What is Job Evaluation?
Job Evaluation refers to the process of determining the comparative worth of each job in the firm. This process aims to assess the value of each job against another job to set right the pay scale of each job. It offers important insights for grading jobs in the firm systematically and acceptably. It helps the firm ascertain the pay grades for various categories of jobs.
In finer terms, it is the rating of jobs and not the job holder in an organisation. Job evaluation compares a particular job in the organisation with that of another depending on factors like skills, efforts, responsibility and working conditions. Moreover, it comes up with the basis for developing a job hierarchy and establishing the pay structure.
Further, it is worth noting that job evaluation is about relationships and not absolutes. Hence, job evaluation is not the only factor that decides the pay structures. Factors that are external to the firm, like labour market conditions, collective bargaining and individual differences, also influence the wage level.
In a nutshell, job evaluation assesses the efforts needed to perform the job. The basis for evaluating jobs includes the duties, responsibilities, work pressures and contribution of each job in achieving the organisational goals.
There are two ways to carry out job evaluation. These are:
- Analytical Job evaluation: The degree of the presence of specific factors in a job determines its value in the organisation.
- Non-analytical Job evaluation: Measurement and comparison of jobs with other jobs to ascertain their rating within the firm.
Table of Contents
Characteristics of Job Evaluation
- It is related to the ascertainment of the value of the job within the organisation.
- It follows a non-personnel approach because it does not consider the job holders’ skills and abilities when evaluating the job.
- Duties, responsibilities and accountability are the factors that form the basis for determining the job’s worth in relation to other jobs in the organisation.
- At the time of job evaluation, each job is allocated to a grade or level based on their performance during the process.
- Job Evaluation is performed to ascertain a just and fair pay scale for the job.
Process of Job Evaluation
- Preliminary Stage: It involves arranging all resources for the job evaluation programme. In this stage, the necessary information is gathered about the present setting, and decisions are made on the requirement for a new programme or revising the existing one.
- Planning Stage: At this stage preparation of the evaluation programme takes place. Further, all the incumbents who are likely to be affected are informed. Making proper arrangements for this purpose to set up combined working parties. Also, the jobs to be evaluated are selected.
- Analysis Stage: Necessary information concerning a sample of jobs is gathered. The data plays an important role in the internal and external evaluation of jobs.
- Internal Evaluation: Ranking of a sample of benchmark jobs takes place at this stage through the selected evaluation scheme. After that grading of jobs depends upon data concerning market rate data.
- External Evaluation Stage: At this stage, the collection of information on market rates for the concerned job.
- Design Stage: After the determination of grades for the jobs, the designing of the salary structure takes place.
- Grading Stage: Different jobs are classified as per the salary structure designed at the previous stage.
- Developing and maintaining Stage: It is the last stage of the job evaluation programme. It involves the designing of procedures for maintaining the salary structure so as to cope with inflationary pressures.
- Ranking jobs in the sequence of their importance based on job duties, responsibilities and other factors.
- Come up with standard procedures to ascertain the relative worth of each job.
- Remove inequalities in the wage system.
- Decide a basis for fixing incentives and different bonus plans.
- Ensure that there is a similar wage payment to all competent employees for similar work.
- Determining job and pay grades to help in simple and systematic wage and salary administration.
- Establish a system of fixing the pay scale to ensure consistency and uniformity.
- Ascertain the pay scale of the workers in a rational manner depending upon the relative worth of the jobs.
- Work on employees’ grievances against bias and prejudices in ascertaining the pay scales of the employees.
- Improving the ability of the firm to attract and retain the best employees.
Uses of Job Evaluation
- Job evaluation is a rational and objective method to rank jobs and remove wage inequities. Thus, it assists in creating a just and equitable wage and salary structure.
- Improves industrial relations by reducing employees’ grievances and doubts regarding wage differentials.
- It helps to create new jobs at suitable places in the current wage structure.
- Offers a right and logical basis for wage negotiation and collective bargaining.
- Adds simplicity to the wage administration. This is possible by making wages more uniform.
- Redesigns jobs by designating the easy and difficult tasks equally among various jobs.
- Determines those jobs which need skilled workers to reallocate the work to others rather than the ones who are currently carrying out the work or job.
Above all, Job Evaluation is the relative worth of the job in the firm in order to show the relationship between the jobs in terms of pay.
Further, it seeks to measure the input required on the part of the job holder, i.e. skills, efforts, and responsibility, to perform the job effectively and convert these measures into terms of money.
Also, it is a tool that drives forward changes in the organisation’s reward structure.