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23-Ind-A2 Analysis and Design of Work · May 2018

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 — May 2018 — 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’s marking-scheme line for Question 3 mislabels its final sub-part “(ii)” a second time instead of “(iii)”; it is answered here in the natural (i)/(ii)/(iii) order that matches the question text itself, 5/5/10 marks.

Reference texts: Niebel & Freivalds, Niebel’s Methods, Standards, and Work Design (13th ed.) — operations analysis, workplace/tool design and motion economy, stopwatch time study, performance rating and allowances, predetermined time systems (MTM/MOST), work sampling, 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.

The full derivation is reproduced below (independently re-verified against the source) rather than re-derived from scratch.

(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, typically grouped under four broad headings, each broken into sub-factors and further into graduated degrees carrying assigned point values: (1) skill — education/training required, prior experience needed, and the initiative or ingenuity the job demands; (2) effort — physical demand (force, endurance, repetitive strain exposure) and mental/visual demand (concentration, complexity of judgement required); (3) responsibility — for equipment or process, for material or product quality, for the safety of others, and for the work or supervision of others; and (4) working conditions — the physical environment and any hazards the job exposes the worker to. Each job is rated degree by degree against every factor, and the sum of the assigned points becomes that job’s total score, which is then converted to a pay grade via a points-to-dollars conversion scale.

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

Compared with the two simpler whole-job methods — ranking (jobs ordered from highest to lowest as a single overall judgement, with no fixed measurement scale, quickly becoming unmanageable and highly subjective once the number of distinct jobs grows) and classification (jobs slotted into a small number of predefined grade descriptions, which is coarse and still relies on a largely subjective overall fit judgement) — the point system breaks each job into several weighted, separately rated factors, which reduces the “halo effect” of a single overall impression dominating the score and produces a numerical result that is far more precise and more easily defended if challenged. Compared with factor comparison (which similarly rates jobs against several factors but allocates actual wage dollars directly against a small set of benchmark jobs), the point system is more stable over time: a point manual, once built, does not need re-derivation as wage rates for the benchmark jobs change, and new jobs can be slotted in against the existing degree definitions without disturbing the whole structure. The point system is also generally more acceptable to employees and their representatives, since each factor is rated and explained separately rather than folded into one opaque overall number, making the basis for any given job’s score, and any pay differential between two jobs, transparent and auditable.

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

Of the three direct financial incentive plans, the standard hour plan pays the operator their guaranteed hourly (day) rate for the number of standard hours EARNED (i.e., the standard time the completed output should have taken), rather than a per-piece rate (piecework) or a periodically-reset fixed rate based on longer-run average performance (measured day work). It is the most widely used of the three for several converging reasons: (1) it directly reuses the SAME engineered time-standard infrastructure (Question 4) the plant already maintains for planning, scheduling and costing, rather than requiring a separately negotiated piece-rate table renegotiated for every part number as piecework does; (2) it smooths short-term output and machine-availability variation far better than piecework — a slightly slow hour is absorbed against a slightly fast one within the same pay period, reducing day-to-day earnings volatility and the grievance load that volatile piece-rate earnings generate; (3) because pay tracks a PERCENTAGE of standard rather than a fixed dollar-per-unit figure, it transfers cleanly across product-mix changes without renegotiating a rate every time the product changes, unlike piecework; and (4) unlike measured day work, it still rewards output within the current pay period rather than only on the next review cycle, preserving a more immediate, motivating link between effort and pay while avoiding piecework’s quality-shortcut and unsafe-pace risk at very high personal paces.

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