Money motivates people to perform and your performance affects how much you get paid so that’s why a job evaluation is so important. The salary or wage you get is often determined through job evaluations because the salary you get depends on how valuable your job is to your employer.
On the flip side, a well-paid employee always puts a relatively greater amount of effort into his work. Therefore, it is very important to evaluate the salary and wages provided to employees, and ultimately develop a better payment system to encourage staff to do better.
A job evaluation can be a very effective way to help employees understand what is expected of them in their position. Of course job evaluations also help employers assess whether an employee is doing all that is expected in a position. Up next we’re going to tell you how job evaluations affect pay.
Basic Concept of Job Evaluation
In simple words, job evaluation refers to establishing the value or worth of a job. It is a process of systematically analyzing and assessing various jobs to discover their actual worth within an organization.
The job evaluation process is largely dependent on several factors. These factors include academic qualifications, experience levels, overall abilities, responsibilities to fulfill, mental and physical efforts, and the organization’s working environment as well.
Objectives of Job Evaluation
The primary objective of job evaluation is to determine the relative worth and value of different jobs in an organization and eventually serve to develop a fair salary structure. Besides that other important objectives of job evaluation are as follows.
- It helps to rate the jobs in the organization on the basis of their complexities and importance. This assists in determining and fixing the salaries accordingly.
- Job evaluation helps to bring harmony and set a good relationship between labor and management by eliminating wage inequalities.
- It helps in minimizing recruitment and selection costs because it helps in retaining employees. It inspires keeping down the employee turnover ratio.
- Job evaluation also helps to identify the needs of training and development requirements by comparing the difficulty level and importance of various jobs.
Establishing a Salary Structure
As already mentioned above, a major reason a company uses job evaluation schemes is to determine if the salary structure is set properly or not. The evaluation results help to identify high-achieving employees and increase the company’s productivity.
By realizing the results of the job evaluation, the executive teams can decide where pay should be increased and may also be decreased sometimes. However, the downward adjustment might not always be possible due to various reasons like union support or employee contracts.
Job evaluation is a very simple and easy approach to help set and determine salaries. The process begins with writing job descriptions for all the positions in the organization. Then rank the positions according to their key responsibilities. Afterward, place them in a compensation structure with relatively equal weights into various tiers of positions.
When you are ready with your list, and then make research on salary surveys to learn what other employees of a similar industry are paying for alike positions. This will be helpful to set salaries on the basis of the market rates.
Pay equity refers to equal pay for the work of equal value, not depending upon the gender, working departments, and other factors. Inter pay equity is a very important factor that the employers need to take care of while determining what to pay to the employees. Similarly, the market analysis will help to bring external pay equity.
In order to consider pay equity in the organization, the employers are supposed to ensure employees working in the same position follow the same salary structure. How much a person gets paid in a specific position is also determined by experience level, academic qualifications, and performance level.
Besides that, if you see any inequity in the salary based on gender, race, religion, or class, employers are required to address the inequality and make adjustments accordingly.
The Bottom Line
An effective job evaluation helps employees to understand what the position entails and whether or not growth is a possibility. And this job evaluation can also help an organization to implement an effective salary and wage structure that promotes efficient growth.