1. Definition of job evaluation
A process aimed at determining relative differences between jobs within an organization by measuring the size or weight of jobs
Job evaluation is the process of determining how much a job should be paid, balancing two goals
• Internal Equity: Paying different jobs differently, based on what the job entails
• External Competitiveness: Paying satisfactory performers what the market is paying
2. Purpose of job evaluation
Common purposes of job evaluation include:
• Identify “families” of occupations,
• Evaluate “fit” between candidates and job requirements, and
• Develop career paths.
• Identify skills and competencies needed for successful performance,
b. Pay administration
• Define key responsibilities and skills to aid in conducting salary surveys, and
• Assign jobs to a grade structure.
• Develop a grade structure and pay ranges,
c. Internal equity
• Determine whether different jobs have comparable requirements and responsibilities, and
• Ensure compliance with the Equal Pay
3. Factors affecting the job values
a. Market rates
It can be said that a job is worth what the market says it is worth. Retaining people will be very difficult if their rates of pay are not kept in line with those prevailing in the local and national labor markets.
b. Negotiated pay scales
The negotiated rates will be influenced by the market rates, the relative strength of the employers and the unions, the economic situation, legislation, and government anti-inflationary pay regulations.
c. Internal relativities and equity
They should aim to achieve equity in the sense that individuals should feel that their rewards are in balance both with their own output in the shape of effort, skill and contribution, and with the rewards received by others in relation to their output.
4. Methods of job evaluation
Market pricing using going market rates as the primary determinant of a job’s worth and pay.
Ranking ordering jobs based on their relative value to the organization.
Classification method. 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.
Factor Comparison is a set of compensable factors are identified as determining the worth of jobs.
Point Method is the points rating scheme is based on an analysis of separately defined characteristics or factors which are assumed to be common to all the jobs
The Hay system assesses each job by examining three main elements of job content which are common to all jobs to one extent or another: Know How, Problem Solving, Accountability.