To decide and strategize the pay structure in a firm, job evaluation is key method which helps in comparing the value of relative jobs at different levels. ACAS defines the job evaluation method as:
From the year 1920, this technique is commonly used and known as well-established method. And with the years passing by, this method has reached to its boosting point of series. The first in the series is defined between the year 1965-1974 when policy of incomes were generated in order to introduce method of job evaluation. And for the companies which were open to introduce the same were asked to bear expenditure of the specific permit of the same. In continuity to the same, the year 1980 was marked as hinge year when this method was used in similar cases of payment. And in the recent years when the organizations are open to mergers, this method is highly sustained towards the agreement of single-status contracts which helps in resoling payment issues as well.
Even after such a famous method was introduced in different firms, it has been misunderstood at many levels. The following points thus help in the clarification of the same:
Theories by Armstrong and Murlis, IDS and Smith and Nethers all summarize the methods of job evaluation which are highly used in the organizations these days. These methods help in measuring the scheme of whole job in order to determine the ranking of jobs and the value of each to the business or organization. Please note that this method does not split the jobs into the constituent parts. In contradict to the same, there is an analytical approach required to measure each element of the job. Thus, schemes like points-rating systems are highly used in the firms in order measure each job on the basis of elements which includes efforts, responsibilities and skills of an employee for that particular job.
There are various degrees of each of these factors that indicated the value of its relative job with others which then leads to a scare of a particular job in demand in consideration to these factors. This in turn helps in determining the value of points which is relative to each job that helps in grading the payment structure of each organization. This type of analysis generally includes examination of each job description including the comparison by each factor. This strategy is generally carried out by the representative work force of the organization of managers in panel. With the technology increasing day by day, this method of job evaluation is carried in interest with computer-aided systems. These systems generally include a better platform to analyze the factors on the basis of questionnaires available for the organization as well as employees.
It was in United stated first, when each of these factors were decide by National Electrical Manufacturers Association which was then contradicted by International Labor organization when they produced their own list of factors which were mandatory in the method of job evaluation. But every organization follows different channel of factors which means there were only six out of ten factors which were considered under a single scheme of job evaluation.
In order to bring a simpler approach to the same, each point of factor was then allotted for single job evaluation by plotting the same on a graph. And if not graphical representation, teach point was listed as per the ranking indication from a highest to lowest point. Once this approach is clear, the decision are then made on the basis of points matching various grading of payments for each job description. Figure 27.3 helps in better illustration of the same. The best approach which is widely used in the organizations is a graphical representation of the same where x-axis represents the current salary of the evaluated job versus y-axis that represents the point of job evaluation. The line which best fits the drawn is then considered by the organizations in order to assign job grading. And if you need help with such a strategy, popular software called Salary-modeling is highly appreciated.
The predicted error of jobs not being pad fairly is a general outcome that organizations faces even after the method of job evaluation is considered. The issue of finding correct amout of funds is generally faced by organizations if the results of job evaluation requires increase in the pay either effective immediately or step by step since job evaluation method also costs funding to the organization. But the most concerning scenario is depicted when the results of the evaluation stated overpaid employee in the firm as it is next to impossible and unethical to decrease the pay of an employee against the contract of employment. In order to resolve such an issue, there are two approaches to the same:
One of the most widely approachable methods of job evaluation is titled as Hay Guide Chart-Profile Method. This strategy is generally used to evaluate the jobs at a management position which includes measures of four different factors:
Under this method, jobs are generally measures under the guidance of charts considering each factor one by one. A job profile is generated which reflects the relationship among these factors which helps in producing the ranking and eventually a better structure of payment. This method is widely used by owners of the firms by collecting the relative data that helps in comparing different payment structures. This method is helpful not only in defining the best pay structures within an organization but is relatively a better approach to examine and measure the relativity of external factors. Armstrong and Murlis and IDS describe the best of this method which is owned and developed by consulting firm.