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Job Evaluation: Need, Benefits and Limitations

After reading this article you will learn about:- 1. Meaning and Definitions of Job Evaluation 2. Need for Job Evaluation 3. Objectives 4. Principles 5. Benefits 6. Essentials 7. Limitations.

Meaning and Definitions of Job Evaluation:

Job evaluation is an orderly and systematic process of determining the wages worth for the job in relation to other jobs. It is a process of rewarding the job after it has been analysed. Each job should be paid according to its real value i.e. a high value job should receive higher wages and low value job should receive lower wages.

If it is reverse, the workers would feel dissatisfied resulting into unhealthy industrial relations. Once the worth of the job is determined, it becomes easier to determine and fix the wage structure that will be fair, equitable and remunerative.  

ILO defines job evaluation as “an attempt to determine and compare demand which the normal performance of a particular job makes on normal workers without taking into account the individual abilities of performance of the workers concerned.” It is the determination of normal requirements from workers for performing a particular job. Different jobs have different worker requirements for undertaking them.

Kimball and Kimball, “an effort to determine the relative value of every job in a plant to determine what the fair basic wage for such a job should be.” According to this definition job evaluation is method of determining wage structure of different jobs. It helps in fixing the remuneration to be paid for undertaking a particular job.

Date Yoder, “Job Evaluation is a practice which seeks to provide a degree objectivity in measuring the organization value of jobs within organization and among similar organizations. It is essentially a job rating process, not like the ratings of employees.”

According to Yoder, job evaluation is a technique of finding out the comparative worth of various jobs not only is the organization but also among jobs in different organizations. It helps in fixing fair and comparative wage structures.

According to the British Instituted of Management: “Job evaluation is the process, analysis and assessment of the job to ascertain reliably their relative importance using the assessment as a basis for balanced wage structure.”

From these definitions it is evident that job evaluation is a systematic procedure for rating the jobs. It can thus be defined as an orderly process of determining the fair wages for an individual job taking into consideration some common factors such as skill, responsibility, effort and working conditions etc.

Need for Job Evaluation:

The reasons for growing interest in job evaluation are discussed as follows:

(a) In view of increasing mechanisation and automation in industry. It has become unrealistic to pay workers primarily on the basis of their output. In many industries, it is the machine which determines the rate of output or production, so job evaluation will be of much utility.

(b) Job evaluation helps the management in evolving a rational and consistent wage policy and salary structure by providing criteria for fixation of salaries and wages.

(c) Job differences are not based on skill differences only. Job evaluation takes into account various other factors also in order to find out the worth of jobs.

(d) Job evaluation is of much help in proper recruitment and selection of employees because in order to find the worth of the job, job analysis is to be performed which is of great use while recruiting new employees.

(e) Job evaluation helps in bringing and maintaining harmonious relations between employer and employees, since it tends to eliminate wage inequalities within the organization or enterprise.

(f) The process of determining the wage differentials for different jobs becomes standardised through job evaluation. This provides uniform standards to be applied to all jobs in the organization.

Objectives of Job Evaluation:

According to an ILO report the aim of the common systems of job evaluation is to establish on agreed logical the relative value of different jobs in given industry/unit.

Following are the objective of job evaluation:

1. To know the worth of each job of the organization or rating of the job.

2. To establish a standard procedure for determining the relative worth of each job in the industry/unit.

3. To determine fair and equitable wage structure in the plant, industry or an organization.

4. To ensure that equal wages are paid to employees/workers with equal qualifications.

5. To ensure utmost job satisfaction to all employees/workers.

6. To provide a sound basis for consideration and determination of wage rates for similar jobs in industry and workmen.

7. To provide a fair chance for all employees for career advancement.

8. To provide information for devising good methods of recruitment, selection and training.

9. To help in introducing standardisation in wage differentials for various types of workers.

Principles of Job Evaluation:

There are certain broad principles which should be kept in mind while preparing a job evaluation programme.

The following eight principles are given by Kress:

1. Rate the job and not the man. Each element should be rated on the basis of job requirement.

2. The elements selected for rating purpose should be easily explainable and understandable in terms of factors that would avoid any overlapping. The same qualifications should not be rated under different headings.

3. The elements should be well defined and properly selected.

4. Any job rating programme must be known to foreman and employees. The success of plan shall depend on a clear-cut explanation and its illustration.

5. Foreman should participate in the rating of jobs in their concerned departments.

6. The employees will provide maximum co-operation to job evaluation programme if they are given opportunity to discuss job rating.

7. In talking to foremen and employees any discussion of value should be avoided.

8. To many wages rates related with skill or nature of work should not be established. It will be unwise to adopt an occupational wage for each total of point values.

These principles of job evaluation can be applied to all kinds of jobs irrespective of size. The main objective is to pay each job according to complexities involved in it.

Benefits of Job-Evaluation:

Job evaluation has the following benefits:

1. Job evaluation is an objective technique of ranking jobs. It helps in removing disparities in wage structures.

2. It helps in fixing new jobs in existing wage structure.

3. The grievances resulting from relative wages are easily eliminated because these are based on a definite criterion. It also helps in improving management employee relations.

4. It provides greater uniformity in wage rates, thus simplifying wage administration.

5. The data collected for job evaluation may also help in improving selection, transfer, promotion procedures on the basis of comparative job requirements.

6. Any dispute regarding wages can be settled by referring it to job evaluating committee.

7. The change in technology also changes job contents. Job evaluation is helpful in reviewing job rates in the light of technological changes with which job contents change.

8. It also provides good criteria for bonus schemes and helps in job classification as well as work simplification.

Essentials for the Success of Job Evaluation Programme:

A job evaluation programme will be successful only if it is well understood by each and every one concerned (employee/worker) in the organization and is based on certain principles. The basis evolved for it should be fair and equitable.

The following measures will help in the success of job evaluation programme:

1. A job evaluation system should be well clear to the supervisory staff. It is they who are to convince the concerned about the desirability of the system. If supervisory staff is not clear about the system then they will not be able to publicise it properly.

2. The supervisory staff should be given proper training to implement the system properly.

3. The system should be well publicised regarding all its aspects. The employees should be made well aware about the procedure to be adopted and the factors to be taken up in a job evaluation programme.

4. There should be separate pay structures for all major categories of employees/workers. It will not be possible to group together persons having different nature of jobs. It may be possible to group together employees.

It may not be possible to have an equally applicable pay structure for office employees, sales staff, workers etc. The wages offered must be commensurate with the existing wage rates or wage structure.

5. The administration of the job evaluation programme should be properly explained to concerned employees so that they do not have any apprehension about it.

Limitations of Job Evaluation:

Job evaluation system suffers from the following limitations:

1. Human bias cannot be eliminated completely from any job evaluation method even if efforts are made to make it systematic. The element of human judgement is present in all the methods of job evaluation.

2. The factors considered for job evaluation sometimes overlap. The weightage given to them and their reliability becomes questionable.

3. Job evaluation will have to be done regularly because the factors considered for it today may not remain valid tomorrow because of technological changes.

4. There are apprehensions among workmen when job evaluation is introduced for the first time. It may create doubts in the minds of those whose jobs are evaluated.

5. Job evaluation programme requires lot of time and specialised technical personnel.

6. The introduction of job evaluation scheme may require substantial changes in the existing set up. This change may involve appreciable costs and the concern may not be able to bear this financial burden.

7. This system is suitable to big concerns only because it is very expensive.

8. The trade unions consider it as an encroachment on their right to negotiate for wage structure.

9. This system causes inflexibility. The demand and supply of labour is the main cause for wage differentials.

10. There may be a conflict about the factors to be chosen for job evaluation. Workers insist on the inclusion of some factors which they feel favourable to them.

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Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.