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Job Evaluation

CHAPTER 16. Job Evaluation. JOB EVALUATION. Why Job Evaluation? To establish a justifiable ‘ranking order’ of the various jobs in the organization To bring in more equity and improved logic in the pay structures within the organization. JOB EVALUATION.

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Job Evaluation

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  1. CHAPTER 16 Job Evaluation

  2. JOB EVALUATION Why Job Evaluation? • To establish a justifiable ‘ranking order’ of the various jobs in the organization • To bring in more equity and improved logic in the pay structures within the organization

  3. JOB EVALUATION • The above need arises due to creeping changes in job contents due to changes in technology, methods, systems and structures. • The need also arises due to changes in economic, social and cultural factors over the years. The concepts of ‘job difficulty’ and ‘equitable pay’ may have changed over the years.

  4. What is Job Evaluation and what it is not: • It is concerned with job contents or demands of the job and not the ‘value’ of the job to the organization. • Job evaluation rates the job and not the man. • Job evaluation, despite any quantification, is a disciplined judgement about the hierarchical positioning of the jobs.

  5. Basic Systems of Job Evaluation • Comparing a whole job against other jobs • Ranking system • Grading or Classification system • Comparing compensable elements of the jobs • Points system • Factor Comparison system

  6. Ranking Method • Based on job descriptions, decide on three jobs: Highest, lowest and some middle rank. • Pick any job next and place appropriately between the above three jobs. • Continue till all jobs are placed • Review the rankings; iron out any discrepancies. • Place the jobs in grades based on rankings

  7. Grading System • Decide on the number of grades • Decide on key descriptions for each grade • Place jobs in grades based on grade descriptions and job descriptions. Match them.

  8. Points System • Select comparable compensable elements or ‘factors’. • Define weightage points for each factor • Within these weightage points have a calibrated scale for different ‘degrees’. • Check each job against a factor to determine the required degree. Note down the points.

  9. Points System • For each job, add points, corresponding to all factors. Note down the ‘total points’. • The span of ‘total points’, for the entire set of jobs, is divided into suitable ‘ranges’ of point values. Each range now represents a grade. • Review and sort out discrepancies.

  10. Wage administration & Points system • Wage rates (internal) are plotted on the y-axis and the total points on the x-axis. Do this for all jobs. • Pass a best fitting curve/line through this plot. • Decide on wage scales: • Number of scales • Overlapping/non-overlapping • Span of scales • Also plot market wage rates for the jobs. • Decide on what span of points should correspond to which scale. Try to cover maximum number of jobs.

  11. Wage Curve and derived Proposed Wage Ranges

  12. Factor Comparison System • Factors are selected as in Points system. But, there are no degrees. • Benchmark (or key) jobs are selected and ranked under each factor. Have 10-15 key jobs. • Average wage rate of each key job is converted into points. • The points so obtained are apportioned to the factors. This is done for all key jobs.

  13. Factor Comparison System (contd.) • New ranks obtained, due to above apportioning, are compared with old ranks. Where the ranks differ, the corresponding job is removed from the key jobs’ list. • Repeat this process until the old and new ranks do not differ. • Using the key jobs positioned under each factor, compare and place other jobs. • The total points for any job can be now be obtained by adding points for the job under all factors. • Convert the points to a pay-rate.

  14. Apprehensions of the employees’ unions • Job evaluation exercise treads on unions’ prerogative of negotiating and collective bargaining. • Job evaluation does not do justice to an employee’s seniority, loyalty and ability. • Management may conveniently focus on those jobs that suit their objectives. Job evaluation may serve as a tool used by management to beat up the employees and unions.

  15. Inherent limitations of Job Evaluation • With changing technology, job difficulties and other characteristics change, necessitating a renewed job evaluation exercise. • Job evaluation cannot level out the irrationalities in the job vs. pay or position, because of irrationalities in the environment external to the organization. • Job evaluation involves much judgement and subjectivity. • Job evaluation exercise generally entails increased financial burden to the organisation.

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