Module II-Management-Job evaluation I.

Nature,Scope and importance of Job evaluation

Job evaluation is a process of determining the relative worth of a job. It is a process which is helpful even for framing compensation plans by the personnel manager. Job evaluation as a process is advantageous to a company in many ways: 1. Reduction in inequalities in salary structure - It is found that people and their motivation is dependent upon how well they are being paid. Therefore the main objective of job evaluation is to have external and internal consistency in salary structure so that inequalities in salaries are reduced. 2. Specialization - Because of division of labour and thereby specialization, a large number of enterprises have got hundred jobs and many employees to perform them. Therefore, an attempt should be made to define a job and thereby fix salaries for it. This is possible only through job evaluation. 3. Helps in selection of employees - The job evaluation information can be helpful at the time of selection of candidates. The factors that are determined for job evaluation can be taken into account while selecting the employees. 4. Harmonious relationship between employees and manager Through job evaluation, harmonious and congenial relations can be maintained between employees and management, so that all kinds of salaries controversies can be minimized. 5. Standardization - The process of determining the salary differentials for different jobs become standardized through job evaluation. This helps in bringing uniformity into salary structure. 6. Relevance of new jobs - Through job evaluation, one can understand the relative value of new jobs in a concern.

Features
The purpose of job evaluation is to produce a defensive ranking of jobs on which a rational and acceptable pay structure can be built. The important features of job evaluation may be summarised thus:

It tries to assess jobs, not people. The standards of job evaluation are relative, not absolute. The basic information on which job evaluations are made is obtained from job analysis. Job evaluations are carried out by groups, not by individuals. Some degree of subjectivity is always present in job evaluation. Job evaluation does not fix pay scales, but merely provides a basis for evaluating a rational wage structure.

Benefits
The pay offs from job evaluation may be stated thus:

It tries to link pay with the requirements of the job. It offers a systematic procedure for determining the relative worth of jobs. Jobs are ranked on the basis of rational criteria such as skill, education, experience, responsibilities, hazards, etc., and are priced accordingly. An equitable wage structure is a natural outcome of job evaluation. An unbiased job evaluation tends to eliminate salary inequities by placing jobs having similar requirements in the same salary range. Employees as well as unions participate as members of job evaluation committee while determining rate grades for different jobs. This helps in solving wage related grievances quickly. Job evaluation, when conducted properly and with care, helps in the evaluation of new jobs.

It points out possibilities of more appropriate use of the plant's labour force by indicating jobs that need more or less skilled workers than those who are manning these jobs currently.

II.Concepts of Job description and specification

Though preparing job description and job specification are not legal requirements yet play a vital role in getting the desired outcome. These data sets help in determining the necessity, worth and scope of a specific job.

Job Description Job description includes basic job-related data that is useful to advertise a specific job and attract a pool of talent. It includes information such as job title, job location, reporting to and of employees, job summary, nature and objectives of a job, tasks and duties to be performed, working conditions, machines, tools and equipments to be used by a prospective worker and hazards involved in it. Purpose of Job Description The main purpose of job description is to collect job-related data in order to advertise for a particular job. It helps in attracting, targeting, recruiting and selecting the right candidate for the right job. It is done to determine what needs to be delivered in a particular job. It clarifies what employees are supposed to do if selected for that particular job opening. It gives recruiting staff a clear view what kind of candidate is required by a particular department or division to perform a specific task or job. It also clarifies who will report to whom. Job Specification Also known as employee specifications, a job specification is a written statement of educational qualifications, specific qualities, level of experience, physical, emotional, technical and communication skills required to perform a job, responsibilities involved in a job and other unusual sensory demands. It also includes general health, mental health, intelligence, aptitude, memory, judgment, leadership skills, emotional ability, adaptability, flexibility, values and ethics, manners and creativity, etc. Purpose of Job Specification Described on the basis of job description, job specification helps candidates analyze whether are eligible to apply for a particular job vacancy or not. It helps recruiting team of an organization understand what level of qualifications, qualities and set of characteristics should be present in a candidate to make him or her eligible for the job opening. Job Specification gives detailed information about any job including job responsibilities, desired technical and physical skills, conversational ability and much more. It helps in selecting the most appropriate candidate for a particular job.

Job description and job specification are two integral parts of job analysis. They define a job fully and guide both employer and employee on how to go about the whole process of recruitment and selection. Both data sets are extremely relevant for creating a right fit between job and talent, evaluate performance and analyze training needs and measuring the worth of a particular job.

III. Principles and Methods of Job evaluation

Job evaluation is not scientific-It cannot be since there is no way of scientifically measuring jobs. It is therefore a process of judgment. The correctness of the results it provides can only be assessed in terms of their acceptability to the vast majority of people to whom they apply. The key to such success lies in guiding the judgment made about jobs within a process which is systematic and minimizes the subjectivity of the results, ensuring they are as objectives and justifiable as possible. To do this there are certain requirements which must be met : 1. 2. 3. 4. An understanding of the job must be achieved. Judgments must be made about the size of each job. Common criteria are needed to assess the job content. A common scale of measurement is required against which to make judgments. 5. 5. Cross-checks are needed to ensure that the judgments are sound. Job Evaluation Methods There are 4 basic and traditional systems of job evaluation: The Ranking System, Job Classification or Grading system, the Factor Comparison System, and the Point System. i) Ranking - This method is one of the simplest to administer. Jobs are compared to each other based on the overall worth of the job to the organization. The 'worth' of a job is usually based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal), and working conditions.

Advantages : * Simple. * Very effective when there are relatively few jobs to be evaluated (less than 30). Disadvantages : * Difficult to administer as the number of jobs increases. * Rank judgements are subjective. * Since there is no standard used for comparison, new jobs would have to be compared with the existing jobs to determine its appropriate rank. In essence, the ranking process would have to be repeated each time a new job is added to the organization. Ranking Methods * Ordering Simply place job titles on 3x5 inch index cards then order the titles by relative importance to the organization. * Weighting * Paired Comparison ii) Classification - Jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. The classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used. Because of differences in duties, skills and knowledge, and other aspects of trades and labor jobs, job grading standards are developed mainly along occupational lines. The standards do not attempt to describe every work assignment of each position in the occupation covered. The standards identify and describe those key characteristics of occupations which are significant for distinguishing different levels of work. They define these key characteristics in such a way as to provide a basis for assigning the appropriate grade level to all positions in the occupation to which the standards apply.

Advantages * Simple. * The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method. Disadvantages * Classification judgments are subjective. * The standard used for comparison (the grade/category structure) may have built in biases that would affect certain groups of employees (females or minorities). * Some jobs may appear to fit within more than one grade/category. iii)Factor Comparison - A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are: o Skill o Responsibilities o Effort o Working Conditions Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics. o equitable pay (not overpaid or underpaid) o range of the factors (for each factor, some jobs would be at the low end of the factor while others would be at the high end of the factor). This process establishes the rate of pay for each factor for each benchmark job. Slight adjustments may need o be made to the matrix to ensure equitable dollar weighting of the factors. The other jobs in the organization are then compared with the benchmark jobs and rates of pay for each factor are summed to determine the rates of pay for each of the other jobs. Advantages o The value of the job is expressed in monetary terms. o Can be applied to a wide range of jobs. o Can be applied to newly created jobs. Disadvantages o The pay for each factor is based on judgements that are subjective. o The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities).

iv) Point Method - A set of compensable factors are identified as determining the worth of jobs. Typically the compensable factors include the major categories of: * Skill * Responsibilities * Effort * Working Conditions These factors can then be further defined. * Skill * Experience * Education * Ability * Responsibilities * Fiscal * Supervisory * Effort * Mental * Physical * Working Conditions * Location * Hazards * Extremes in Environment The point method is an extension of the factor comparison method. Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job. Jobs are then grouped by total point scores and assigned to wage/salary grades so that similarly rated jobs would be placed in the same wage/salary grade. Advantages + The value of the job is expressed in monetary terms. + Can be applied to a wide range of jobs. + Can be applied to newly created jobs. Disadvantages + The pay for each factor is based on judgements that are subjective.

+ The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities)

IV.Internal and external equity,Job surveys

Once job analysis has been done organizations need to decide upon the pay structures. Pay structure refers to the process of setting up the pay for a job in an organization. The process deals with internal and external analysis to estimate the compensation package for a job profile. Internal equity, External equity and Individual equity are the most popular pay structures. Job description provides the in depth knowledge about the job profile and its worth. Pay structures are the strong determinant of employees value in the organization. It helps in analyzing the employees role and status in the organization. It provides for fair treatment to all employees. Pay structures also include the estimation of incentives. The level of incentives also depends on the level of job position in the organizational hierarchy. Internal Equity The internal equity method undertakes the job position in the organizational hierarchy. The process aims at balancing the compensation provided to a job profile in comparison to the compensation provided to its senior and junior level in the hierarchy. The fairness is ensured using job ranking, job classification, level of management, level of status and factor comparison.

External Equity Here the market pricing analysis is done. Organizations formulate their compensation strategies by assessing the competitors or industry standards. Organizations set the compensation packages of their employees aligned with the prevailing compensation packages in the market. This entails for fair treatment to the employees. At times organizations offer higher compensation packages to attract and retain the best talent in their organizations