Job evaluation

Job Evaluation is a method to rank jobs by keeping in mind the duties and responsibilities given to the job in an organization. Job is evaluated on the basis of contents and it is placed in the order of their position and significance. It should be noted that in job evaluation, the jobs are ranked not the job holders. The job holders are rated through performance appraisal. It is different from the job analysis as job analysis is a systematic method of gathering information about a job but it needs some job analysis so that factual information about the jobs concerned is provided. In simpler words job evaluation is a process of finding out relative value of a job as compared to other jobs. For nearly 75 years, job evaluation plans are being used in the public and private sectors. There are different ways in order to design a job evaluation plan. Yet, the same approach is followed, which is to value each job in a defined group of jobs grounded on a common set of generic factors.

Job evaluation process

This process starts with describing objectives of evaluation and finishes with establishing wage and salary differences, which is the main objective of job evaluation. The steps which are needed to be taken in this process are explained below: Gaining acceptance First of all before the process is started, the top management should explain the uses and the aim of the program to the unions and the employees. Further explanation in the form of oral representations, letters, or can be used. Staffing A committee consisting of heads of different departments acting as representatives of employees should be made. HR specialists will be the chairmen of this committee. The overall responsibility for the program should be awarded to a senior executive. Training for the Committee In order to make this program successful, members of the job evaluation committee should be appropriately trained in its procedure. Selecting the method Keeping the job factors and the organizational demands in mind, the most suitable method of evaluating the jobs should be adapted. The ranking method, classification method, factor comparison method, and point method are among the different methods that can be used.

Time Factor Job evaluation should not be carried out in hurriedness so that appeals against the grading of jobs can be minimized. Isolating criteria for evaluation The heart of job evaluation is to determine the criteria for evaluation. Responsibility, skill, effort and working conditions are used as major criteria in most of the cases. It is clear that job evaluation criteria vary across jobs.

The main factors determining pay

Demand and supply Wage rates of workers depends upon demand and supply force in labour market. If the labor is in short supply, the workers will offer the services only if they are paid well. On the other hand, if the supply is more than workers available might get ready work at cheaper rates. Bargaining Power Where labor unions are strong enough to force the hand of employers, the wages will be determined at a higher level in comparison to other units where unions are weak. Cost of living Wages of workers also depends upon the cost of living of the worker so as to ensure him a decent living wage. Cost of living varies under deflationary and inflationary pressures. Where labour unions are strong and employer do not show enough awareness, here wage are adjusted according to cost of living index numbers. Condition of product market Degree of competitions prevailing in the market for the product of the industry will also influence the wage level. For e.g. if there is perfect competition in the market the wage level may be at par with the value of net additions made by the workers to the total output, but may not reach this level in case of imperfect competition in the market. Comparative Wages Wages paid by the other firms for the same work also influence the wage levels. Wage rates must also be in consistent with the wages paid by the other firms in the same industry so as to increases the job satisfaction among the workers. Ability to Pay Wage rates are influenced by the paying ability of industry or firms to its workers. Those firms which are earning huge profits may afford to pay high wages and can provide more facilities to

its workers in comparison to the firms earning comparatively low profits. Productivity of labour Higher productivity will automatically fetch more profit to the firm, where in turn workers will be paid high wages in comparison to other firms with low productivity. Job Requirements If a job requires higher skill, greater responsibility and risk, the worker placed on that job will naturally get higher wages in comparison to other jobs which do not require the same degree of skill, responsibility or risk. Govt. Policy Since the bargaining power of the workers is not enough to ensure fair wages in all industries, the Govt. has to interfere in regulating wage rate to guarantee minimum wage rates in order to cover the essentials of a decent living. Goodwill of the company A few employers want to establish themselves as good employer in the society and fix higher wages for their workers. It attracts qualified employees. In addition there are other important factors which affect the individual differences in wage rates. These are: 1). Workers Capacity and Age 2). Educational qualification. 3). Work experience. 4). Promotion possibilities. 5). Stability of employment 6). Demand for product. 7). Profits earned by the organisation. 8). Hazards involved in work etc. Gender Difference Although great strides have been made in assuring "equal pay for equal work," on the whole, women continue to receive lower pay than men. As a group, women also tend to hold lower paying, lower status jobs, and experience a number of additional inequities in the area of compensation. There is a basis in law and in court decisions for rectifying pay inequities when they are due to intentional discrimination on the basis of gender. However, it is often difficult to determine if wage discrimination is intentional. For instance, women may earn less because of fewer years of sustained work experience or a lower level of education. If you believe that you have been discriminated against by an employer, labor union, or employment agency because of race, color, sex, religion, national origin, age, or disability, a

discrimination complaint may be filed with the Equal Employment Opportunities Commission (EEOC). Complaints may be filed in person, by mail, or by telephone by contacting the nearest EEOC office. Be aware that charges must be filed within strict time frames. Employee Tenure and Performance Traditionally, an employee's pay increases with years of service. A widely held view is that, through experience, employees become more effective problem solvers and are more dependable. However, as the global economy increasingly demands ongoing business change and higher levels of productivity, employers have looked at how pay and reward systems can improve an organization's performance. For many employers, the goal now is to integrate the organization's compensation and reward philosophy with its strategic initiatives regarding customers, profitability, and the development of a strong, competitive work force focused on the success of the organization. As a result, employers are using more sophisticated performance evaluation systems (e. g., 360-degree feedback that includes input from one's supervisor, colleagues, and direct reports) in an attempt to identify and recognize their top performers. It is not unusual to see a range of a +/-10% percent salary differential for individuals in the same job depending on their performance. Geographic Location Levels of employment/unemployment do not affect all regions of the nation equally. Certain areas where the cost of living is high have historically paid higher wages. For example, if you earned a salary of $40,000 in Texarkana, you would have to earn $87,885 in Honolulu to maintain the same standard of living-that represents a 120% difference in pay! The Places Rated Almanac ranks metropolitan areas from the least to the most expensive in terms of cost of living. There are a number of Web sites that allow you to compare the cost of living in various areas. If you are considering relocating, visit the salary calculator. It will help you compare the cost of living in hundreds of U.S. and international cities; and Best Places To Live will help you make head-to-head comparisons of your real earning power in any two cities.