Reference no: EM132687036

The Case

Job Evaluation Redesign at Bayer Group

Industry: Chemicals

Bayer Corporation is a subsidiary of Bayer Group AG, a Germany-based global chemical company. Several years ago, Bayer Corporation was created by combining three different operating companies, each with its own markets, products, and cultures-Mobay Chemicals, Miles, Inc., and Agfa. Bayer executives recognized that compensation systems were a critical component of creating a corporate culture that embodies the values and visions developed during the strategic planning for the new firm. Once the merger of the three entities had occurred, a new organizational structure was implemented. This structure had fewer layers and levels, and was developed to give Bayer employees the flexibility to move across organizational units and internationally. Bayer, like many organizations today, compensated people for doing specific jobs. But they wanted to reward people for their flexibility in playing different roles in the organization and moving between jobs. At the same time, Bayer executives wanted a simple compensation system that was tied to the core values and culture that Bayer hoped would evolve.

Bayer began its transition to a different compensation system by establishing a task force of 14 executives chaired by Bayer's Vice-President of Benefits. This Job Advisory Committee, as it was labeled, was to recommend the processes needed to move to a job evaluation system more aligned with the new organization. Job evaluation, the systematic process of determining the internal value of jobs in relation to other jobs, had previously been done in two of the companies using a traditional point factor system; however the third entity had not used a formal job evaluation system. The committee began by identifying the advantages and disadvantages of the existing point system. The committee identified many features of the old system that were working well, particularly the involvement of managers and employees in the job evaluation "pointing" process. But the committee felt that the existing point factors and dimensions were too task based, and they did not reflect the flexibility desired as part of the organizational culture. Also, greater recognition of employees' capabilities, not just their jobs and budgetary responsibilities, needed to be considered. Assisted by a major consulting firm over a period of time and a number of meetings, the committee decided to redesign the job evaluation system and focus on work-value competencies.

The new work-value clusters defined were:
•Improvement opportunity
•Contribution
•Capability
•Expertise and complexity
•Leadership and integration
•Relationship-building skills

For these six clusters, the committee identified scales and point values. The process of developing the new factors and points took about a year. Once the new system had been tested by pointing jobs on both the old and new systems, fine-tuning was needed. Ultimately, a cross section of benchmark jobs was pointed using the new system and the results calibrated statistically to the old system, rather than having all jobs in the organization repointed again.

The ultimate test of the new job evaluation system has been its acceptance and use throughout Bayer. Based on feedback from managers and employees alike, the new system is working well. Bayer's job evaluation system has become the means of aligning its compensation system with the business values of the new corporate culture being created. The compensation plan also supports business strategies and rewards employees as Bayer grows and meets its strategic objectives. Greater recognition of employees' capabilities, not just their jobs and budgetary responsibilities, needed to be considered.

Case Study Questions

Outline the key accomplishments of the task force in redesigning the job evaluation system and comment on their future effectiveness.

"Rewards can be both intrinsic and extrinsic." Does the compensation plan at Bayer support this statement? Explain your answer using empirical evidence?

From the case and your research, describe the strategic planning at Bayer Group.

Attachment:- Job Evaluation Redesign at Bayer Group.rar