DECISION BAND^TM METHOD

SUMMARY AND OVERVIEW

BACKGROUND

The Decision Band ^TM Method (DBM) of job evaluation is a highly effective method of objectively evaluating the worth of a job to an organization. A sound theoretical framework serves as the basis of the method which provides a consistent and valid approach to comparing and contrasting jobs.

Initially developed over thirty years ago by Professor Emeritus Thomas T. Paterson, and further refined by Fox Lawson's compensation consultants, the Decision Band^TM Method has been tested in organizations throughout the world as a means of identifying rational distinctions in pay for all jobs. DBM has been used successfully in both public and private sector organizations. Organizations converting their current job evaluation plans to the DBM framework can be assured that their pay hierarchy will be reliable, valid and justifiable.

The basic premise of DBM is that the value of a job to an organization is based on its level of responsibility. Responsibility is reflected, and therefore measured, by the decision-making requirements of the job. Because all jobs require incumbents to make decisions in order to perform their jobs, decision-making is a logical and equitable basis on which to compare jobs within an organization.

SUMMARY OF METHOD

DBM job evaluation involves three basic steps. First, jobs are classified into one of six different "Decision Bands" based on the characteristics of the decisions that a job requires. This classification process reflects the level of responsibility of the job within the organization. The second step involves classifying the jobs within each "Decision Band" into one of two "Grades" based on the differential supervisory difficulty and effort required of the job. Each of the six bands is subdivided into two grades, (coordinating and non coordinating) or subclasses, depending on the requirements to monitor or supervise subordinate jobs. Exhibit 5 is an overview of the DBM Decision Structure.

At this point in the process, jobs will have been classified into a hierarchy of twelve different classes of jobs, based on the job's level of responsibility and supervisory difficulty and effort.

The third and final step involves further subdivision of jobs within each grade into subgrades by reference to the complexity, difficulty, and skills required of the job in relation to other jobs that have been classified into the same Band and Grade. Frequently, this subgrading is done within each occupational group in order to facilitate the making of relative judgements in comparing the complexity, difficulty, and skills required of jobs across different occupations. The subgrading process shares many characteristics with point-factor methods of job evaluation.

Finally, the jobs are priced within the relevant labor market.

OVERVIEW OF THE DECISION BAND^TM METHOD

The first step in evaluating jobs using DBM involves Banding each decision-making task according to the kind of decision required. All jobs in an organization are composed of a set of tasks. In most organizations, job descriptions are formal documents which describe these tasks. In order to perform all its requirements each task requires the incumbent to make different kinds of decisions some of which may be of a higher level of greater difficulty than others. Each decision-making task is assigned a Band and a job is classified according to the highest level of decision required.

The Decision Bands are defined as follows:

BAND F - POLICY MAKING DECISIONS
These are decisions that determine the scope, the direction, and the overall goals of the whole organization. They are subject to few constraints other than those imposed by law and/or economic conditions, and they take into consideration all the major divisions or departments, the limits of funds available to each, and the scope of their programs. Band F decisions are the kind typically made by a Board, Council, or CEO.

BAND E - PROGRAMMING DECISIONS
Band E decisions deal with the means of achieving the goals established at Band F. These decisions are concerned with formulating or adjusting programs for the major Functions/divisions/departments, and allocating resources (facilities, people, money, materials) among these groups. The executives at Band E are typically in charge of, or responsible for, advising line executives, heading up such major functions as marketing, administration, production, and finance in private sector organizations, and major departments in public sector organizations.

BAND D - INTERPRETIVE DECISIONS
At Band D, the incumbents are required to interpret and carry out the programs or objectives developed at Band E. These decisions specify what is to be done in lower Bands, and how the resources allocated by Band E are to be deployed. if circumstances change, or if there is uncertainty about how resources are to be deployed, a Band D decision is required to establish what is to be done in similar circumstances in the future. Band D decisions are typically made by middle managers in various functions.

BAND C - PROCESS DECISIONS
Decisions in Band C involve determining the means or process of achieving the objectives, standards or guidelines established by Band D decisions. They are subject to the limits imposed by the available technology and resources and to the constraints set by Band D. Selecting the process is a decision that must precede carrying out the operations that make up the process. A process decision specifies what is to be done at Band B. These are typically decisions made by supervisory personnel and/or senior technical specialist positions.

BAND B - OPERATIONAL DECISIONS
These decisions focus on how to carry out the operations of the process specified by a Band C decision. There is, within the limits set by the specific process, a choice as to how and when the operations are carried out, but not as to what operations constitute the process.

BAND A - DEFINED DECISIONS
Band A decisions are confined to the manner and speed of performing the elements of an operation. There is, within the limits set by the prescribed operation, a choice as to how the elements are performed, but not as to what elements constitute the operation.

These Decision Bands form a continuum of responsibility within an organization. Thus, the higher the level of decision-making required, the greater the level of responsibility.

Grading
The next step in the evaluation process is to classify the jobs according to the difficulty and effort involved in the supervisory responsibilities, if any. Jobs which require the incumbent to supervise or monitor other jobs assigned to the same Band (except Band A jobs) are assigned to the higher (coordinating) of the two Grades within the Band to which his job has been assigned. Jobs which do not supervise or monitor other jobs at the same band, but may supervise or monitor jobs at the next lower band are assigned to the lower of the two grades (except Band A jobs). For example, a job which is assigned responsibility at the D7 level is responsible for supervising or monitoring jobs assigned to the D6 level. The D6 job may or may not supervise or monitor jobs at the C5 or lower Bands/Grades in the organization. Within each Band, there are, therefore, two Grades of jobs Coordinating and Non Coordinating.

Subgrading
By this time, if one were evaluating all jobs within an organization, the jobs would be classified or grouped into no more than 12 different groups of jobs. All jobs classified within the same Band and Grade are judged to be of roughly equivalent worth to the organization. However, as a practical matter, 12 Grades are generally viewed as too few to differentiate relative worth adequately.

Jobs are now subgraded (ranked) by Grade. As an example, among two data processing jobs one is more difficult than another and therefore given different subgrades.. By limiting the subgrading step to within grades, the subjectivity of the evaluation process is greatly reduced.

Subgrading involves assessing the relative difficulty, complexity, and skills required of the job in comparison to the other jobs within the same Band and Grade. Since difficulty and complexity are stubborn concepts to apply, the Decision Band ^TM Method provides criteria to assist in determining the relative difficulty between decision making requirements of jobs being evaluated:

• Time pressure
• Need for alertness
• Need for care and precision
• Essential skills and experience

In unusual situations, other compensable criteria such as working conditions may be added, depending on the occupational group and organizational characteristics.

In the standard DBM framework, the lower coordinated grades (AO, Al, B2, C4, D6, E8, FlO) are subdivided into three Subgrades, whereas the upper coordinating Grades (B3, C5, D7, E9, Fl 1) are subdivided into two. In practice, the number of subgrades can be increased or decreased and can vary between the grades. Users should keep in mind that objectivity and reliability of the evaluation will increase with fewer subgrades. See Exhibit 1, (p.5)

To clarify how DBM is applied to a typical organizational unit, an organizational chart of jobs which have already been evaluated, are provided. This organizational chart displays the relationships between jobs and shows the Band, Grade, and Subgrade assignment of each job.

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