Job evaluation process should change with the technology. As the degree of automation is increased, job evaluation should give more weight to higher education, greater responsibility, and higher mental efforts. Allowance of work includes the exercise of discretion, initiative, and judgment. Thus, apparently, the time span of discretion is weighed in respect of responsibility, which is common for all the jobs. The essence of this approach is those employees who enjoy equal time span of discretion should be equally rewarded.
point rating system
A) Selection of job factor: It takes into account the various key factors that will tell the overall performance of a job. In spite of several job factors only one factor, ‘time-span of discretion,’ is used, which means the longest period during which employees are allowed to work without any supervision by superiors.
B) Construction of yardstick: the decision is to be taken that if the total point in a system is 1,000, then what should be the percentage contribution of each factor. The determination of this will depend upon the nature of the organization, i.e., an enterprise with high automation technology should assign more points for responsibility since the manual skill is translated into machine skill. But generally, skill is given more weight than responsibility, efforts and working conditions. If we decide 1,000 points for a system.
C) Wage Survey: The main purpose of wage survey is to find out the fair rate for various jobs to establish the entire fee structure. Selection of key jobs, whose duties are defined, not unstable and mostly represent all levels of jobs’ worth, is the very first step in building a wage survey. For the salary survey, two types of samples are needed. First, the sample of key jobs and second, a sample of firms in the labor market. Jobs require different personnel regarding skill, ability, etc. and thus it varies from local to national level. Selection of the sample of firms should be from those firms which operate under similar market conditions.
e) Designing the wage structure:
Factors affecting the designing of the wage structure are:
i. Labour market conditions: If the supply of labor is higher than demand. The wage would be relatively small.
ii. The Economic condition of the country: If the standard of living is high, it calls for the higher wage.
iii. Wage structure of other firms: Wage structure of other companies in the same industry directly affects the company’s wage structure.
iv. Bargaining power of trade unions: Sometimes, even though the competitors pay relatively higher wages, due to the weak bargaining power of the trade union, management may settle wage at a relatively low rate.