Job Evaluation is a tool used to determine the relative worth of a job so as to differentiate its wage/salary from other job types. In other words, job evaluation is a comparative process that compares the inherent value or worth of a job in a workplace. Some of the factors considered when establishing the relative worth includes the job description and specification. Most companies/employers view job evaluation as a significant process as it helps them compensate their workers as per the grades of jobs they perform. Failure to undertake and observe job evaluation among your employees can result in inequity or inequitable compensation and, eventually, low work output from employees.
The main objective of performing a Job Evaluation is to establish the relative worth of various jobs within an organization. Once the relative worth is achieved, it will help the management come up with an equitable structure of compensating workers. Usually, the relative importance of jobs does vary, and so should be compensation. The following are other specific objectives of a Job Evaluation:
- It helps eliminate compensation inequalities. It helps in establishing pay rates according to other similar jobs within the organization.
- It ensures that all the qualified employees are compensated according to the skills and work have done.
- It establishes a useful reference for settling complains regarding individual wage rates
- It provides useful information to the organization regarding employee selections, hiring, and training, among others.
- It facilitates a career benchmark plan for workers
Job Evaluation Process
Oftentimes, Job Evaluation does involve a number of systematic steps that highlight important determinants of a job within an organization. The following is a detailed process you should follow when making a Job Evaluation.
First and foremost, you need to start with the job analysis. Here, you’ll need to obtain various information on job contents as well as the appreciation of employee requirements. Also, the job should be outlined analytically by checking out the job details such as the important tasks done, what skills are used, and other qualities needed for success. The information noted down during the analysis should be precise and relevant to the job description.
This is the second step in conducting a Job Evaluation. Here, the organization should look at factors that dictate the employee’s compensations. These factors are crucial as they determine the relative position of a job in a job hierarchy. At the same time, the compensable factors help inform the job executives the type of contributions is rewarded. Basically, the backbone of Job Evaluation lied majorly in compensation actors. The following are some of the compensable factors to consider:
- Experience level
Here, you need to consider the length of prior experience an individual has or the length of experience needed for a specific job. Plus, you can determine whether the employee has worked on a similar capacity before.
- Academic qualifications
Identify some of the academic qualities needed for a specific job position.
- Work condition
The work condition also helps determine the amount of compensation in an organization. Work conditions can be affected by various factors, such as severe environmental conditions and location.
- Confidential information
The extent of information an employee is supposed to handle can also dictate the amount of compensation and other benefits. For instance, if the employee is exposed to confidential information that needs the utmost protection, they may be subjected to higher compensation.
- Complexity of duties
The level of job difficulty is also a factor worth considering. The more the complex a task is, the higher the compensation.
- Mental or physical demands
The amount of concentration, judgment, decision making, or any other mental input a task has can affect the compensation amount. Also, if the task requires lots of physical effort, the wages will be affected in one way or the other.
This is the third step of Job Evaluation. Here, you should select the best method of job appraisal. Make sure that the method chosen is consistent with the compensable factors highlighted above. The most common job appraisal methods include point factor, factor comparison, job ranking, and job classification.
- Point Factor
This method of Job Evaluation is commonly used for quantitative purposes. It breaks down jobs into compensable factors identified above. When using this method, points are assigned to the compensable factors, and a pay structure determined. Thereafter, the points are quantified, and the jobs’ real value reached. In as much as this method requires much time, its value goes beyond compensation.
- Factor comparison
This method entails a comparison between the specific job to other similar posts either within the organization or surrounding market rates. The organization management often conducts a benchmark to come up with data for each compensable factor. This system calls for keen monitoring of market rates so as to maintain the system integrity.
- Job ranking
Job ranking is probably one of the simplest methods of Job Evaluation. Here, the jobs are often examined as a whole rather than looking into individual factors. According to experts, the job ranking method is best suitable for small organizations with fewer job positions.
- Job classification
Here, the evaluator notes down the descriptions of each job class then puts them in various grades that relate to the class descriptions. One reason why this method isn’t popular is that one position can fall under various job classes or grade levels.
This is the fourth step of the Job Evaluation process. This step involves a thorough selection and identification of various job structures within the organization. Usually, the evaluators will use a suitable Job Evaluation method to arrive at the job structure. The job structure should be composed of a hierarchy based on job category and level.
The Wage structure, also known as the salary structure, is the final step of the Job Evaluation process. Here, your sole role is to price the various job structures identified in the previous stage. This stage helps the evaluators come up with a specific figure that each employee should be compensated as per their job structure. Remember that for one to fall under a job structure, various compensable factors play effect, for instance, the level of experience, the rank of the employee, the duration in which the employee has worked in the company, and many more.
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