Unit 9: Job Evaluation: Structure
Unit 9: Job Evaluation: Structure
Structure:
9.1 Introduction
Objectives
9.2 Concept of Job Evaluation
SAQ’s
9.3 Objectives of Job Evaluation
SAQ’s
9.4 Job Evaluation Methods
SAQ’s
9.5 Advantages and Limitations of Job Evaluation
SAQ’s
9.6 Job Satisfaction
SAQ’s
9.7 Promotion & Transfers
9.8 Summary
9.9 TQ’s
9.10 Answers to SAQ’s and TQ’s
9.1 Introduction
Some form of job evaluation is invariably part of a formal wage and salary programme. The
objective of job evaluation is to price the job rather than the man. Job evaluation is
concerned with assessing the value of the job in relation to another for it is only when each
job has been properly evaluated that a sound wage structure can be built. The British
Institute of Management has defined job evaluation as the process of analysis and
assessment of jobs to ascertain reliably their relative worth, using the assessment as a basis
for a balanced wage structure.
Objectives:
After studying this chapter you will be able to
1. Understand the concept of job evaluation.
2. State the objectives of job evaluation.
3. Evaluate the job evaluation methods.
4. Understand the need to transfer or promote the employees.
5. Find out the importance of job satisfaction.
9.2 Concept of Job Evaluation
All job evaluation systems depend heavily on job analysis and job description. Job analysis
indicates the specific duties to be performed by the worker and the circumstances under
which these duties are to be performed. A job description is a written record of the duties,
responsibilities and conditions of the job. The job description provides ' the essential
information on which each job is evaluated. The resulting measures of values are then
translated into wage and salary rates.
"Job analysis is the process of getting information about jobs; specifically, what the worker
does; how he gets it done; why he does it; skill, education and training required;
relationships to other jobs; physical demands and environmental conditions".
Job analysis and job evaluation do not replace, judgement in the administration of pay
structure. They merely provide facts in so far as facts can be obtained through observation on
which management and employees my base their decisions. Decisions thus made, should be
far sounder than those based upon general impressions.
Self Assessment Questions I
1. A _____________is a written record of the duties, responsibilities and conditions of
the job.
2. Job analysis is the process of_________________________; specifically, what the
worker does; how he gets it done; why he does it; skill, education and training
required; relationships to other jobs; physical demands and environmental conditions
3. Job analysis and job evaluation do not replace, judgment in the …………………
9.3 Objectives of Job Evaluation
The decision to measure or rate jobs should only be made with the intent to reach certain
objectives which are important to both management and the worker. Although there are
many byeproducts of job evaluation, the purpose is to work towards a solution of the many
wage and salary administrative problems which confront the industry. The belowmentioned
are some of the important objectives of a job evaluation programme:
1. Establishment of sound wage differentials between jobs.
2. Discovery and elimination of wage inequities.
3. Establishment of sound wage foundation for incentive and bonus.
4. Maintenance of a consistent wage policy.
5. Creation of a method of job classification, so that management and union officials may
deal with major and fundamental wage issues during negotiations and grievance
meetings.
6. Installation of an effective means of wage control.
7. Collection of job facts to air (a) Selection of employees, (b)Promotion and transfer of
employees, (c) Training of new workers, (d) Assignment of tasks to jobs, (e)Accident
prevention, (f) Improving working conditions, (g) Administrative organization, and (h)
Work simplification.
A fourfold system of classifying evaluation systems is presented here. Two are described as
nonquantitative and two as quantitative.
1. Nonquantitative evaluation measures,
a. The ranking system.
b. The jobclassification system.
2. Quantitative evaluation measures.
a. The point system.
b. The factorcomparison system.
Self Assessment Questions II
1. ______________________is the purpose is to work towards a solution of the many wage and
salary administrative problems which confront the industry.
2. _______________________systems are the ranking system and the jobclassification system.
3. Quantitative job evaluation measures are...........................................
9.4 Job Evaluation Methods
Ranking Method: Jobs are compared one with another and arranged or valued in the order
of their importance or their difficulty or their value to the firm. It is a highly subjective
method and depends upon the experience of the people doing the ranking.
Grade Description Method: This method depends upon recognition that there are
differences in the levels of duties, responsibilities and skills required for the performance of
different jobs. These differences, once recognized, can be expressed as grades or levels.
These grades can then be defined and jobs classified by the selection of a particular grade or
each job to correspond to its worth.
Point Method: Jobs show characteristics which are common to all or most. These
characteristics, called factors, generally fall under the four headings skill, effort,
responsibility and conditions. To each factor is attached a number of points, the number
varying according to the 'degree' of the factor involved. The sum of all the points for a job
permits its comparison with other jobs and thus a scale of pay is arrived at.
FactorComparison Method: This is associated with the name of E.J.Benge. Each factor
(as in the point method) is ascribed a money value. Key jobs, representing the various levels
or grades are ranked factor by factor and upon this ranking, a scale of pay/money value is
prepared. The sum of the values for each factor is taken to be the money value of job.
TimeSpan Method: It was propounded by Professor Jaques that the higher in the hierarchy
of organizational structure of jobs the longer the period before the results of a decision are
scrutinized for adequacy. An analysis of timespans for different jobs yields a scale of pay
felt to be fair.
GuideChart Profile Method: This is associated with the name of Dr. E.N.Hay. Three
factors, knowhow (education/experience), problemsolving, and accountability
(responsibility) are each divided into eight degrees or levels and these, qualified by a
second, or 'breadth' dimension, each factor and breadth being concerned with some aspect of
decisionmaking. Points are awarded for each degree as it is qualified, and the sums for
different jobs are compared.
Self Assessment Questions III
1. The __________________________depends upon recognition that there are differences in
the levels of duties, responsibilities and skills required for the performance of different jobs.
2. In the__________________________, each factor (as in the point method) is ascribed a
money value.
3. In the _____________________to each factor is attached a number of points, the number
varying according to the 'degree' of the factor involved.
9.5 Advantages and Limitations of Job Evaluation
Advantages:
1. Job evaluation is a logical and an objective method of ranking jobs relatively to each
other. It may thus help in removing inequities in existing wage structures and in
maintaining sound and consistent wage differences in a plant or an industry.
2. The method replaces accidental factors occurring in less systematic procedures of wage
bargaining by more impersonal and objective standards, thus establishing a clearer basis
for negotiation.
3. The method may lead to greater uniformity in wage rates and simplify the process of
wage administration.
4. Information collected in a process of job description and analysis can be used for
improvement of selection, training, transfer and promotion, procedures on the basis of
the comparative job requirement.
Limitations:
1. Though there are many ways of applying job evaluation in a flexible manner, rapid
changes in technology and in the supply of and demand for particular skills, create
problems of adjustment that may need further study.
2. When job evaluation results in substantial changes in the existing wage structure, the
possibility of implementing these changes in a relatively short period may be restricted
by the financial limits within which the firm has to operate.
3. When there are a large proportion of incentive workers, it may be difficult to maintain a
reasonable and acceptable structure of relative earnings.
4. The process of job rating is, to some extent, inexact because some of the factors and
degrees can be measured with accuracy.
5. Job evaluation takes a long time to complete, requires specialized technical personnel
and is quite expensive.
Self Assessment Questions IV
1. ___________________is a logical and an objective method of ranking jobs relatively
to each other.
2. Information collected in a process of _________________________can be used for
improvement of selection, training, transfer and promotion, procedures
3. When there are a large proportion of incentive workers, it may be difficult to maintain
a reasonable and acceptable structure of________________________.
9.6 Job Satisfaction
Job satisfaction is determined by a set of personal and job factors, personal factors relate to
worker's age, length of service, intelligence, skill, and other personality or temperamental
factors. R. Hoppock has made pioneering studies on job satisfaction and mentions six factors
as major determinants of job satisfaction, namely:
1. The manner in which the individual reacts to unpleasant situations.
2. The facility with which he adjusts himself to other persons.
3. His relative status in the social and economic group with which he identifies himself.
4. The nature of work in relation to the man's abilities, interests and training.
5. Security.
6. Loyalty.
One of the objectives of an enlightened personnel policy is to increase job satisfaction. To
achieve the objective of job satisfaction of the worker, the management must have a clear
idea as to what the workers want from their job.
Determinants of job satisfaction can be enumerated as: (1) Recognition as an individual; (2)
A meaningful task; (3) Job security; (4) Fair wages (5) Opportunity to advance (6)
Avoidance of arbitrary action (7) Good working conditions (8) Reputation of the concern (9)
A voice in matters affecting him (10) Competent leadership and (11) Congenial association.
Self Assessment Questions V
1. The major determinants of job satisfaction are (name 3 of them).............
2. One of the objectives of an enlightened personnel policy is to
increase___________________.
3. Determinants of job satisfaction can be enumerated as (name any 3)......................
9.7 Promotion & Transfers
From a general point of view, selection involves the following types of problems:
1. Selection from within or outside the company
2. Hiring new employees from outside the company.
3. Promotion with in the company
4. Discharge of old employees.
Promotion: A few companies do have a clear cut policy while certain organisations issue
circulars as and when they need. Many companies develop policies over a period of time
through settlements and agreements with the workers/unions.
In promoting employees consideration should be given for establishment of the horizontal or
vertical promotion. The desirability of securing assistants who complement rather than
supplement their superiors is the major point in a successive plan which is an integral part of
manpower planning.
Let us understand only two types of promotion Vertical & Horizontal promotion. In
Vertical Promotion, employees are promoted from one rank to the next higher rank in the
same department or division. This is based on the belief that this leads to effective utilization
of experience gained in the same department. It also gives an opportunity to the employees
to go up while increasing their specialization in their area of operation. However, it has got
one disadvantage. The vacancies may be very few in a department. E.g. In a big University,
a Lecturer working in a particular Department may not become a Professor or the Head of
the Department unless his superiors die/retire/resign. This makes the person frustrated.
Besides, this type of promotion limits a person's contact with other departments and does not
permit him to enhance his knowledge/expertise with each year's experience. Because his
experience would be one or two year's knowledge multiplied by 10 to 15 years rotation. If he
does not get his promotion at the right time since the room at the top is limited he will also
start disliking his job / organisation. As a result, he becomes counterproductive.
Horizontal promotions are considered an alternative to this by certain organisations. Under
this policy, an employee may be transferred from a position in one department to a position
of higher rank in another department or to the same rank in a different department if the
transfer gives him an opportunity to acquire greater knowledge and wider experience. E.g. if
a Senior Lecturer cannot get promotion in a particular Department for obvious reasons, he
may be transferred as Registrar of the University or as Controller of Examinations or
Director of Distance Education. However, there is one difficulty. Unless the person is quite
dynamic and intelligent, he may find the new assignment a tough one and irksome. To some,
it may be a cause for frustration.
However, for many, Horizontal promotion even if it is only a paper promotion is a challenge
since it allows them job rotation.
The Next question to be answered is the type of man to be promoted. There is a natural
tendency for an executive to select as his assistant one who has the same or similar abilities
as his own. This may not result in most efficient combination. It is often observed that the
assistant may imbibe the weaknesses of the Boss.
Promotion is a part of the general problem of selection. Promotion is also closely linked with
Training, Posttraining Placement, development and incentives. Promotions and transfer
make employees flexible.
Definitions of promotion:
1. PIGORS & MEYERS: Define promotion as "the advancement of an employee to a better
job better in terms of greater respect of pay and salary. Better houses of work or better
location or better working conditionsalso may characterize the better job to which an
employee seeks promotions, but if the job does not involve greater skill or
responsibilities and higher pay, it should not be considered a promotion." This definition
takes into consideration only a Vertical promotion.
2. DALE YODER: According to Dale Yoder, it is a "movement to a position in which
responsibilities and presumably the prestige are increased. Promotion involves an
increase in rank ordinarily; promotion is regarded as a change that results in higher
earnings, but increased earnings are essential in a promotion." This definition talks of
both vertical and horizontal promotions.
3. KOONTZ O'DONNEL observed that promotion is "a change within the organisation to a
higher position with greater responsibilities and used for more advanced skills than in
previous position. It usually involves higher status and increase in pay."
Promotions can be from within or can be from outside depending upon the need of the
organisation as both have certain advantages and disadvantages. So also are the arguments
for and against the concept of promotion on seniority or merit. A wise policy which is
followed by many organizations is a proper blending of both.
Opposite to promotion is demotion. It is more as a punishment. In certain cases it can be on
cost reduction considerations.
Transfers: PIGORS & MEYERS Consider transfer as "the movement of an employee from
one job to another on the same occupational level and at about the same level of wages or
salary" No appreciable change in task or responsibility is expected, SCOTT and others
define transfer as “the movement of an employee from one job to another. It may involve a
promotion, demotion or no change in job status other than moving from one job to another."
Types of Transfer: Transfers are of many types. It may be a reward transfer or a
punishment transfer. Transfers can be classified as production transfers, Replacement
transfers, Versatility transfers, shift transfers or remedial transfers. They can be temporary or
permanent.
However, it is better to have a clearcut and flexible transfer policy. Otherwise, it may lead to
a lot of heart burning among the affected employees.
9.8. Summary
· The term wage is commonly used for those employees whose pay is calculated according
to the number of hours worked.
· A job is defined as a collection or aggregation of tasks, duties, and responsibilities that, as
a whole, is regarded as the reasonable assignment to an individual employee.
· Job satisfaction is determined by a set of personal and job factors.
· The word 'salary' is defined in the Oxford Dictionary as fixed periodical payment to a
person doing other than manual or mechanical work.
· According to Subsistence theory, wages tend to settle at a level just sufficient to
maintain the workers and his family at minimum subsistence levels.
· Francis A.Walker propounded Residual claimant theory. According to him, there are
four factors of production/ business activity viz., land, labour, capital and
entrepreneurship.
· Purchasing power theory holds that the prosperity, productivity and progress of industry
depend on there being sufficient demand to ensure the sale of its products and pocketing
of reasonable profits.
· A minimum wage has been defined by the Committee as "the wage which must provide
not only for the bare sustenance of life, but for the preservation of the efficiency of the
worker.
· Fair Wage is the wage which is above the minimum wage but below the living wage".
· Living Wage is "one which should enable the earner to provide for himself and his
family not only the bare essentials of food, clothing and shelter but a measure of frugal
comfort, including education for his children, protection against illhealth, requirements
of essential social needs and a measure of insurance against the more important
misfortunes, including old age".
· Job evaluation is concerned with assessing the value of the job in relation to another.
· Job analysis is the process of getting information about jobs.
9.9 Terminal Questions
1. What is job satisfaction? What are the prerequisites for job satisfaction?
2. Discuss two popular Job Evaluation methods.
3. Briefly discuss Promotions and how it serves as a job satisfaction method
9.10. Answers to SAQs and TQs
Self Assessment Questions I
1 Job description, 2 getting information about jobs, 3 administration of pay structure.
Self Assessment Questions II
1 Job evaluation, 2 Nonquantitative job evaluation, 3 the point system and the factor
comparison system
1. Self Assessment Questions III
1 Grade Description Method, 2 FactorComparison Method, 3 Point Method
2. Self Assessment Questions IV
1Job evaluation, 2 job description and analysis, 3 relative earnings
3. Self Assessment Questions V
1 The manner in which the individual reacts to unpleasant situations, The facility with
which he adjusts himself to other persons, His relative status in the social and economic
group with which he identifies himself; 2 job satisfaction, 3(1) Recognition as an
individual; (2) A meaningful task; (3) Job security;
Answers to TQs:
1. Refer to 9.2 & 9.3
2. Refer to 9.4
3. Refer to 9.6 & 9.7