Point Rating technique is the most widely used system of job evaluation. The method evaluates the compensable factors of each job. It involves a more detailed, quantitative and analytical approach to the measurement of job work. Under this method of job evaluation, jobs are broke down based on various identifiable factors such as skill, effort, training, knowledge, hazards, responsibilities and so on. Thereafter, points are allocated to each of these factors. Weights are given to factors depending on their importance to perform the job. Points so allocated to various factors of a job are then summed. Then, the jobs with similar total of points are placed in similar pay grades. The sum of points gives an index of the relativeContinue reading
Compensation Management
Ranking Method of Job Evaluation
Ranking Method is the simplest form of job evaluation method. The method involves ranking each job relative to all other jobs, usually based on some overall factor like ‘job difficulty’. Each job as a whole is compared with other and this comparison of jobs goes on until all the jobs have been evaluated and ranked. All jobs are ranked in the order of their importance from the simplest to the hardest or from the highest the lowest. The importance of order of job is judged in terms of duties, responsibilities sand demands on the job holder. The following steps are involved in ranking jobs. Obtain job information – The first step of ranking method of job evaluation is the jobContinue reading
Factors of Job Evaluation
The criteria for job evaluation is the consideration of various factors, which analyse a position in relation to the skills and experience required for competent performance, the demands made on the job and the overall structure and responsibility/accountability involved. In some cases minor changes to the wording are used to define factors and levels made in order to better align the job evaluation methodology with the client’s culture and environment. Where this is done, great care is taken to ensure inter-organisation consistency is not compromised. The primary factor in determining compensation is an evaluation of work performed. The internal worth of a job is evaluated based upon factors like – Know-How, Problem Solving, Accountability, Education, Experience, Complexity involved in theContinue reading
Practical Problems in Using Job Evaluation Technique
Job evaluation is a technique used to determine the value of each job in relation to all jobs within the organization. Its main objective is to determine the relative worth of different jobs in an organization to serve as a basis for developing rational wages and salary structure. Like any other technique of human resource management, job evaluation is not free from certain shortcomings and limitations. Various practical problems in using job evaluation technique may be grouped into two categories: technical and operational. 1. Technical Problems There are some technical problems involved in effective job evaluation which are of the following nature. Job evaluation establishes hierarchy of jobs based on their worth. Though there are various methods developed for thisContinue reading
Executive Compensation – Salaries and Compensation for Management
Executive employees, such as chief executive officers (CEOs), chief financial officers (CFOs), company presidents, and other upper level managers are often compensated differently than those at lower levels of an organization. Executive compensation consists of base salary, bonuses, long-term incentives, benefits, and perquisites. For the higher management, salaries are influenced by the size of a company, performance of the company, by the specific industry, and in party by the contribution of the incumbent to the process of decision-making. The more profitable the organization is the firm, the better is the compensation paid to the executives. Executive Compensation An executive is a person who is a member of the highest decision-making group in an organization. Chief executive officer (CEO), full-time directorsContinue reading
Concepts of Minimum Wage, Fair Wage and Living Wage
According to economic theory, wages are defined broadly as any economic compensation paid by the employer to his laborers under some contract for the services rendered by them. In its actual sense which is prevalent in the practice, wages are paid to workers which include basic wages and other allowances which are linked with the wages like dearness allowances, etc. Traditionally, in the absence of any bargaining power possessed by laborers, they did not have any say in the determination of wages paid to them. In the Indian context, soon after the independence, Government of India set up a Committee on Fair Wages in 1948 which has defined various concepts of wages which govern the wage structure in the countryContinue reading