Job Evaluations & Employee Compensation

Types of Job Evaluations And Employee Compensation Methods Job evaluation is a process deemed necessary while devising a fair and balanced pay scale for employees of an organization. The process involves gauging importance of one job over another, within the organization, the parameters of judgment remain to be, monetary worth and complexity of job. Through this way only, organizations are able to differentiate between two different job descriptions and designating them the adequate pay scale.

Different discretion's are applied while developing job descriptions and salaries. However the most commonly used techniques are as follows, factor comparison, ranking, point method and classification method. The most complicated technique of all is the factor comparison. This job evaluation method is very time consuming. The process starts by identifying factors or characteristics which are used as evaluation criteria. These factors are compared with similar jobs present in market and accordingly external standards are established which helps the organization devise market equivalent pay scale.

Another job evaluation method is the ranking method. This is the most commonly used procedure of them all and also the simplest one. Only a single factor is kept into consideration while conducting a job evaluation, like the level of difficulty or education level required to perform a certain task. The jobs are then compensated with respect to the ranking given to the factor, this way the highest ranked job becomes the highest paid job and similarly lowest ranked becomes lowest paid. However the strongest criticism of this evaluation is that by selecting one factor it leaves behind several other factors which directly or indirectly affect the job.

Another seeming complex, yet effective in nature, process of job evaluation is the point method.

Appraisal managers and evaluators assign points to different factors, as identified in the factor method.

These factors are skill level, job responsibilities and effort intensiveness. The job description is thoroughly evaluated with these parameters and subsequently points are assigned to employees on their performance in a particular domain. The one with highest points get the highest pay and similarly the one with lowest performance gets the lowest pay.

Lastly we have the classification method. This job evaluation method requires the evaluator to categorize jobs; these categories are often called grades. Each grade has the same level of difficulty, requires similar level of education or work experience and also has the same pay scale. This is a rather systematic way of job evaluation with a very little margin of personal discretion as opposed to other methods.

It is important for an organization to ensure a fair job evaluation process so that their employees stay motivated and have a firm belief that they would get what they reap. Unfair reward management system would only lead to a disoriented workforce and drop in productivity due to lack of motivation.

Reference: http://www.researchomatic.com/Job-Evaluation-And-Internal-Alignment-104590.html