Job evaluation can be defined as a systematic process designed to determine the relative value of work within a single work organisation. It is the process by which an organisation systematically establishes its compensation programme. Jobs are compared in this process in order to achieve the appropriate value of each job. Job evaluation is related to the analysis of the job. Job analysis is the process of describing the duties of the job, the relationship of authority, the skills required, the conditions of work and additional relevant information. Work analysis or Job analysis involves the creation of job descriptions and specifications. In the first place, an analysis is made of the work in the organisation, with particular attention paid to the tasks and skills involved in performing them. Read on to know more about the importance of job evaluation.
This list of the specific duties of a particular job is referred to as a job description. Next, the staff manager lists the qualifications for each of these duties — the education, skills and experience required of the person filling the position. This list of qualifications is referred to as the job specification. A job description and job specification often appear together in a single form and are commonly referred to as a job description. Job evaluation means the use of information in the job analysis to systematically determine the value of each job in relation to all jobs within the organisation. In brief, work appraisal attempts to rate all of the workers in the company and position them in a hierarchy that represents the relative importance of each of them.
Let us have a look at the steps involved in job evaluation and then move on to know the importance of job evaluation.
Steps in Job Evaluation
The work evaluation process follows the following four steps: obtaining data; choosing countervailable factors; assessing a job; and assigning compensation to a job. Have a look at it below.
1. Gathering job analysis data
In the first place, information must be collected through a method of job analysis. Here, validity should be a guiding principle, which simply means that the job analyst must capture all the content precisely. It is very important to understand the similarities and differences between jobs. Ambiguous, incomplete or incorrect job descriptions may lead to incorrect evaluation of some jobs.
2. Selecting compensable factors
Compensable factors are the factors that the organisation chooses to reward through differential pay. The most frequently paid considerations are expertise, experience, obligation and working conditions.
3. Evaluating job using certain methods
There are four basic types of job assessment
4. Assigning pay to the job
The final result of a work appraisal exercise is a hierarchy of workers in terms of their relative importance to the enterprise. Assigning pay to this hierarchy of workers is referred to as the pricing of the pay system. This practise involves a policy judgement about how the wage scale of the company compare to their rivals.
Importance of Job Evaluation
1. Job evaluation helps to rate the job
It is a methodology that helps to determine the difficulty and value of the task. It is rated by the job but by the job holder. This helps to determine and fix wages accordingly.
2. Promotes transparency around pay decisions
Job evaluation minimises subjectivity and makes it possible to make fair, clear and straightforward judgments about tasks. Work knowledge and evidence are all analysed in the same manner within the conditions set. The decision-making is oriented, the framework is structured to be rational and the approach is clear. Transparency is accomplished when staff and administrators know and appreciate how decisions are taken.
3. Ensures pay levels are externally competitive
Employment assessment will ensure that the amount of compensation in the company for each job is externally competitive. Although comparing job names, short descriptions, job capsules and job specifications can be used in benchmarking positions, the structure offered by job assessment ratings is the most reliable way to align internal employment with external industry data sources and to ensure that the like is correlated with the like.
4. Supports equal pay
Equal pay clauses of the Equal Pay Act 2010 guarantee that men and women in equal jobs earn equal wages. Job assessment offers evidence to support a fair pay audit and ensure that equal pay is reviewed across:
- Like job – where particular activities require similar skills. Job names are the most common predictor of jobs like that.
- Job graded as equal – where jobs have identical work evaluation ratings and are of the same level. In order to allow this determination, a fair work appraisal scheme is required.
- Job of equal value – work that is not the same or similar may be of equal value in terms of commitment, ability and decision-making. Works that may be completely different in terms of content may be deemed to be work of equivalent merit by considering the demands placed on workers who do so.
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5. Supports recruitment, career development and succession planning
Developing paths for each position are specifically defined in the family career system. This are typically described by family/level profiles that identify the expertise, abilities, experience and competencies required for each family/level.
6. Brings harmonious relation between labor and management
It brings peace and healthy labour relations through the reduction of pay disparities within the company.
7. Helps to differ job other than skills
It recognises risks and other aspects of employment rather than expertise in order to assess the importance of employment. Jobs are also no longer distinguished from abilities.
8. Determines cost and rate of production
It establishes an optimal pay structure dependent on the workload and thus increases the productivity of workers, thus raising the rate of output.
9. Helps to minimize cost
By – efficiency and increasing the rate of production, the cost of output per unit is decreased or reduced.
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