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IMPORTANCE OF JOB EVALUATION


IMPORTANCE OF JOB EVALUATION

           Job Evaluation involves determination of relative worth of each job for the purpose of establishing wage and salary differentials. Relative worth is determined mainly on the basis of Job Description and Job Specification only.

1. Reduce Income Problem/ Issues: In the words of Bryan Livy, “Job evaluation seeks to highlights significant problem between units of work on a comparative basis and so produce a more equitable distribution of income within an organisation than might be obtained by more arbitrary methods.”

2. Standardization:  The process of determining the salary differentials for different jobs become standardized through job evaluation. This helps in bringing uniformity into salary structure.

3. Useful in Collective Bargaining: According to Edwin B. Flippo “Job evaluation and collective bargaining are not incompatible; they can and do exist within the same organisation. Job evaluation would reduce the area of collective bargaining by systematizing the determination of internal consistency, which bargaining by systematizing the determination of internal consistency, which is concerned with proper wage differentials. Collective bargaining must still work to attain the objective of external consistency, the raising or lowering of the entire wage structure. Job evaluation should determine the shape of the wage structure and collective bargaining the location of the entire structure as a unit.”

4. Specialization: Because of division of labour and thereby specialization, a large number of enterprises have got hundred jobs and many employees to perform them. Therefore, an attempt should be made to define a job and thereby fix salaries for it. This is possible only through job evaluation.


5. Implement a pay structure: Once the job evaluation is complete, its data become the nucleus for the development of the organisation’s pay structure. It is very useful tool for the very organisations. It divided the employee’s salary according to their role which is they done in the organisation.

6. Contingency of new jobs:  Through job evaluation, one can understand the relative value of new jobs in a concern.  

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