Job Evaluation

Job evaluation is an established tool in the hands of personnel management for avoiding inconsistencies in job rates and establishing uniformity in the overall wage structure. It is carried out using a set of procedures. It is a method of measuring the value of one job in comparison to another within an organisation. The relative worth of distinct jobs is determined during job evaluation so that salaries can be paid based in accordance with the worth of the work done.

By analysing the complexity of the work produced and the relevance of the task to the organisation, job evaluation is intended to offer a rational, orderly hierarchy of jobs based on their value to the enterprise. In the company’s job evaluation plan, the variables used to determine a position’s worth are identified, specified, and weighted.

Definition of Job Evaluation

The systematic process of establishing the relative value of different positions in an organisation is known as job evaluation. It is to evaluate positions to create a compensation system that is fair, equal and consistent for all employees.

HR creates job evaluations in collaboration with labour unions, other social partners and commercial consulting firms. The benefit of job evaluation is that it does not consider the job holder’s personal traits. A rating corresponds to relative worth, which corresponds to basic pay bands or grades (called wage grids). Personal characteristics of the job holder (such as seniority, education level, and tenure) are rewarded with higher pay steps within the corresponding pay bracket.

To give real information about the employment under consideration, some basic job analysis is required. The job analysis and subsequent job description are frequently the starting point. The job is assessed based on this. The job’s added value to the organisation is one of the most important variables in the evaluation.

Types of Job Evaluation Methods

Now that you have understood the definition of job evaluation let’s discuss the types of job evaluation methods.

Classification/Grading

Generic job qualities are combined together in this job evaluation approach to reflect their level of competence and responsibility at multiple specified grade levels. This procedure is usually uncomplicated and takes less time than others.

Individual jobs are compared to sets of predetermined job qualities. Based on the comparison, they are assigned a specific grade classification. This can be difficult because one set of traits does not necessarily apply to every role within an organisation. As jobs go to higher levels, this method is prone to grade inflation, which could lead to ineffective evaluations.

Ranking

This method rates jobs according to their perceived worth in comparison to others. Although this strategy does not take into account market compensation rates, it may be appropriate for smaller businesses. Because of the higher number of positions, this strategy may be more complicated in larger firms, but it may still work if occupations are classified, for example, according to professional level.

Point-Factor

This method identifies particular employment aspects that contribute to a position’s value and worth. The factors are divided into various categories, such as responsibility, skill and effort, and a value is assigned to each of them. Individual characteristics that a certain work meets are combined together to achieve a total point value for the project. The disadvantages of this strategy include that the point values may not necessarily represent market job values, and the system also has the potential to create an internal hierarchy.

Factor Comparison

This technique, like the Point-Factor Method, divides job factors into primary groups and assigns a dollar value to each factor rather than a point value. Only a few organisations use this strategy because it is more complicated. It can also be difficult to communicate with staff, and determining dollar values involves a certain amount of subjectivity.

Competitive Market Analysis

External data is used in this job evaluation method to inform decisions regarding a job’s relative value in an organisation. This strategy tries to use posted job descriptions to compare jobs to similar positions in the external marketplace, as job assessments constitute the basis for market pricing. Specific salary data is gathered from published sources, and the market worth of the position is estimated using this information.

Purpose of Job Evaluation

The major goal of job evaluation is to determine the relative merit of different jobs in an organisation so that an equitable wage structure can be developed. According to a report by ILO, the majority of job evaluation systems try to set up the relative values of various tasks on the basis of logical concepts to determine the actual worth of a job. All job assessment systems are founded on the premise of describing and evaluating the worth of all occupations in the company in terms of a variety of parameters, the relative importance of which varies from work to work.

Some of the major objectives of job evaluation are as follows:

1. Establish a system for determining the relative value of each job in an organisation
2. Establish fair salary differentials between different jobs inside the company
3. Reduce salary disparities
4. Ensure that all eligible employees are paid the same for similar work
5. Establish a foundation for determining incentives and bonus plans
6. Serve as a useful resource for resolving particular wage rate grievances
7. Provide information on work organisation, staff selection, placement and training, as well as a variety of other issues

Principles of Job Evaluation

Jobs must be carefully defined so that they are easily recognized and distinguishable. These responsibilities must subsequently be included in the job description:

• Evaluation: A job evaluation scheme must be developed and implemented as a standard, and all jobs in the organisation must be evaluated in accordance with it.
• Job Comprehension: Job evaluators must have a thorough understanding of the job design process. They must be meticulous in their approach to the many tasks at hand.
• Concern: Job evaluations should focus on the job rather than the individual.       
• Professionalism: Assessment must be conducted in a professional and acceptable manner by qualified individuals. Furthermore, it is reliant on judgement and is not scientific, but when applied appropriately, it can be used to create objective decisions.

Conclusion

Organisations utilize job evaluation methods to structure both the technical and social components of work to achieve a healthy match between the job holder and the job itself. Its major purpose is to provide a method for determining a job’s overall worth that is both systematic and equitable, resulting in increased employee satisfaction. By effectively utilizing the potential of all jobs and job holders, the total quality of an employee’s work life is improved, resulting in improved overall employee performance.