To design a pay structure and also to know the competencies required for one role, one needs to know size of one job relative to other. Job evaluation is the process of comparing one job role to another and determining the relative importance and competencies required for a particular job profile.
Job evaluation is the building block for formulating a reward strategy. This also helps in formulating the career path of an employee. The real test, however would, whether it is acceptable among all the participants. If one evaluates a job in a wrong manner, the reward strategy would be designed accordingly and this can result in employee dissatisfaction and hence increased turnover. But it is very important to note that, the evaluation is done for the job and not for the employee.
In the ranking method of job evaluation, the jobs are rated on the basis of the salaries prevalent in the market. But then it is noted that jobs need not be exactly similar to the market and the rating within the organization might be different from that present in the market. Hence this method has less focus on internal equity.
In the whole job slotting method, jobs are compared one on one and hence it is pretty much subjective. So it becomes a cause for criticism of HR. So HR needs to be really cautious about this.
In the point factor approach, various factors of a job are assigned points. Each factor is given a weightage and a tally of points is made. Then the relative worth of each job is found out.
Ultimately, similar jobs are categorized into similar job grades.There are other methods like simple classification, factor systems, market pricing etc.
But certain points to keep in mind are that, the methods needs revision depending upon changing market conditions and external and internal environments.
Job evaluation is the building block for formulating a reward strategy. This also helps in formulating the career path of an employee. The real test, however would, whether it is acceptable among all the participants. If one evaluates a job in a wrong manner, the reward strategy would be designed accordingly and this can result in employee dissatisfaction and hence increased turnover. But it is very important to note that, the evaluation is done for the job and not for the employee.
In the ranking method of job evaluation, the jobs are rated on the basis of the salaries prevalent in the market. But then it is noted that jobs need not be exactly similar to the market and the rating within the organization might be different from that present in the market. Hence this method has less focus on internal equity.
In the whole job slotting method, jobs are compared one on one and hence it is pretty much subjective. So it becomes a cause for criticism of HR. So HR needs to be really cautious about this.
In the point factor approach, various factors of a job are assigned points. Each factor is given a weightage and a tally of points is made. Then the relative worth of each job is found out.
Ultimately, similar jobs are categorized into similar job grades.There are other methods like simple classification, factor systems, market pricing etc.
But certain points to keep in mind are that, the methods needs revision depending upon changing market conditions and external and internal environments.
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