Jobsworth: The job pricing system
Available as an App on the Apple iPhone
So you need to find out what a job should be paid in a particular national marketplace and economic sector? The answer is now just seconds away with “Jobsworth” – the new App from FedEE.
Jobsworth uses a well established technique for establishing the market price per hour worked for a particular job. First, it is necessary to evaluate the job using a number of factors that have been found to determine job size. Then the system looks at what a job of that size would be paid in big, medium or small companies in a particular sector and country. The outcome is a median market price for the job. The median is the midpoint of all pay levels for such a job. For instance, if there was 101 jobs with the same characteristics and their pay levels were ranked then the median, or midpoint, salary would be the one received by the 51st in the ranking.
Remember, there may be other factors that determine an individual’s hourly pay level. For instance, they might receive a lot of benefits in kind from their employer – such as free housing, meals, a company car or crèche facilities for their children. Jobsworth only indicates what a job would be paid on a regular basis. This means its excludes premiums due to variable overtime or shiftwork arrangements and periodic payments such as profit share, commission and bonuses.
Of course, the pay a person actually receives will also normally be net of income tax, social security and other social charges. This will vary according to their individual circumstances and therefore Jobsworth only indicates “gross pay” levels (before such deductions).
The pay levels for Jobsworth relate to a common date and the latest figures are for January 1st 2012. You will therefore need to make a slight adjustment to take into account the passage of time between then and when you access the data.
How to use Jobsworth
The basic version of Jobsworth allows you to price jobs in the United Kingdom and the Irish Republic. The first upgrade allows you to access pay markets in a broader range of European countries and the final upgrade gives you access to the full range of countries and territories across Europe.
Remember to start by clicking on the App icon in order to complete the multiple choice questions relating to each job factor. The whole process from evaluating a job’s size to determining how much it should be paid should take 5-7 minutes for each job.
If you have any problems interpreting a particular question click on the adjacent box maked as “?” and it will give you some useful tips and guidance.
The system is based on the assumption that a job is evaluated as it should be performed – so poor or exceptionally high performance levels are not relevant. Moreover, an individual jobholder’s actual qualifications must not be the starting point for evaluation. For instance, if a jobholder has a University degree, but the job does not require it – then the qualification is not relevant. You should focus on the levels of education, training and experience that are “normal” for the job. It is also tempting to overrate a job’s responsibilities – particularly in such fields as logistics, health and safety and security. To take just one example: a typical security officer may think that as they have to guard a particular building at night then they are directly accountable for its entire capital value and operating costs. However, the substance of their accountability is not so direct, comprehensive or involved as the facilities manager who ensures the effective operation of the building or the architect who designed and oversaw its construction.
The most difficult section to complete will be that relating to “level of managerial risk”. Most jobs will have only “normal” risk taking and “significant” or “high” levels are largely reserved for “entrepreneurs” or company general mangers/board members (Directors).
Tutorial
Once you have downloaded the App into your mobile phone you will quickly learn how to operate with it. To assist you understand how it works here is an initial tutorial.
In the following example we shall be evaluating and pricing a typical first-level supervisory job in a UK mechanical engineering factory.
Section 1: Education, training and experienceSection 2: Accountability for annual cost/expense budgetsSection 3: Accountability for setting/meeting annual revenue or sales targetsSection 4: Level of controlSection 5: Time span of discretionSection 6: Level of danger/physical riskSection 7: level of managerial riskSection 8: Size of organisationSection 9: SectorSection 10: Country
Section 1: Education, training and experience
* Level of education: Select the minimum educational level necessary to carry out the job. The jobholder may possess higher (or even lower) levels of actual education/qualifications – but that will not be relevant.
* Level of training: ‘On the job training’ may include up to 1 day a week in formal education or at a training institution. ‘Premium professional/technical training’ consists of a high level, specialised skill that carries a significant premium in the labour market.
* Level of relevant experience: Only count experience that a job incumbent would normally expect to have gained before taking up such a position. Do not take into account the actual experience a particular incumbent may have gained, particularly in the case of lateral redeployment within an organisation.
NB: The level of anticipated experience is the time required within a particular occupational field or position for a typical employee to become fully competent. This is not related to age.
Example (Selected):
- Education: Basic school matriculation
- Training: More than 12 months, on the job
- Experience: 5-10 years relevant experience
Section 2: Accountability for annual cost/expense budgets
Budget range: All figures are annual amounts expressed in US dollars.
Direct accountability means that the jobholder has responsibility for spending revenue/capital budgets. Spending may be undertaken by the jobholder themselves or via subordinates.
Indirect accountability means that the jobholder has a significant support role in relation to those who have direct accountability. They may, for instance, be a cost accountant, training advisor or technical specialist working in support of line personnel.
Example
- Here we have two choices. Either the Supervisor has direct accountability for the payroll of his two subordinates ($45,000) or indirectly accountability for all the costs of his/her work unit ($200,000). We have chosen the former.
- Selected: $5,000 to $50,000 Direct
Section 3: Accountability for setting/meeting annual revenue or sales targets
Target range: This category is reserved for those who actively contribute to the generation of sales revenue. It would not generally apply to junior or purely administrative positions.
All figures are annual amounts expressed in US dollars
Direct accountability means that the jobholder has responsibility for generating sales revenue. Sales may be achieved by the jobholder themselves or via subordinates.
Indirect accountability means that the jobholder has a significant support role in relation to those who have direct accountability. They may, for instance, be an accounts receivable administrator, marketing analyst, or sales support supervisor.
Example
- The Supervisor is not accountable for generating revenue – either directly or indirectly.
- Selected: None or less than $10,000
Section 4: Level of control
The number of people managed/supervised: This measure is concerned with direct, vertical reporting relationships. If a jobholder supports a line manager they do not, in themselves, control the employees reporting to the manager they support. Supervisory, professional and managerial support positions are only accountable for the other support jobs in their own reporting line.
The number of subordinates should be estimated on a full-time equivalent basis, with a full week set at a minimum of 35 hours.
In the case of matrix organisations, only those staff in the jobholder’s direct, vertical reporting line should be included.
Subordinates may include fixed-term workers and contractors with contracts of 12 months or more. Temporary workers, outsourced staff and franchisees should be excluded.
Example
- The Supervisor has two full-time staff reporting to him/her.
- Selected: 2-5 people
Section 5: Time span of discretion
Time period: Time span of discretion is the period within which a jobholder may operate without authorisation from others. If, for example, a professional scientist may normally carry out a research project for four months before seeking approval from their supervisor, then their time span of discretion is one month to one year.
This measure may be related to an organisation’s individual corporate culture. In some companies, all plant managers are required to report in detail to their head office at the end of each day, whilst in others, detailed reports may be only required every quarter.
‘Reporting to others’ does not include updating peers, attending scheduled departmental meetings or preparing regular budgetary/progress statements. The purpose of reporting must involve being held to account by a more senior manager – to gain authorisation to continue a particular course of action, or to take a different course of action.
Example
- The Supervisor has formal discussions with the Production Manager once a week – at which he/she receives work instructions for the month ahead.
- Selected: One day to one week.
Section 6: Level of danger/physical risk
Hazards: In most companies the majority of jobs are subject to a low level of physical risk.
Intermediate physical risk’ means that, in spite of normal health and safety measures, a typical jobholder will have more than a 20% chance of being injured at some time during their working life, requiring hospital treatment and at least one month off work. Such situations do not include normal business travel, or injuries caused by breaking health and safety regulations. They may, however, arise from travel to politically unstable countries or driving a heavy goods vehicle.
‘High physical risk’ means that the jobholder must work in exceptionally hazardous environments and/or be subject to abnormal physical conditions. Typical jobs in this category are a mining engineer, steeplejack, trawler man or prison officer.
Example
- In this case the Supervisor concerned is exposed to a modest level of physical risk as he/she is responsible for the maintenance and repair of equipment when it is still in use.
- Selected: Intermediate physical risk
Section 7: level of managerial risk
The level of impact refers to the organisational unit within which an individual normally operates. The unit for a shop floor worker might be their shift team, whilst the primary impact level of a sales administrator would be their department. A transport manager, on the other hand, could be operating at a subsidiary or regional level.
For the majority of employees the business environment is subject to ‘normal risk’. Business risk should not include the chances of becoming economically redundant, unless the impact of the job is so fundamental that the riskiness of its decisions could affect the future survival of the enterprise as a whole.
A typical high risk business environment is a company with complex products that requires extensive research and development, substantial capital investment, advertising strategies aimed at re-educating consumers and uncertain levels of financial return. It may also be characterised by extreme volatility/low predictability – as in the financial futures market.
Example
- This position does not have to exercise any special level of managerial risk-taking.
- Selected: Not applicable
Section 8: Size of organisation
The reference point here must be to the size of the entire group within which the employee operates. If the employee works for a subsidiary employing 500 staff, but their subsidiary is part of a group employing 6,000 staff, the answer to this question should be ’5,000 or more employees’.
In group enterprises, all operations where the group does not hold a controlling interest should be excluded.
Example
- In our example the company is of medium size
- Selected: 251 to 1,000 employees
Section 9: Sector
Where an organisation operates as a conglomerate, the most important sector or the most rapidly growing sector should be selected. Alternatively, select ‘Manufacturing: other’ or ‘Services: other’
Premium professional services cover professional staff working in independent firms such as solicitors, accountants, architectural practices and management consultancy.
Example
- The Supervisor works in a food processing company
- Selected: Manufacturing – food and tobacco
Section 10: Country
Select the appropriate country from those available. If the European country or territory is not listed you will need to upgrade your App to a higher level.
Example
- This jobholder’s factory is in Yorkshire, England.
- Selected: United Kingdom
Output
| 80% | £11.98 per hour | or | £24,918 per year (40-hour week) |
| Midpoint | £14.97 per hour | or | £31,138 per year (40-hour week) |
| 120% | £ 17.96 per hour | or | £37,357 per year (40-hour week) |
We have provided the 80-120% pay ranges because, in practice, 90% of all salaries for particular jobs lie within this range.
Pay periods: To determine the base pay level for a defined period, simply multiply by the job’s actual working hours (i.e.: For a job with a 40-hour week multiply by 40). If the rate is very different from the figure you expected, please check that you have evaluated the job elements correctly and selected the most appropriate economic sector.
To view a full list of terms and conditions click here.