Job Evaluation

Components of Remuneration Base compensation Incentives Fringe benefits Perquisites Non Monetary incentives Challenging work environment Growth prospects Flexitime etc

Determination of wages –The sequence Minimum Wage Laws Job Analysis Admini stration Of Wage Structure Job Descriptions & Specifications Job Evaluation Wage Surveys Wage Structure Performance Standard Performance Standards Wage Payments

Job Analysis It is the process of collecting job related information.Such information helps in the preparation of job description and Job specification JOB ANALYSIS Job Specification Job Description

Job Analysis A statement containing items like Job title Location Job summary Duties Machines ,tools ,Equipment Materials & forms used Supervision given or received Working conditions

Job Specification A statement of human qualifications necessary to do the job . Education Experience training Initiative Physical effort Responsibilities Communication Skills Emotional characteristics

Use of a Job Analysis Human resource planning Recruitment and selection Training and development Job evaluation Remuneration Performance appraisal Personnel information Safety and health

Job Evaluation It is the process of analysing and assessing the various jobs systematically to ascertain their relative worth in an organization It is the jobs that are being rated not the job holders It is to establish the salary differentials

Methods of Job Evaluation Non Analytical Methods Ranking Method Job Grading Analytical Methods Point Ranking Method Factor Comparison Job Evaluation

Methods of Job Evaluation Ranking method Simplest one and the most inexpensive Evaluation committee assess the worth of each job on the basis of the title or its contents Job not broken down into factors or elements

Job grading method In the job grading method, each job is assigned a grade according to it's match with a standard description. Each job description is compared with the standard "grading" description.

JOB GRADING EXAMPLE

Job Evaluation: The Point Method List the types of jobs to be evaluated Determine the list of compensable factors like skill.efforts etc Determine the number of degrees to be allocated to each factor and prepare a suitable definition for each Assign points to each degree of each factor Select a certain number of jobs ,say 10 –15 and evaluate each in terms of the scale so constructed Design the wage structure

Job Evaluation: The Point Method Example: Software Engineer Job Description The Software Engineer designs, develops, tests and maintains one or more of our products or internal applications. The software engineer works as a member of an engineering team developing, designing, and maintaining one or more of our products or internal applications. This position reports to the appropriate Project Manager. Job Specification Bachelor's or undergraduate degree in Computer Science, Information Systems, Electrical Engineering or equivalent experience. Masters or graduate degree is desirable. Understand Intranet and Internet technologies: http, firewall.

Job Evaluation: The Point Method Develop a list of compensable factors… A set of standards the organization uses to distinguish among jobs for pay purposes Examples of commonly used compensable factors: Degree of responsibility, supervision Knowledge needed to perform the job Discretion in performing the job, independent judgment Job conditions Effort Hazard Consequence of error

Job Evaluation: The Point Method Factors - Degrees 1st 2nd 3rd 4th 5th 6th Job Knowledge 25 100 175 250 Judgment & Decision Making 10 33 55 78 Independent judgment Accountability 20 65 110 155 200 Working conditions 5 35 50 Mental 15 42 69 96 123 150

Job Evaluation: The Factor comparison Method This method determines the relative rank of the job to be evaluated in relation to the monetary scale Commonly used for white collar jobs ,executive cadre etc It is a combination of ranking and point system

Job Evaluation: The Factor comparison Method Steps Select the factors and define them clearly Mental requirements Physical requirements Skills set Working conditions Select a bench mark job ( job that is satisfactory enough ) which will serve as standard for other jobs

Job Evaluation: The Factor comparison Method Allocate wage for each key job to different factors Develop a job comparison scale and insert key jobs in them Evaluate the job in question factor by factor in relation to the bench mark job on a job comparison scale Design ,adjust and operate the wage structure

Matrix for factor comparison

PERFORMANCE LINKED PAY

WAGE PAYMENT Two methods of wage payment Time wage system Worker is paid for the amount of time spent in the factory Non variable method Wages = Number of hours worked * Rate per hour Piece wage system Worker is paid on the basis on the output of the work . He is paid according to the amount of work completed or thenumber of units turned out irrespective of the time spent Wages = Number of units produced * rate per unit

When to use time wage system ? Difficult to fix the standard time Quality of work is of utmost importance Job relates to office or clerical job Collective effort of a group of person is required Where mental work is involved Where production process is complicated and needs higher order skills

When to use piece wage system ? When methods of production are standardized and repetitive in nature Productivity of the worker s increased Job involves more physical work than mental work Work does not require personal skills of higher order Where output can be measured

Incentives Incentives are the variable component of pay where the pay is tied with some measure of individual ,group or organisational performance Incentive plans provide offer an attraction of extra payment for efficiency or more production

Advantages of incentive plans Focus employee efforts on specific performance targets Incentive compensation is directly related to operating performance It fosters team work and unit cohesiveness when payments to individuals are based on team results It is a means to reward or attract top performers

Requirements for a successful incentive plan Incentive programs should be linked to valued behaviour It should be fair enough Productivity or quality standards should be challenging but achievable Payout formulas should be simple and understandable

Types of incentive plans

Time based plans Halsey premium plan Rowan plan Emerson plan Bedeaux plan

Time based plans Halsey premium plan It is a combination of speed and time bases of payment For eg ; Standard time (S) = 12 Hrs Time taken by a worker (T) = 8 Hrs Rate of wages (R) = Rs 9 /Hr Bonus (P) = Wages for the 50 % of the time saved Total wages = TX R +50% Of (S-T) * R Total wages = 8 * 9 + 50/100 * 4 *9 =90 The percentage is fixed by the employer

Time based plans Rowan plan Is a modification of the Halsey plan Bonus is paid on the basis of the time saved For eg ; Standard time (S) = 12 Hrs Time taken by a worker (T) = 8 Hrs Rate of wages (R) = Rs 9 /Hr Total wages = T*R +(T*R *(Time saved /Std Time )) Total wages = 8 *9 +(8*9 *(4/12)) =96 Bonus will be paid at a diminishing rate if they save more than 50% of the time

Time based plans Emerson plan Guaranteed wage payment to all the workers on time rate basis In addition bonus or extra payment is suggested For Eg ; CASE 1 standard output = 80 units Actual performance = 60 units Efficiency = 75 % (Bonus =20 %) CASE 2 Actual performance = 90 units Efficiency = 112.5 % (Bonus = 30%) Bonus will be paid to workers whose efficiency is more than 66.67 % . The rate of the bonus will increase with efficiency

Time based plans Bedeaux plan Standard Bs = 10*60 =600 Standard time for a job is determined Each minute of the allowed time is called a point or B Bonus paid is 75% of the wages for time saved and the remaining 25% to the supervisor Calculation Standard Bs = 10*60 =600 Actual Bs =8*60 = 480 Rate per hour = Rs 1 Bs Saved = 120 Bonus = 75 % of Time saved +S * R Bonus = (75/100) * (120/60) *1 +8 = 9.50

References Human Resource Management ;Snell & Bohlander ,India Edition Human Resource Management Concepts and Cases ;T N Chabbra Human Resource Management: Text and Cases,K Aswathappa.