Page 131 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Unit 6: Compensation and Rewards

(iii) A proper control of individual rate ranges; and Notes

(iv) The conduct of wage surveys to provide the necessary information about the
intraplant ranges.
(v) The importance of factors, other than job contents, in wage rate determination
must be recognised and taken into consideration while launching a job evaluation
programme.
(e) Before launching a job evaluation programme certain issues should be decided before
hand. They are:
(i) Which category of employees is to be covered and upto what range?
(ii) Who will evaluate a job-outside consultants or trade analysts or the personnel of
the personnel department?
(iii) How will the employees be consulted in regard to the method of putting the
programme through?
(iv) Does a proper atmosphere exist for launching of the programme?
Uses of Job Evaluation

Some form of job evaluation is invariably a part of a formal wage and salary programme.
Job evaluation is concerned with assessing the value of one job in relation to another for
it is only when each job has been properly evaluated that a sound wage structure can be
built.

According to Sibson, job evaluation process plays a key role in wage and salary administration
in the following ways:
(a) Job evaluation is the most effective means of determining internal pay relationships
for most types of jobs.
(b) It can be used as an instrument for implementing the company’s basic pay policies.
(c) Equitable base-pay relationships set by job evaluation serve as a foundation for
incentive or bonus plans. Through job evaluation, the company is able to establish the
standard, job value upon which extra incentive earnings, bonus payments or merit
increases can be established.
(d) Job evaluation provides a reasonable basis for personnel moves. Unless relative classes
of jobs are established in the first place, managers will not know whether a personnel
move represents a promotion or a demotion or a transfer.
(e) Useful controls over wage and salary costs can be greatly aided by job evaluation.
(f) Job evaluation provides a realistic foundation for gearing company pay scales to pay
scales of competing companies. This, in turn, gives reasonable assurance that the
company will get the numbers and types of persons needed to operate the business
and at the same time, maintain wage costs at a competitive level.
(g) It assists managers in meeting day-to-day problems. This in turn contributes to reduction
of employee grievances, to higher employee productivity through hi morale and to
fewer turnovers.

6.2 Wage and Salary Administration

Services rendered by individuals to organizations have to be equally paid for this compensation
generally comprises cash payments which include wages, bonus, and shared profits. Good
compensation plans have a salutary effect on the employees. They are happier in their work,

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