Job evaluation determines the relative worth of a job as compared with another job or many others. It does not set rates of pay (that’s what job pricing does); rather, it compares jobs with one another or measures them against a standard, so that we can say that the job of plant manager ranks higher than that of clerical.
Such information is vital to the organization because it serves as the foundation for many aspects of the human resources program. First, it carries over into the job pricing phase, with the result that jobs of relatively greater value within the firm are compensated more highly than those of relatively less value. Next, job evaluation pinpoints existing wage inequities.
Job evaluation exposes situations in which jobs are not being compensated in proportion to their relative value. For instance, if we know that the General manager job is classified higher than the clerical, and if we then discover that the differential in the average rates paid to the two jobs is only $50 per week, we can conclude without question that either the clerical job is being paid too high or the plant manager position is being paid too low.
Job evaluation also gives the organization a system for assigning wage rates to newly created jobs in accordance with their contribution to the firm. A new job, such as Web designer, can be evaluated and placed in the appropriate grade. This ensures that the Web designer hired by the firm will be paid fairly in relation to other jobs within the organization because the job has been placed in a grade with other positions of similar worth.
Through a formal program of job evaluation, the firm can provide a sound basis for the rates paid to employees who are transferred, demoted, or promoted from one job to another. Because job evaluation gives us the relative value of each position, we know that when an employee moves from clerical to General manager, this is a promotion to a job of significantly higher value to the firm and thus deserving of a higher rate of pay.
Leading Point Process
Leading Point deploys different techniques in designing and delivering Job Evaluation Assignments, the most suitable being determined by the characteristics of the organization, including its size, the number of jobs involved, the time available for the study, the past experience of those responsible for the effort, and other organizational traditions.