Everything you need to know about the advantages, disadvantages, benefits and limitations of job evaluation. Job evaluation is the evaluation or rating of jobs to determine their position in the job hierarchy.
The evaluation may be achieved through the assignment of points or the use of some other systematic method for essential job requirements, such as skills, experience and responsibility.
Job evaluation is not an exact science but it is a systematic way of avoiding several anomalies in wages.
Though job evaluation has these limitations yet it is very useful in evaluating the relative worth of the job. It provides a systematic study and assessment of the job and many complaints about disparity in existing wage structure are removed by this technique.
Advantages and Disadvantages of Job Evaluation: Reasons, Problems and Criticism
Advantages and Disadvantages of Job Evaluation
Job evaluation is the evaluation or rating of jobs to determine their position in the job hierarchy. The evaluation may be achieved through the assignment of points or the use of some other systematic method for essential job requirements, such as skills, experience and responsibility.
In the words of Netherlands Committee of Experts on job evaluation, “job evaluation is a method which helps to establish a justified rank order of jobs as a whole being a foundation for the setting of waves. Job evaluation is the only one of the starting points for establishing the relating differentiation of base wage rates.”
Advantage of Job Evaluation:
Job evaluation has certain advantages over other techniques of pay fixation.
(i) It is a logical and to a certain extent an objective method of ranking and grading the jobs.
(ii) It helps to fit the newly created jobs in the existing structure.
(iii) Employee grievances, doubts and complaints would be at the lower ebb as it is a systematic and objective method of wage fixation.
(iv) It eliminates some undesirable factors like in qualities in bargaining capacities of employees and employers, fluctuations in market rates etc.
(v) It satisfies the principles of fair wage, wage equity, uniformity in wages etc.
(vi) It helps to redesign the jobs for minimising wide wage differentials.
(vii) It ensures employee satisfaction about wage level and wage equity.
(viii) It also helps to redesign the jobs by reallocating the easy and difficult tasks equally among various jobs.
The following are some serious disadvantage in job evaluation technique:
(1) It is a systematic and not a scientific technique:
In rewarding the job, it lacks scientific precision because all factors cannot be measured accurately.
(2) There is no standard list of factors:
Too many factors are used in job evaluation and moreover there is no standard list of factors to be considered. Definitions of factors vary from organisation to organisation. Many researches show that the factors used may not independently be valued at all.
(3) Nature of jobs differ though they are allotted the same grade:
It presumes that jobs of equal worth will be equally attractive to all employees but in practice, it is not true. If a job offers bright prospects of rise, more people will be attracted in comparison to a job having no prospects of rise though both are equally rated by job evaluation process. Therefore, a job having no prospects of rise should offer higher wages in comparison to a job having better chance of progress.
(4) Individual merit is ignored:
There is a strong feeling among the workers that individual merit should also be rewarded. So some kind of Merit Rating Scheme has to be super-imposed upon the evaluated rates. If individual abilities are not taken into account, some workers will always try to adjust themselves elsewhere. Thus, it will increase the rate of labour turnover.
(5) Too much reliance on internal standards and wage rates in industry or region are ignored:
Job evaluation tends to be inflexible is so far as it does not give right weightage to rates prevalent in the industry or region as whole. It relies too much on internal standards and evaluation for fixing wage rates.
(6) Some of the techniques of job evaluation are not understandable by workers hence it has been opposed:
Job evaluation is regarded by the Trade unions with suspicion because it is made on certain principles and results are generally ignored. Moreover, some of the methods particularly ‘Point Method’ and ‘Factor Comparison Method’ are not easy to understand by the workers and moreover they fear that job evaluation will do away with collective bargaining.
(7) Job evaluation is no answer to all wage problems:
It does not offer any answer to wage problems because it says nothing about the absolute size of wage differentials appropriate to the evaluated job structure. It presents only the comparative worth of the job within the organisation.
(8) Limitations of evaluators also affect the technique:
Job evaluator should not be ignorant of the techniques and principles of job analysis, job classification and grading of jobs otherwise, it will affect the results of the evaluation. Moreover, if evaluator is biased to a particular job he will not allot more weightage to the job.
(9) It is unrealistic because labour market conditions are ignored:
Job evaluation is based on the assumption that wage rates can be related to the worth of a given job. It conveniently ignores the fact conditions in the labour market that have a greater impact in the fixation of wage rates; we can fix a fair wage rate by this system but not a realistic wage rate.
Though job-evaluation has these limitations yet it is very useful in evaluating the relative worth of the job. It provides a systematic study and assessment of the job and many complaints about disparity in existing wage structure are removed by this technique.
To conclude, we can say that job evaluation is not an exact science but it is a systematic way of avoiding several anomalies in wages.
Advantages and Disadvantages of Job Evaluation – To the Management and Workers:
Advantages of Job Evaluation:
If the system of job evaluation is scientific and thoroughly objective, it will give many advantages to the management and workers.
The advantages are as follows:
i. It serves as a means to establish a rational wage and salary structure which will satisfy both the workers and the management.
ii. If helps in settling disputes and removing grievances regarding individual rates of wages conveniently and satisfactorily.
iii. It helps in merit-rating, selection, training, improvement of working conditions, work simplification and fixation of incentive pay for workers.
iv. If facilitates complete and proper control on the labour costs.
v. It provides a means of justification for different rates of pay for different jobs.
vi. It provides a bias for fixing wage rates for new jobs created by the technological improvements.
vii. It simplifies wage administration by bringing about uniformity in wage rates. When applied to the whole industry, it facilitates comparison between wage rates in two different localities.
viii. Since it determines the relative value of each job, it forms a sound basis for promotion.
Disadvantages of Job Evaluation:
Inspite of the various advantages claimed for job evaluation, it is not wise on the part of the management to place too much reliance on it.
Because it suffers from certain limitations which are mentioned below:
i. Since it is not possible to measure all the factors accurately, it cannot be as scientific and precise as claimed.
ii. The validity of the findings of the job evaluation is likely to be vitiated by the mental bias of those engaged in job evaluation.
iii. It tends to be flexible because it does not place proper emphasis on the wage-rates in the industry as a whole. It is concerned mostly with internal standards and evaluation for fixing wage rates.
iv. It is a time-consuming and costly system and hence it is not suitable to small concerns.
v. It does not explain anything about the absolute size of the wage differentials appropriated to the evaluated job structure. It cannot therefore solve the wage problem correctly.
Advantages and Disadvantages of Job Evaluation – Reasons and Problems
Advantages of Job Evaluation:
A job evaluation program is useful for the following reasons:
(i) In the case of new jobs, the job evaluation often facilitates fitting them into the existing wage structure;
(ii) Job evaluation is a logical and, to some extent, an objective method of ranking jobs relative to one another. It may help in removing inequalities in existing wage structures and in maintaining sound and consistent wage differentials in a plant or industry;
(iii) The Job evaluation replaces the many accidental factors, occurring in less systematic procedures, of wage bargaining by more impersonal and objective standards, thus establishing a clear basis for negotiations.
(iv) This technique helps in removing grievances arising out of relative wages;
(v) It improves labor-management relations and workers’ morale.
(vi) The method may lead to greater uniformity in wage rates, thus simplifying wage administration;
(vii) The information gathered in the process of job description and analysis may also be used for the improvement of selection, transfer and promotion procedures on the basis of comparative job requirements.
(viii) Job evaluation replaces the many accidental factors, occurring in less systematic procedures, of wage bargaining by more impersonal and objective standards, thus establishing a clear basis for negotiations.
Disadvantages of Job Evaluation:
Irrespective of the job evaluation method used, a number of potential problems can arise.
Major problems are:
(i) Inaccurate or incomplete job data;
(ii) Negative reactions from Unions;
(iii) The need for employee understanding;
(iv) Acceptance and Support of the Evaluation Procedure.
1. Inaccurate or Incomplete Job Data:
If the information recorded in the job description is inaccurate or incomplete, the job evaluation will be inaccurate. For example, a job description may present an inflated picture of the actual job. The employees may believe that job descriptions do not reflect accurately the jobs actually performed; they will perceive the job evaluation procedures and the resulting wage and salary structure as unfair.
2. Negative Reactions, from Unions:
The attitudes of union leaders toward job evaluation may be favorable or unfavorable. In many cases it may not be supportive.
3. The Need for Employee Understanding:
Supervisors and higher management, as well as other employees, will need to understand, accept, and support the job evaluation system if it is to work.
4. Acceptance and Support of the Evaluation Procedure:
The challenge of a job evaluation program lies in selecting supervisors and other managers to participate in job evaluation committees and in obtaining their commitment of time and attention to the process. Broad participation is necessary for informed decisions and acceptance in the organization; on the other hand, large committees are expensive and sometimes unwieldy.
Advantages and Disadvantages of Job Evaluation – 5 Main Points
1. It is helpful in logical ranking of job and determining its worth.
2. It helps to improve industrial relations by reducing employee grievances arising out of wages.
3. Job evaluation information helps in selection, placement of employees.
4. It provides a clear and objective basis for wage negotiation and collective bargaining.
5. It helps in standardization of job that is same kind of job will require same kind of people in terms of qualification, skill and abilities, so that they fit in same wage and salary structure.
1. The process of job rating is to some extent, inexact because some of the factors and degrees cannot be measured with accuracy.
2. It is time consuming and expensive process.
3. Some methods of job evaluation are difficult to understand. Workers and trade unions often oppose job evaluation.
4. Job evaluation is not well suited to determine the relative worth of managerial jobs. These jobs require analytical skills, decision-making, leadership skills etc., which cannot be measured in quantitative terms.
5. It tends to be inflexible as it does not give right weightage to wage rate prevalent is the industry or region as a whole. It relies too much on internal standards and evaluation for fixing rates of wages.
An I.L.O. publication claims following advantages and disadvantages for job evaluation:
i. Job evaluation is a logical and, to some extent, an objective method of ranking jobs relative to one another. It may help in removing inequalities in existing wage structures and in maintaining sound and consistent wage differentials in a plant or industry.
ii. In the case of new jobs, the method often facilitates fitting them into the existing wage structure.
iii. The method helps in removing grievances arising out of relative wages; and it improves labour-management relations and workers’ morale. In providing a yardstick, by which workers’ complaints or claims can be judged, the method simplifies discussion of wages to be explained and justified.
iv. The method replaces many accidental factors, occurring in less systematic procedures, of wage bargaining by more impersonal and objective standards, thus establishing a clear basis for negotiations.
v. The method may lead to greater uniformity in wage rates, thus simplifying wage administration.
vi. The information collected in the process of job description and analysis may also be used for the improvement of selection, transfer and promotion procedures on the basis of comparative job requirements.
vii. Such information also reveals that workers are engaged in jobs requiring less skill and other qualities than they possess, thereby pointing to the possibility of making more efficient use of the plant’s labour.
i. Though many ways of applying the job evaluation techniques are available, rapid changes in technology and in the supply and demand of particular skills have given rise to problems of adjustment. These need to be probed.
ii. Substantial differences exist between job factors and the factors emphasised in the market. These differences are wider in cases in which the average pay offered by a company is lower than that prevalent in other companies in the same industry or in the same geographical area.
iii. A job evaluation frequently favours groups different from those which are favoured by the market. This is evident from the observations of Kerr and Fisher. They observe, “the jobs which tend to rate high as compared with the market are those of janitor, nurse and typist, while craft rates are relatively low. Weaker groups are better served by an evaluation plan than by the market; the former places the emphasis not on force but on equity.”
iv. Job factors fluctuate because of changes in production technology, information system, and division of labour and such other factors. Therefore, the evaluation of a job today is made on the basis of job factors, and does not reflect the time job value in future. In other words, continuing attention and frequent evaluation of a job are essential.
v. Higher rates of pay for some jobs at the earlier stages than other jobs or the evaluation of a higher job in the organisational hierarchy at a lower rate than another job relatively lower in the organisational hierarchy often give rise to human relations problems and lead to grievances among those holding these jobs.
vi. When job evaluation is applied for the first time in any organisation, it creates doubts and often fears in the minds of those whose jobs are being evaluated. It may also disrupt the existing social and psychological relationships.
vii. A large number of jobs are called red circle jobs. Some of these may be getting more and others less than the gate determined by job evaluation.
viii. Job evaluation takes a long time to install, requires specialised technical personnel, and may be costly.
ix. When job evaluation results in substantial changes in the existing wage structure, the possibility of implementing these changes in a relatively short period may be restricted by the financial limits within which the firm has to operate.
Job evaluation produces a ranking of jobs on which a rational and acceptable pay structure can be built.
1. It tries to assess jobs, not people.
2. The standards of job evaluation are relative, not absolute.
3. The basic information on which job evaluations are made is obtained from job analysis.
Job rating research experiments have shown again and again that the factors, mostly, included in job evaluations are not independent. Mostly they overlap. So, the weights used in many systems are subject to serious questions. At the same time and perhaps for this reason, the reliability of job rating is, often questionable. Reliability here, means the consistency with which the same jobs are given similar ranks and ratings.
Criticism of Current Job Evaluation:
Viteles has criticised the current job evaluation system with following major points:
a. Job evaluation gives a false sense of accuracy and there is a great deal of chaos yet to be eliminated by careful research.
b. Too many rating factors are used. These should never be more than five or ten.
c. Definitions of factors and degrees are not so accurately made as they could be in terms of action patterns and objective situations.
d. Too wide a range of factors is assumed and too many degrees are defined.
e. Too great a controversy is raised over method and not enough attention paid to results.
f. Mental set of ratters is allowed to influence results.
g. Since workers who feel that they are paid on the basis of merit will tend to be happier and more productive than those who have reason to argue the wage scale, more job evaluation is needed but it should be a better job evaluation and might be made better if common-sense and a due regard for the scientific method were followed.
Advantages and Disadvantages of Job Evaluation
Job evaluation process is a valuable tool in the hands of management by which a rational and consistent (internal and external) wage and salary structure can be evolved. It helps in maintaining harmonious relations between labour and management since it tends to eliminate wage inequalities within the organization and the industry.
Advantages of Job Evaluation
The various important advantages claimed for job evaluation may be stated as follows:
(i) Job evaluation is a logical and objective method of ranking jobs relative to one another that helps in eliminating the inequalities in existing wage structures and in developing and maintaining consistent wage differentials within an organization or industry.
(ii) In the case of new jobs, the method often facilitates fitting them into existing wage structure.
(iii) It helps in reducing or minimizing employee grievances arising out of relative wages and is likely to improve industrial relations.
(iv) It provides a clear basis for union-management negotiations concerning internal wage structures and differentials.
(v) It facilitates wage/salary administration by bringing about uniformity in wage rates.
(vi) Since all job evaluation lean heavily on job analysis and job descriptions the information thus obtained may be used for the improvement of selection, transfer and promotion procedures on the basis of comparative job requirements and it may thus help management of an organization to make more efficient utilization of its work force.
Thus, the importance of job evaluation lies in the accomplishment of the purpose.
Disadvantages of Job Evaluation:
However, there are certain disadvantages:
(i) Job evaluation system takes a long time to be adequately implemented and it not only requires specialized and trained personnel but it may also be costly.
(ii) Although there are many ways of applying job evaluation in a flexible manner, rapid changes in technology and in the supply of and demand for particular skills raise problems of adjustment that may need further study.
(iii) Evaluation of a job currently made on the basis of job factors (such as skills, responsibilities, difficulties, hardships, inconvenience unpleasantness etc.) does not reflect the value and worth of the job in future because job factors fluctuate on account of changes in technology, information systems and other relevant factors.
(iv) Job evaluation does not provide a complete answer to the wage problem. It has nothing to say about the absolute wage level and little about the absolute size of the wage differentials appropriated to the evaluated job structure.
(v) In particular, the process of job rating is to some extent arbitrary because few of the factors and degrees can be measured with great accuracy.
(vi) Sufficient acceptance of a job evaluation plan and general agreement on its essential features may not be achieved.
(vii) Trade unions often regard the method with suspicion and in some cases with hostility. They fear that job evaluation will do away with collective bargaining for settlement of wages.
In measuring the relative value of jobs, job evaluation requires the subjective, though systematic, exercise of judgement in identifying and assessing differences between jobs. It only works effectively if those involved believe it to be fair.