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Job Evaluation Exercise-Liberty Enterprises (D)

  

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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