JOB EVALUATION: A TOOL FOR WAGE/SALARY DETERMINATION IN ORGARNIZATIONS

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CHAPTER ONE

 

INTRODUCTION

 

  • BACKGROUND OF THE STUDY

In any organization once a right candidate is placed on a right job, the person needs to be duly compensated for the job he/she performs. To ensure that this is adequately done, there should be an established consistent and systematic relationship among compensation rates for all the jobs within the organization. The process of carrying out such activity is termed “Job evaluation”.

In carrying out job evaluation, analysis of different jobs are done in order to match the duties of job with the required skill, knowledge, competence, talent potential, education, work environment, responsibilities, etc.

Different jobs need to be evaluated comparatively to determine their relative worth so as to fix wages, salaries and benefits for each job.

In job evaluation the information provided by the job analysts is utilized to evaluate each job. Under job evaluation, the relative worth of different jobs are studied and compared. In other words job evaluation is determining the comparative worth of various jobs. British Management Institute (1951).

After determining the relative worth of jobs, they are priced, that is, wages and salaries are fixed. This enables organizations to minimize inequalities. Job evaluation plays a prime role in establishing the pay structure. It rates the job alone and establishes internal equality.

After job evaluation, all wage and salary earners are to receive pay. The total pay received are made up in quite a number of different ways by considering some elements in the pay structure such as basic rate, premium rate (over time), bonuses, share of profit, allowances and fringe benefits.

An effective job evaluation can help to identify the number of people employed within different categories and how the salary budget is apportioned.

Job evaluation is necessary for sustaining cordial relations within and between employee and employer. Employees that are satisfied with the relative worth of their job tend to put more effort in their work, this can directly boost the organizations performance and also give them an edge over their counterparts.

 

STATEMENT OF THE PROBLEM

Job evaluation is necessary to boost the morale of workers and to enhance productivity.

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