periodic reset), preserving a strong incentive; and because pay tracks percentage of standard rather than a per-unit dollar figure, it transfers cleanly across product-mix changes without renegotiating a rate for every new job, which a piece-rate shop must do constantly.

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