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Job Evaluation
Components of Remuneration
Base compensation Incentives Fringe benefits Perquisites Non Monetary incentives
Challenging work environment Growth prospects Flexitime etc
Determination of wages –The sequence
Job Analysis
Job Descriptions &Specifications
Performance Standards
Job Evaluation
Wage Surveys
Wage Structure
Administration
Of Wage Structure
Performance Standard
WagePayments
MinimumWageLaws
Job Analysis
It is the process of collecting job related information.Such information helps in the preparation of job description and Job specification
JOB ANALYSIS
Job Description Job Specification
Job Analysis
A statement containing items like Job title Location Job summary Duties Machines ,tools ,Equipment Materials & forms used Supervision given or received Working conditions
Job Specification A statement of human qualifications
necessary to do the job . Education Experience training Initiative Physical effort Responsibilities Communication Skills Emotional characteristics
Use of a Job Analysis Human resource planning Recruitment and selection Training and development Job evaluation Remuneration Performance appraisal Personnel information Safety and health
Job Evaluation
It is the process of analysing and assessing the various jobs systematically to ascertain their relative worth in an organization It is the jobs that are being rated not the job
holders It is to establish the salary differentials
Methods of Job Evaluation
Job Evaluation
Analytical Methods
• Point Ranking Method
• Factor Comparison
Method
Non AnalyticalMethods
• Ranking Method
•Job Grading Method
Methods of Job Evaluation
Ranking method Simplest one and the most inexpensive Evaluation committee assess the worth of
each job on the basis of the title or its contents
Job not broken down into factors or elements
Job grading method
In the job grading method, each job is assigned a grade according to it's match with a standard description.
Each job description is compared with the standard "grading" description.
JOB GRADING EXAMPLE
GRADE STANDARD DESCRIPTION
1Work is simple and highly repetitive; with close supervision, requiring minimal training and little responsibility or initiative
2
Simple and repetitive work done under close supervision and requiring some training or skill. Employee is expected to assume responsibility or exhibit initiative only rarely
3
Work is simple, with little variation; done under general supervision. Training or skill required. Employee has minimum responsibilities and must take some initiative to perform satisfactorily
4
Work is moderately complex, with some variation; done under general supervision. High level of skill required. Employee is responsible for equipment or safety; regularly exhibits initiative
5
Work is complex, varied, done under general supervision. Advanced skill level required. Employee is responsible for equipment and safety; shows high degree of initiative
Job Evaluation:The Point Method
List the types of jobs to be evaluated Determine the list of compensable factors like
skill.efforts etc Determine the number of degrees to be allocated to
each factor and prepare a suitable definition for each
Assign points to each degree of each factor Select a certain number of jobs ,say 10 –15 and
evaluate each in terms of the scale so constructed Design the wage structure
Job Evaluation:The Point Method
Example: Software Engineer Job Description
The Software Engineer designs, develops, tests and maintains one or more of our products or internal applications. The software engineer works as a member of an engineering team developing, designing, and maintaining one or more of our products or internal applications. This position reports to the appropriate Project Manager.
Job Specification Bachelor's or undergraduate degree in Computer Science,
Information Systems, Electrical Engineering or equivalent experience. Masters or graduate degree is desirable. Understand Intranet and Internet technologies: http, firewall.
Job Evaluation:The Point Method
Develop a list of compensable factors… A set of standards the organization uses to
distinguish among jobs for pay purposes Examples of commonly used compensable factors:
Degree of responsibility, supervision Knowledge needed to perform the job Discretion in performing the job, independent judgment Job conditions Effort Hazard Consequence of error
Job Evaluation:The Point Method
Factors - Degrees 1st 2nd 3rd 4th 5th 6th
Job Knowledge 25 100 175 250Judgment & Decision Making 10 33 55 78 100Independent judgment 25 100 175 250Accountability 20 65 110 155 200Working conditions 5 20 35 50Mental 15 42 69 96 123 150
Job Evaluation:The Factor comparison Method
This method determines the relative rank of the job to be evaluated in relation to the monetary scale
Commonly used for white collar jobs ,executive cadre etc
It is a combination of ranking and point system
Job Evaluation:The Factor comparison Method
Steps Select the factors and define them clearly
Mental requirements Physical requirements Skills set Working conditions
Select a bench mark job ( job that is satisfactory enough ) which will serve as standard for other jobs
Job Evaluation:The Factor comparison Method
Allocate wage for each key job to different factors
Develop a job comparison scale and insert key jobs in them
Evaluate the job in question factor by factor in relation to the bench mark job on a job comparison scale
Design ,adjust and operate the wage structure
Matrix for factor comparison
JobHourly Rate
Pay for Skill
Pay for Effort
Pay for Responsibility
Pay for Working Conditions
Secretary Rs 90 4.5 2 2 0.5Admin Assistant Rs 110 5.5 2.5 2.5 0.5
Supervisor Rs 150 6 3.5 4 1.5
Manager Rs 210 9 3.5 7 1.5
PERFORMANCE LINKED PAY
WAGE PAYMENT
Two methods of wage payment Time wage system
Worker is paid for the amount of time spent in the factory Non variable method Wages = Number of hours worked * Rate per hour
Piece wage system Worker is paid on the basis on the output of the work . He is
paid according to the amount of work completed or thenumber of units turned out irrespective of the time spent
Wages = Number of units produced * rate per unit
When to use time wage system ?
Difficult to fix the standard time Quality of work is of utmost importance Job relates to office or clerical job Collective effort of a group of person is
required Where mental work is involved Where production process is complicated
and needs higher order skills
When to use piece wage system ?
When methods of production are standardized and repetitive in nature
Productivity of the worker s increased Job involves more physical work than
mental work Work does not require personal skills of
higher order Where output can be measured
Incentives
Incentives are the variable component of pay where the pay is tied with some measure of individual ,group or organisational performance
Incentive plans provide offer an attraction of extra payment for efficiency or more production
Advantages of incentive plans
Focus employee efforts on specific performance targets
Incentive compensation is directly related to operating performance
It fosters team work and unit cohesiveness when payments to individuals are based on team results
It is a means to reward or attract top performers
Requirements for a successful incentive plan
Incentive programs should be linked to valued behaviour
It should be fair enough Productivity or quality standards should be
challenging but achievable Payout formulas should be simple and
understandable
Types of incentive plans
Individual Group Enterprise
Time based Plans Team compensation Profit sharingProductivity based plans Rucker plan Stock options
Bonuses Improshare Employee stock ownership Plans
Merit pay
Lumpsum merit pay
Incentive awards
Sales incentives Incentives for professional employees Executive compensation
Time based plans
Halsey premium plan Rowan plan Emerson plan Bedeaux plan
Time based plans
Halsey premium plan It is a combination of speed and time bases of
payment For eg ;
Standard time (S) = 12 Hrs Time taken by a worker (T) = 8 Hrs Rate of wages (R) = Rs 9 /Hr Bonus (P) = Wages for the 50 % of the time saved Total wages = TX R +50% Of (S-T) * R Total wages = 8 * 9 + 50/100 * 4 *9 =90
The percentage is fixed by the employer
Time based plans
Rowan plan Is a modification of the Halsey plan Bonus is paid on the basis of the time saved For eg ;
Standard time (S) = 12 Hrs Time taken by a worker (T) = 8 Hrs Rate of wages (R) = Rs 9 /Hr Total wages = T*R +(T*R *(Time saved /Std Time )) Total wages = 8 *9 +(8*9 *(4/12)) =96
Bonus will be paid at a diminishing rate if they save more than 50% of the time
Time based plans Emerson plan
Guaranteed wage payment to all the workers on time rate basis In addition bonus or extra payment is suggested For Eg ; CASE 1
standard output = 80 units Actual performance = 60 units Efficiency = 75 % (Bonus =20 %)
CASE 2 standard output = 80 units Actual performance = 90 units Efficiency = 112.5 % (Bonus = 30%)
Bonus will be paid to workers whose efficiency is more than 66.67 % . The rate of the bonus will increase with efficiency
Time based plans Bedeaux plan
Standard time for a job is determined Each minute of the allowed time is called a point or B Bonus paid is 75% of the wages for time saved and the
remaining 25% to the supervisor Calculation
Standard Bs = 10*60 =600 Actual Bs =8*60 = 480 Rate per hour = Rs 1 Bs Saved = 120 Bonus = 75 % of Time saved +S * R Bonus = (75/100) * (120/60) *1 +8 = 9.50
References
Human Resource Management ;Snell & Bohlander ,India Edition
Human Resource Management Concepts and Cases ;T N Chabbra
Human Resource Management: Text and Cases,K Aswathappa.