Job evaluation is the process of analyzing and assessing various jobs systematically to ascertain their relative worth in an organization. Job evaluation is an assessment of the relative worth of various jobs on the basis of a consistent set of job and personal factors, such as qualifications and skills required. Show The objective of job evaluation is to determine which jobs should get more pay than others. Several methods such as job ranking, job grading, and factor comparison are employed in job evaluation. Research indicates, however, that each method is nearly as accurate and reliable as the other in ranking and pricing different jobs. Job evaluation forms the basis for wage and salary negotiations.--------businessdictionary.com Background of Job Evaluation Job evaluation developed out of civil service classification practices and some early employer job and pay classification systems. Whether formal job evaluation began with the United States Civil Service Commission in 1871 or with Frederick W. Taylor in 1881, it is now over 120 years old and still of great value. The first point system was developed in the 1920s. Employer associations have contributed greatly to the adoption of certain plans. The spread of unionism has influenced the installation of job evaluation in that employers gave more attention to rationalized wage structures as unionism advanced. During World War II, the National War Labor Board encouraged the expansion of job evaluation as a method of reducing wage inequities. As organizations became larger and larger and more bureaucratized the need for a rational system of paying employees became evident. Wage structures became more complex and needed some way to bring order to the chaos perpetuated by supervisors setting pay rates for their employees on their own. Job evaluation became a major part of the answer. The techniques and processes of job evaluation were developed and perfected during this time period of the late 1950s. With the advent of the Civil Rights movement, job evaluation literally got written into the law. The Equal Pay Act of 1963 required jobs to be compared on the basis of skill, effort, and responsibility to determine if they were or were not equal. A 1979 study of job evaluation, as a potential source of and/or a potential solution to sex discrimination in pay, was made by the National Research Council under a contract from the Equal Employment Opportunity Commission. The study suggested that jobs held predominantly by women and minorities could be undervalued. Such discrimination resulted from the use of different plans for different employee groups, from the compensable factors employed, from the weights assigned to factors, and from the stereotypes associated with jobs. Although the preliminary report failed to take a position on job evaluation, the final report concluded that job evaluation holds some potential for solving problems of discrimination. Definitions of Job Evaluation Below are given some important definitions of job analysis: Job Evaluation involves determination of relative worth of each job for the purpose of establishing wage and salary differentials. Relative worth is determined mainly on the basis of Job Description and Job Specification only. Job Evaluation helps to determine wages and salary grades for all jobs. Employees need to be compensated depending on the grades of jobs they perform. Remuneration must be based on the relative worth of each job. Ignoring this basic principle results in inequitable compensation and attendant ill effects on employees’ morale. A perception of inequity is a sure way of De-motivating an employee.
Jobs are evaluated on the basis of content and placed in order of importance. This establishes Job Hierarchies, which becomes the basis for satisfactory wage differentials among various jobs. Jobs are ranked (not jobholders) Facts [+] A commonly used job evaluation method is the paired comparison evaluation system. The paired comparison system compares each job within a company with every other job within the company. A job's resulting score is determined from the comparisons. The jobs are then ranked by score. THE JOB EVALUATION PROCESS Job analysis describes a job. Job evaluation develops a plan for comparing jobs in terms of those things the organization considers important determinants of job worth. This process involves a number of steps that will be briefly stated here and then discussed more fully. a) Job Analysis. The first step is a study of the jobs in the organization. Through job analysis, information on job content is obtained, together with an appreciation of worker requirements for successful performance of the job. This information is recorded in the precise, consistent language of a job description. b) Compensable Factors. The next step is deciding what the organization "is paying for" -- that is, what factor or factors place one job at a higher level in the job hierarchy than another. These compensable factors are the yardsticks used to determine the relative position of jobs. In a sense, choosing compensable factors is the heart of job evaluation. Not only do these factors place jobs in the organization's job hierarchy, but they also serve to inform job incumbents which contributions are rewarded. What are Compensable factors? 1. Experience level- How much work experience is needed to perform a job or the prior experience of the employee, whether he has worked in similar industry previously or some other. 2. Educational qualifications- what are all the educational qualifications that are required for the job. 3. Working Condition- the working condition of the job in which the employee would be working (overall environmental factors such as location, hazards and any extreme factors). 4. Confidential Data- the extent to which the employee is exposed to the confidential data. 5. Consequences of mistakes and errors- consequences of the mistake or error occurrence by the employees, effects of those errors or mistake. 6. Complexity of duties- the difficulty level of the duties and task, whether too much decision making is involved in job or not and judgement skills are required or not. 7. Responsibility- the extent of the responsibility the employee entitled to. 8. Mental and physical demands- the degree of concentration and the environment accordingly and level and frequency of physical effort. c) Developing the Method. The third step in job evaluation is to select a method of appraising the organization's jobs according to the factor(s) chosen. The method should permit consistent placement of the organization's jobs containing more of the factors higher in the job hierarchy, than those jobs lower in the hierarchy. d) Job Structure. The fourth step is comparing jobs to develop a job structure. This involves choosing and assigning decision makers, job category, level, and setting up the job hierarchy. e) Wage Structure. The final step is pricing the job structure to arrive at a wage structure. It is also known as a salary structure, a system that determines how much an employee is to be paid as a salary or wage, based on one or more compensable factors such as the employee's experience level, rank or level within the organization, the length of time that the employee has stayed in organisation (total service), complexity of duties and the difficulty of the specific work. performed. Features of Job Evaluation The primary objective of job evaluation is to find out the value of work, but this is a value which varies from time to time and from place to place under the influence of certain economic pressure, not least of which is the worth of money itself. The main features of job evaluations are:
The objectives of job evaluation
Advantages of Job evaluation Job evaluation is a process of determining the relative worth of a job. It is a process which is helpful even for framing compensation plans by the personnel manager. Job evaluation as a process is advantageous to a company in many ways:
Limitations:
What is the main purpose of job evaluation?A job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs in an organization. It tries to make a systematic comparison between jobs to assess their relative worth for the purpose of establishing a rational pay structure.
What is job evaluation in reward management?Job evaluation is a systematic process for assessing the relative value of the job in relation to other roles in an organisation.
What are the three main reasons for conducting job evaluations?Why is Job Evaluation Used?. Determining what positions and jobs within an organization are similar. ... . Determining appropriate pay, salary grades, and other compensation issues. ... . Helping in the development of job descriptions and specifications, performance standards, competencies, and a performance appraisal system.. Why is job evaluation an important component of any human resource program?Effectively performed, job evaluation simplifies pay structure decisions and makes them more rational. It makes job comparisons a more efficient operation.
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