Job Evaluation in an Organization

1. Compare and contrast two job evaluation methods discussed in this module. Which method (if any) do you recommend for Jeans Inc.? Why?

Job evaluation offers a methodological approach for an organization to rank specific job titles. The job evaluation methods that may be considered by an organization include the ranking method and classification method. In the ranking method of job evaluation, the traditional hierarchy in an organization is considered. The ranking approach entails ranking of jobs in the order of the duties and power. In this case, the jobs placed on higher levels of the hierarchy are considered the most important to an organization. The topmost job has the utmost authority in the organization. As one goes down the hierarchy, the jobs’ specialization reduces and jobs become increasingly less valuable or expanded. Salaries levels are graded following the order of importance to the company. On the other hand, the classification methods seek to come up with a grading system for every job. A job position may be considered as generic and require an employee to have specific duties for certain jobs. The classification approach uses a pre-determined yardstick, unlike the ranking systems. The yardstick measures jobs as a whole and a body specifically set for this role develop the job categories. A job grade is defined as a group of different jobs of similar difficulty or needing similar skills to perform. The factors considered for each job grade may include difficulty and variety of work, supervision required, level of judgment exhibited, originality exercised, accompanying originality, nature and need for interpersonal work relationship, responsibility, as well as, experience needed and knowledge required.

• Should Jeans Inc. set up a formal salary structure based on a complete job evaluation? Why or why not?

Job evaluation mainly seeks to compare all the jobs in the organizations against each other to develop a rank order. In this case, jobs are considered against the same criteria in each case to achieve consistency. The job evaluation is not only effective for big organizations but also bound to assist small organizations, especially in setting pay and status (Chaneta, 2013). Jeans Inc. would benefit from a formal job evaluation system as it would provide an opportunity to adjust salary structure. Job evaluation is bound to assist the organization to recognize the high-achieving employees and improve company productivity. A formal structure that would result from the process of job evaluation would facilitate a transparent budgeting process and thereby contribute to enhancing efficiency at Jeans Inc.

• Is the policy of paying 10% more than the prevailing rates a sound one? If so, how could it be determined? If not, what do you recommend?

The policy adopted at Jeans Inc where the pay level is set at 10% higher than the prevailing rate may be considered appropriate. This is because it represents an effective means to improve job satisfaction and reduce turnover rates. The soundness of this policy may be established by determining the turnover rate at the company and comparing that with the average industry level. The organization needs to ensure that the extra costs are not just a mere expense to the organization, instead they should ensure that this matches with the job performance of a different organization.

• What would you do now with respect to a payment plan process at Jeans Inc.? Why?

Jeans Inc. should put in place a system for job evaluation to guide its pay plan process. This will entail the consideration of the jobs at the organization, establish individual roles, and departments. Jeans Inc. needs to establish competitive pay plans, which offers opportunities for employees across the organization, an opportunity to earn variable performance-driven incentives for attaining individual and organization goals (Gordon & Kaswin, 2010). Jeans Inc. needs to establish a framework for compensation management. This aims at creating a positive employment relationship and manage the performance of the individual and organization performance (Rafique, Qureshi, Pirzada, Badara, & Shahzadi, 2015).

References

Chaneta, I. (2014). Effects of job evaluation on decisions involving pay equity. Asian Social Science, 10(4), 145.

Gordon, A. A., & Kaswin, J. L. (2010). Effective employee incentive plans: Features and implementation processes. Cornell University ILR School. Retrieved from https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1011&context=chrr

Sidra Rafique, M. M. (2015). Role of Compensation Management in Balancing the Employees Relationship. Journal of Resources Development and Management, 8(1), 27.