A sound wage and salary is one of the prerequisites of good employer employee relations. In order to develop such a structure, it is essential that pay is related with the nature and worth of the job. It is also essential to maintain proper differentials between compensations for various jobs. Pay differentials need to be related with differentials in the value of different jobs. The relative worth of a job can be judged with the help of job evaluation. 15.1 Concept of Job Evaluation
Job evaluation is an orderly and systematic technique of determining the relative worth of various jobs within the organisation so as to develop an equitable wage and salary structure. According to the international labour office (I.L.O.), “job evaluation is an attempt to determine and compare the demands which the normal performance of a particular job makes on normal workers, without taking into account the individual abilities or performance of workers involved.” The British institute of management has defined job evaluation as “the process of analysis and assessment of jobs to ascertain reliably their net worth using the assessment as the basis for a balanced wage structure.” Job evaluation needs to be differentiated from job analysis and performance appraisal. Job analysis is the process of collecting information related to a job in terms of duties, working conditions, supervision, etc. It provides the information for evaluation for a job. Therefore job evaluation is something more than job analysis. Job evaluation begins with job analysis and ends up with the classification of jobs according to their worth. A job cannot be evaluated unless and until it is analysed. Job evaluation also differs from performance appraisal in the process of assessing the worth of a jobholder whereas job evaluation is to determine basic wage rates for different jobs whereas the aim of performance appraisal is to determine incentives, and rewards for the superior performance. 15.2 Objectives of Job Evaluation
The objectives of job evaluation are as follows:
(i) To determine equitable wage differentials between different jobs in the organisation; (ii) To eliminate wage inequities;
(iii) To develop a consistent wage policy;
(iv) To establish a rational basis for incentive and bonus schemes; (v) To provide a framework for periodic review and revision of wage rates; (vi) To provide a basis for wage negotiations with trade unions; (vii) To minimise wage discrimination on the basis of age, sex, caste, region, religion, etc. (viii) To enable management and control the payroll costs.
15.3 Process of Job Evaluation
The process of job evaluation involves the following steps:
1. Gaining Acceptance. First of all the cooperation and support of top management, employees and the trade union should be obtained through communication and participation. For this purpose conference, letters and booklets can be used explaining the aims and benefits of job evaluation. 2. Constituting Job Evaluation Committee. It is very difficult for a single person to evaluate all jobs objectively. Therefore, a committee consisting of experienced and respected representatives of a management and workers and outside experts should be constituted. Participation of employees in job evaluation will reduce their doubts and suspicion about the programme. 3. Selecting Jobs to be Evaluated. Due to constraints of time and money it may not be possible to evaluate each and every job. Therefore, some key jobs may be selected in each department. The key jobs are evaluated in detail and the other jobs are compared with the key jobs. The key jobs should be representative of the type of work performed. 4. Describing the Jobs. A detailed written description of every job is prepared to indicate the duties and responsibilities involved in it. The job description is thoroughly checked to ensure that there are no omissions and duplication in it. The acceptance of the employee performing the job is also obtained to the job description. 5. Selecting the Method of Evaluation. There are several methods available for evaluating jobs. The method most appropriate to the job and the organisation is chosen. If possible more than one method may be chosen to increase the accuracy of evaluation. 6. Weighting Job Factor. A job is compared with other jobs in terms of significant factors which may be as follows: (a) Skills – mental and manual.
(c) Efforts and initiative
(d) Working conditions
(e) Responsibilies to be undertaken
(f) Supervision required
Weights are assigned to each job factor and total weights for a job indicate its relative value. Different jobs are arranged in a sequence in terms of their relative worth to the company. 7. Assigning Money Values. Each job is priced in terms of its worth. In other words, the sequences of jobs in terms of their relative worth is related to a money scale. 8. Periodic Reviews. A periodic review and revision of job descriptions will help to assuage the feelings of employees who believe that their work was not properly evaluated. Moreover, it will enable management to update job description in the light of technological and other changes. For example, automation of a job reduces physical effort, but increases responsibility. 15.4 Advantages of Uses of Job Evaluation.
Job evaluation is the corner-stone of wage and salary administration. Its main uses are as follows: (i) Job evaluation is a logical and objective technique of ranking jobs and thereby removing wages inequities. It is helpful in developing an equitable, rational and consistent wage and salary structure. (ii) It helps to improve industrial relations by reducing employee doubts and grievances arising out of wages. It increases employee satisfaction of wage differ...