job evaluation

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Job Evaluation

The process of determining how valuable a position is to a company. It helps a company decide the extent to which a job produces revenue, improves efficiency or adds value in some other way. A job evaluation does not judge the person in a position, but the position itself. It helps a company make wage, salary and/or benefit decisions for the jobs it creates.
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job evaluation

a set of procedures to assess the relative worth of groups of jobs in an organization so as to place them in a rank order. This can then provide the basis of a grading and pay structure. Job evaluation is more widely used for assessing managerial and white-collar rather than blue-collar jobs but its use amongst the latter has been growing steadily in recent years. The primary advantage of job evaluation is that it puts differences in rates of pay between jobs on a systematic footing. By so doing the rationale for pay differences can be clearly shown. It is generally recommended that only broadly similar jobs (job family) be evaluated in a particular exercise, i.e. manual and managerial jobs are too different to be meaningfully evaluated together. It is also recommended that trade union representatives be fully involved (where TRADE UNIONS are present) in the evaluation to ensure that the eventual ranking is accepted as fair.

There are a number of different ways of conducting job evaluation:

  1. Non-analytic: these approaches do not break jobs into constituent factors but compare ‘whole'jobs.
    1. job ranking. Here jobs are simply placed in an order on the basis of the content of job description that is felt to be fair by the evaluators.
    2. paired comparisons. Here each job is compared with each other job and points are awarded for the comparative importance in each case. The total number of points for each job provides the basis for the rank order.
    3. job classification. In this case the number and definition of grades are produced first, and then jobs are allocated to these grades according to the degree of ‘fit'between job description and grade definition.
  2. Analytic: in approaches of this sort jobs are broken down into their core factors, such as degree of skill, responsibility, etc. and are then compared on the basis of these.
    1. factor comparison. Various facets of jobs, such as skill and responsibility, are considered and each is given a ranking. Jobs are then compared, factor by factor, to provide a grading structure.
    2. points rating. The factors in each job are given a points score based on the importance of the factor relative to the others. The points for each factor are totalled for each job to produce a final rank order.
    3. Hay-MSL Evaluation. This is a variant of the points rating system used for evaluating managerial jobs. The amount of knowledge, problem-solving and responsibility involved in each job is assessed, and each factor compared against the other to produce a final ranking.

The analytic approaches are plainly more rigorous than the non-analytic. Even these, however, cannot eliminate subjectivity Job evaluators have to make decisions on the scores for each factor that can never be fully objective. Any score will inevitably involve an element of judgement. However, analytic job evaluation does enable jobs to be compared in a systematic and consistent way Now that equal pay for men and women should be based on work of equal value, job evaluation free of sex bias is especially important. Those operating job evaluation schemes have to ensure that sexual discrimination does not enter into the ranking of jobs. The courts have decided that only analytic schemes may be used as a defence in an equal pay for equal value claim (see DISCRIMINATION). Where such a claim is made, the techniques of job evaluation are used to assess whether it is justified.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
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