Scribd
Upload
7 views5 pages

Unit 4 Part 1 Notes HRM

The document outlines the concept of job evaluation, detailing its purpose, scope, and various techniques such as point rating, ranking, job grading, and factor comparison methods. It also discusses compensation administration, highlighting its objectives including attracting and retaining talent, motivating employees, and maintaining salary equity. Additionally, it covers wage policy in India, emphasizing minimum, fair, and living wages, along with guidelines for a national wage system.

Uploaded by

Webnovel 1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
7 views5 pages

Unit 4 Part 1 Notes HRM

The document outlines the concept of job evaluation, detailing its purpose, scope, and various techniques such as point rating, ranking, job grading, and factor comparison methods. It also discusses compensation administration, highlighting its objectives including attracting and retaining talent, motivating employees, and maintaining salary equity. Additionally, it covers wage policy in India, emphasizing minimum, fair, and living wages, along with guidelines for a national wage system.

Uploaded by

Webnovel 1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

Unit 4 HRM Notes

Job Evaluation

According to the Bureau of Labor Statistics (USA), “Job evaluation is the evaluation or
rating of jobs to determine their positions in the job hierarchy. The evaluation may be achieved
through assignment of points or use of some other systematic method for essential job
requirements such as skill, experience and responsibility”.

Scope of Job Evaluation


The job evaluation is done for the purpose of wage and salary differentials, demand for and
supply of labor, ability to pay, industrial parity, collective bargaining and the like.

Process of Job Evaluation:


Preparation of a Job Evaluation Plan

Job Analysis

Job Description & Job Specification

Selection of job dimensions

Classification of jobs

Implementation of the evaluation

Maintenance

Techniques of Job Evaluation:

Quantitative Method Non Quantitative Method

❖ Point rating method Ranking Method


❖ Factor comparison method Job Classification/ Job Grading
❖ Decision Band Method

Ranking Method:
Ranking Method Ranking is the method in which the jobs in an organisation are assessed based
on the knowledge,skills,effort and other job dimensions associated with each job. Ranking
involves preparation of brief job descriptions and assigning ranks to the jobs in accordance
with their worth in the organization.

Job Grading:
In this method of job evaluation, the jobs are classified and graded based on their
significance and their worth to the organization; the jobs at various levels in an organization
are placed under different grades, which are clearly defined. Grades are formulated on the basis
of the nature of the tasks and responsibilities of the jobs. For e.g.:-a grade may comprise jobs
like Financial Accountants, Management Accountants, Cost Accountants.
Point rating method:
The point method or the point rating method is one of the most widely used methods of job
evaluation. In this method, a quantitative point scale is developed to evaluate the jobs. The
number of scales to be used and other aspects of implementation are determined by the job
evaluation analyst or the human resource function.

Factor comparison method:


It is based on the principles of point rating and ranking. Steps involved- Determining &
defining specific factors(4 to 7) Identify key or bench mark jobs Comparison and ranking of
various factors upon their importance Assigning monetary values and adding up to pay of the
bench mark job and evaluation.

Decision Band Method:


The basic premise of DBM is that the value of a job depends on its decision-making
requirements’. Decision-making is logical and equitable basis for comparing jobs because all
jobs involved decision-making on all levels.
Compensation Administration:
Compensation administration is a segment of management or human resource
management focusing on planning, organizing, and controlling the direct and indirect
payments employees receive for the work they perform.

Nature

Objectives of compensation
1. Attracting the talent: - It is widely accepted that human resources of an organization give
it an edge over its competitors by offering a well designed pay package.
2. Retaining the talent:- Now a day’s employee do not hitch leaving one job and joining
other if they offered better pay package. Therefore organization has to design
compensation systems that talent and skill not only get attracted but also stay with the
organization.
3. Motivating the employee:- The employees may have talent but they will not be motivated
to use their talent unless they know that they will be rewarded duly for their contribution
towards the organizational objectives.
4. Maintaing salary equity among employees
5. Improving union-management relations

Components of pay structure in India


• Wage and salary:- Wages represents hourly rates of pay, and salary refers to the monthly
rate of pay, irrespective of the number of hours put in by an employee. Wages and salaries
are subject to the annual increments. They differ from employee, and depend upon the
native of job, seniority and merits.
• Incentives:- Also called „payment by results‟, incentives are paid in addition to wages
and salaries
• Fringe benefits:- These include such employee benefits as provident fund, gravity, medical
care, hospitalization, accident relief, health and group insurance, canteen etc.
• Perquisites:- These are allowed to executives and include company car, club membership,
paid holiday, furnished house etc. perquisites are offer to retain competent executives.

Wage Policy in India

The term ‘wage policy’ refers to all systematic efforts of the Government in relation to a
national wage and salary system, The policy lays down guidelines concerning the level and
structure of wages.

• Equal pay for equal work


• Living wages for all workers so that they lead a decent life
• Payment of wages on appointed dates without unauthorized deductions
• Resolving wage related issues through collective bargaining
• The capacity to pay (according to Supreme Court ruling- ‘an employer who cannot pay
minimum wages has no right to exist)
• Determining fair wages over and above minimum wages with due regards to (i) the
productivity of labour (ii) the prevailing level of wages (iii) the level of national income and
distribution (iv) the place of industry in the economy of the company.

Minimum Wages, Fair Wages & Living Wages


While evolving, wage policy, three concepts of wages, viz, i)minimum wages, ii) fair wages,
iii) living wages are generally considered. These are broadly based on the needs of workers,
capacity of the employee to pay, & the general economic conditions prevailing in a country.

Minimum Wage
Minimum wage is one which provides not merely for bare sustenance of life, but also for the
preservation of the
efficiency of worker. For this purpose, the minimum wage must also provide for some measure
of education,
medical requirements & amenities.

Fair Wage
Fair wage is understood in two ways. In a narrow sense, wage is fair if it is equal to the rate
prevailing in the same trade & in the neighborhood for similar work. In a wider sense, it will
be fair if it is equal to the predominant rate for similar work throughout the country.

Living Wage
Living wage is a step higher than fair wage. Living wage may be described as one which would
enable the wage earner to provide for himself/herself & his/her family not only the bare
essentials of life like food, clothing, & shelter, but a measure of frugal comfort including
education for children; protection against ill
health; requirements of essential social needs; &/or measure of insurance against the
more important misfortunes including old age.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy