Job Evaluation:

A sound wage & salary structure 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 compensation for various jobs.

Job evaluation is an orderly and systematic technique of determining the relative worth of the various jobs within the organization so as to develop an equitable wage & salary structure.

The British institute of management has defined job evaluation as the process of analysis & assessment of jobs to ascertain reliably their relative worth using the assessment as the basis for a balanced wage structure.

Job evaluation needs to be differentiated from job analysis. S analysis is the process of collecting information relating to a job in terms of duties, working conditions, supervision etc. it provides the information for evaluating a job; Job evaluation is something more than job analysis. Job evaluation begins with the job analysis & ends up with the classification of job according to their worth.

Merit rating is done basically for reward, award & other incentives measures.

Purpose of Job Evaluation:

1.To determine equitable wage differentials between different jobs in the organization.

2.To eliminate wage inequalities.

3.To develop a consistent wage policy.

4.To establish rational basis for incentives & bonus Schemes.

5.To provide a framework for periodic reviews & revision of wage rates.

6.To provide a basis for wage negotiations with trade unions.

7.To minimise wage discriminations on the basis of age, sex, caste, region, religion etc.

8.To enable management to control the payroll costs.

Methods of Job Evaluation:

Various methods of job evaluation may be grouped as under.

1.Non-quantitative method.

a)Ranking method:-

In this method, each job as a whole is compared with other jobs. After comparison, all jobs are arranged from the highest to the lowest in order of their importance as judged by duties, responsibilities, and demands on the job holder 3 techniques can be used for ranking jobs. These techniques are as follows.

i] Job description. In this technique, a written jobs description is prepared for every job. The job descriptions are then studied & analysed. The differences between them in terms of duties, responsibilities, skill requirement etc are noted down. Each job is assigned a rank depending upon its relative significance. Several raters may independently rank each job. The average of these ratings is calculated to determine the final rankings. The following illustrates the procedures

JobRater xR.YR ZAverage

A

B

C

D

In this method, the rater is required to keep in mind all the jobs being ranked.

ii)Paired comparison: In this technique, each Job is paired with every other job in the series. The more difficult job in each pair is identified. Rank is then assigned on the basis of the no. of times a job is rated more difficult eg. The pairs & ratings in an organization may be as follows.

Pair

More difficult job Rank

Assistant-Upper division clerkAssistant1

Upper division clerk-Lower division ClerkU.D clerk2

Lower division Clerk-PeonLD clerk3

Assistant-Lower division clerkAssistant

Assistant-Peon

Assistant

Upper division Clerk-Peon

UD Clerk

Peon

4

b) Job Classification or Grading Method:

In this method, the procedure is as follows:

i) Job classes or grades are established. A job grade is a group of different job of similar difficulty or requiring similar knowledge & skills to perform

ii) Each job grade is defined in the form of a written description.

iii) Each job is classified into an appropriate grade depending on how well its characteristics match the grade definitions. For this job descriptions are carefully analysed. In this way, a series of job grades is developed & a different wage rate is fixed for each job grade.

GradeDescription

Unskilled:jobs in this grade involve manual work little mental ability is required No. formal education is essential

Skilled:Jobs in this grade are clerical in nature. Little physical effort is involved as desk work is performed. High school certificate is essential.

Supervisory:Require ability to apply established procedure & to guide others. Graduate degree is essential.

Executives:Involves decision making & administrative work. Professional qualification is necessary

Policy:involves policy making & control. Considerable work experience at policy maker level is required.

2. Quantitative Methods:

a) Factor Comparison Method

Under this method, a few key jobs are selected & compared in terms of common factors. In this methods 1st of all the factors common to all jobs are selected & defined clearly. Skill, physical & mental effort, responsibility & working condition are the main factors used job description r carefully analysed & the key jobs r rated in terms of the selected factors. After that a fair & equitable wage rate is determined for each key job in this similar way the wage rate for a job is allocated among the identified & ranked factor. The remaining jobs are compared with the key jobs in terms of each factor & wage rate is fixed similarly.

In this method key jobs serve as standards against which other jobs can be compared a key job is one having standardized content & accepted pay role.

Sector/ job Wage rateSkillPhysical effortMental requirement Mental requirementworking conditions

Toolmakers

Welder

Machinist

Painter

Laborer

b. Point Method: It is the most widely used method of job evaluation. Under it, jobs are divided into component factors. Points or weights r assigned to each factors depending on the degree of its importance in a particular job. the total points for a job indicate its relative worth or value.

In this method 1st of all representative jobs are to be selected and analysed to find out the common factors. The selected factor may be divided into sub-factor as.

Skill- education, experience, training, judgement

Efforts- mental & physical

Responsibility- quality of output, safety of owns & others.

After defining factor & sub-factor, the points are allocated as per their importance to the particular job. Once the worth of the job in terms of total points is known these are connected to money value keeping in view the prevailing wage rates. A standard unit of money may be assigned to each point so as to convert point scores into monetary values.

Eg.

Point rangeDaily wage rate

101-200 Rs 50-65

201-300 55-75

301-400 75-100

401-600 100-150

601-1000 200-250