It is a method for comparing different jobs to provide a basis for a grading and pay structure. Its aim is to evaluate the job, not the jobholder, and to provide a relatively objective means of assessing the demands of a job.
However, it is important to recognize that to some extent any assessment of a job’s total demands relative to another will always contain elements of subjectivity. The aim is to minimize subjectivity and make decisions about jobs as rational, consistent and transparent as possible.
It determines the reliability and worth of a job. This provides adequate information for framing compensation package by the personnel manager.
- Lessening the disparity in salary structure: Salary determines the involvement and motivation of an employee. Thus the objective job evaluation should be very specific in lessening the disparity in salary structure.
- Specialization: Job evaluation can define a job and fix the salary for it. It would help many a enterprises to have a lot of specialized employees for different jobs with a defined salary structure.
- Selection of employees will be very easy: During the selection of the candidates the job evaluation works a lot. The factors determining job evaluation can be taken care during selection process of candidates.
- Agreement between employers and employees: There can be established a congenial relationships between employers and employees. And conflicts related to salaries can be reduced.
- Standardization: Job evaluation can standardize the salary differentials for different jobs and thereby by can bring uniformity into salary structure.
- Significance of new jobs: Job evaluation shows the relative value of new jobs in a concern.
Job evaluators often assess jobs based on these factors:
- Training level or qualifications requirements
- Knowledge and skills requirements
- Complexity of tasks
- Interaction with various levels of the organization
- Problem-solving and independent judgment
- Accountability and responsibility
- Decision-making authority
- Degree of supervision required
- Cross-training requirements
- Working conditions
- Degree of difficulty in filling job
Steps in job evaluation
- Introduce the concept
- Obtain management approval
- Train the job evaluation selection team.
- Review and select the method.
- Gather information on all internal jobs.
- Use information to fully expand job descriptions.
- Use the selected evaluation method to rank jobs hierarchically or in groups.
- Link the ranked jobs with your compensation system or develop a new system.
- Implement the job evaluation and compensation systems.
- Periodically review your evaluation system and the resulting compensation decisions.