Introduction
Job evaluation is a process conducted to rank jobs based on the attached value. The practice is usually used to promote equitable reward management. The purpose of job evaluation is to determine the criteria for the allocation of tasks. It also ensures the development of different payment structures by comparing the relative similarities and differences between their content and worth. The emergence of the active application of job evaluation methods dates back to the twentieth century. It gained broad application, particularly in the private sector during the Second World War in response to the National War Labour Board. This state of affairs gave room for wage increment to revert the effects of unfairness on the payment structures of the time. Job evaluation seeks to eliminate inequities through the procedural determination of the relative worth of jobs in an organization to ensure fair reward management. This essay examines job evaluation by providing an insight into the appropriate approach applicable to the Strand Housing Company to determine equitable payment schemes and reward standards that foster fairness in the management of personnel.
Objectives of Job Evaluation for Strand Housing
Job evaluation takes care of numerous issues regarding the organization’s tasks and responsibilities that are assigned to different employees. It is a systematic process of analyzing and assessing different tasks in the organization following set standards. It seeks to bring about an understanding of the value of the employees. Job evaluation aims at executing three important activities including job description, specification, and employee qualifications (Buchan & Ball 2011). The practice is paramount to the placement of employees in the appropriate job positions where they can freely exercise their expertise. Secondly, the roles and requirements of the job are compared with others in the organization. Thirdly, job evaluation is meant to eliminate the chances of wage discrimination as each job attracts a reward and pay package based on its worth. It is the process that determines the ranking of different jobs in the hierarchy of the organization (Buchan & Ball 2011). The employees are ranked based on their skills and level of experience that has a significant influence on their competence. The hierarchy of jobs and different tasks in the organization is obtained through the process of job assessment. It is important to note that the placement of employees in the right job positions matched with their competencies and career goals heightens the degree of achieving the organizational objectives (Buchan & Ball 2011). Inappropriate job evaluation can confuse roles thereby derailing the accomplishment of the performance goals both at the individual and organizational levels.
Issues Subject to Discussion for the Strand Housing Company
Attraction and Retention
One of the most critical issues for the Strand Housing Company is the ability to attract and retain the talented and highly skilled employees at all levels in the organization. The aging workforce in many organizations has led to increased competition in the labor market due to the creation of an experience gap. The Strand Hosting Company seeks to overcome the competition by acquiring and retaining talented people. To achieve this particular objective, the organization is planning to adopt a proactive job evaluation that will ensure internal job equity. Job ranking will be based on the prevailing market rates (Sȋrbu & Pintea 2014).
Determination of Rates
To address the inconsistent terms and conditions of employment at the Strand Housing Company, the evaluation strategy seeks to set various rates of employee rewards based on the status and ranking of the available jobs. The organization will adopt market rates to foster equity in the way employees receive rewards. This situation will also avoid unfair disbursement of employee salaries (Coughlan, Moolman, & Haarhoff 2014). Market rates are determined by the prevailing market forces including the cost of living and competitiveness. This issue will ensure equity and eliminate bias and discriminative payment practices in Strand Housing. Because employees came from different organizations with different pay structures, the organization acknowledges the need to determine a common pay structure for all its employees to enhance equity. In this regard, the job evaluation will also create an avenue for establishing balanced in payment rates (Coughlan, Moolman, & Haarhoff 2014).
Internal and External Equity
Employee benefits and recognition are important matters that are greatly influenced by micro and macro pay structures and rates. Leonard (2011) reveals that internal equity defines the relationship between the pay of an employee with that of others in the same organization. Internal equity is the fundamental determinant for developing and managing recognition and compensation programs (Leonard 2011). This concept is broadly implemented in both the private and public organization domains. Also, internal equity problems are analyzed through job evaluation in which solutions are determined. The employees for Strand Housing come from diverse organizations where payment structures are inevitably different. Job evaluation will establish an internal equity plan to establish a common basis for ranking jobs in the organization, thus, eliminating the differences that currently exist in the mind-set of the employees due to their diverse backgrounds (Leonard 2011).
On the other hand, external equity determines the pay equity of the workforce about the prevailing market rates (Grabner & Moers 2013). The external equity is evaluated through market surveys that seek to compare the benchmark jobs with the current external environment in a bid to establish a competitive position. It is worth noting that external equity is done after a proper establishment of the internal equity to develop a comparison framework about the external market perspective (Witte 2011). This process ensures that a competitive position is realized whereby the organization balances the workforce characteristics with the market requirements (Kutlu, Ekmekçioğlu, & Kahraman 2013).
Accountability for Job Evaluation
According to Witte (2011), accountability is paramount to job evaluation. The senior departments must embrace integrity during the job evaluation system. Managers and supervisors exhibit reliability through how they manage expectations and draw job descriptions. To ensure accountability managers should exercise promptness, objectivity, and collaboration as well as engagement of employees. In this regard, it is important to provide training and establish robust communication procedures among all the stakeholders in the job evaluation process (Witte 2011).
Job Descriptions and Benchmarks
The abovementioned tasks are deemed very important in the realization of an apt job evaluation process. Substantial literature reveals that the task is burdensome and time-consuming. It can also create a political mayhem in an organization. Sometimes, it can be difficult for supervisors and management to devise the best approaches to capturing the responsibilities, scope, and impact of a position (Coughlan, Moolman, & Haarhoff 2014). Establishing the most appropriate ways of managing expectations is a difficult task for managers. Strand housing acknowledges the role of the job description and uses benchmarks and sample job descriptions including factual materials to enhance comprehension of the process for all stakeholders.
Other issues fall out of the panel’s mandate for the organization including career mobility and strategies for addressing market pressures. Career mobility in the organization is a factor that is beyond control, especially in the short-run. However, Strand Housing focuses on mobility in the different departments and units rather than the organization as a whole (Coughlan, Moolman, & Haarhoff 2014). The organization proposes developing a culture of departmental career switch culture as we aim at attaining high levels of talent retention. This concept will reduce the loss of employees that results from monotony and fatigue of serving similar roles for a long period in the organization. A robust career development culture within the Strand Housing is highly recommended.
Market forces are handled through compensation frameworks and procedures besides market enhancements. The Strand Housing Association intends to apply a robust process in a bid to address matters concerning recruitment and retention of the talented workforce. This goal can be achieved through establishing a reform of the human resources services strategic plans in consultation with the board of directors and all constituent stakeholders. Market supplements are vital methods of addressing recruitment and retention challenges as the organization seeks to achieve external equity without undermining internal equity. The reward and recognition program for Strand Housing needs a reform to avoid the pressure that can result from demand for employee appraisal in cases where employees exhibit exceptional performance. Recognition can foster rejuvenation of employee commitment besides enhancing innovation. The chart below sums up the factor plan for evaluating job relevance (Kutlu, Ekmekçioğlu, & Kahraman 2013).
Job Evaluation Principles
Job evaluation is done within several principles that act as guiding factors to an effective process to attain the abovementioned objectives. According to Kutlu, Ekmekçioğlu, & Kahraman (2013), job evaluation involves the rating of the performance tasks rather than the employees themselves. Various characteristics of the job are assessed to determine its rating. The elements chosen for job rating should clearly be understood by the concerned stakeholders to avoid instances of wrangles or any feeling of discrimination among the employees. The elements should be defined explicitly and selected appropriately. The affected stakeholders including both employees and the managers should be well educated on the program to foster a smooth process and mutual understanding. The job evaluation process should be inclusive. It should involve all the parties concerned such as the supervisors in the process to create an extended understanding of reward and compensation cases when they arise. Managers who were not involved in the job evaluation process cannot help during the rewarding of employees due to the lack of a common understanding of the principles and the program utilized. The discussion should entail the rating of jobs but not assigning monetary values of the jobs. This principle helps to create an understanding between supervisors and the employees on the aim of job evaluation. Too many wages should not be established in the process.
Approaches to Job Evaluation Process
The job evaluation process seeks to answer several questions including which jobs to be evaluated, who should evaluate the jobs, what training does the evaluation requirements, how much time is needed, what criteria should be adopted and what methods of job evaluation appropriately suit the current organization’s issues. Job evaluation approaches fall into two major categories namely analytical and non-analytical methods. Analytical approaches include point method and factor comparison, whilst non-analytical methods include ranking method, job grading, and banding (Murovec 2015; Kutlu, Ekmekçioğlu, & Kahraman 2013).
Analytical Job Evaluation Methods
Point Factor Method
This method entails several factors that pertain to the selection, job structure, and allocation scores among others (Kutlu, Ekmekçioğlu, & Kahraman 2013). The kind of job depends on several factors that are defined by skills, experience, and interest among others. According to Murovec (2015), elements that are taken into account during job selection are categorized into practice, efforts, accountability, and the nature of work. Other factors such as the education level, expertise, and enthusiasm of the employee are considered in the point factor method (Murovec 2015). Effort based factors entail physical demand and virtual demand whilst on the part of the responsibility, accountability for the process, product or materials handling, and safety responsibility are vital for this approach. Factors regarding job conditions include working conditions and hazards in the workplace (Murovec 2015; Kutlu, Ekmekçioğlu, & Kahraman 2013).
Factor Comparison Method
This approach to job assessment uses analytical tools to gauge the suitability of employees in their relevant positions in an organization. It involves a choice of five elements that apply to all kinds of jobs available. This approach then allows for each factor to be ranked individually about other jobs. For example, careers in the Strand Housing Association can be assessed using a similar education level besides the physical requirements. Next, the accrued scores are aligned with each of the measured factors. Finally, the cumulative sum of the scores is determined to know the value of the particular job under evaluation (Kutlu, Ekmekçioğlu, & Kahraman 2013).
Non-Analytical Methods
Non-analytical approached to job evaluation entail grouping and grading of jobs depending on factors such as skills, experience, and suitability of the employees among others. The ranking method is a simple and less expensive evaluation approach. In contrast with the factor comparison approach, the ranking does not break down each job into factors or elements. A position of the job is determined through a comparison with others in the organization. Job ranking is the most straightforward job evaluation approach as jobs are ranked in terms of the degree of value they have ion an organization. Jobs that are deemed more valuable are grouped higher in the hierarchy as compared to the ones assumed less worth. This approach has been criticized as it promotes subjectivity as it is hard to measure jobs without breaking them down into factors.
The banding approach is employed by grouping jobs together based on common characteristics. The qualitative technique is used to assess job requirements or elements that promote occupational health and safety (Kutlu, Ekmekçioğlu, & Kahraman 2013). It also seeks to identify areas that need employee motivation and full engagement with a view of ensuring their satisfaction. This approach is easy to implement and allows for organizational flexibility. However, banding can evoke inequity perceptions among employees (Kutlu, Ekmekçioğlu, & Kahraman 2013).
The classification approach (Job-grading method) use written standards as the basis for valuing jobs. The standards form a hierarchical level whereby jobs occupy positions that tally with the standards of that position. The classification levels are determined by several factors that a job must meet to occupy. The factors are normally blended to form unitary standards for each level. This approach boasts of easy steps of slotting jobs into the levels besides the fact that the levels have face validity to employees. The shortcoming of classification is that it creates status hierarchies in an organization that can hamper communication efforts due to superiority and inferiority perceptions between employees at different levels (Coughlan, Moolman, & Haarhoff 2014).
Applying the Point Factor Approach in Strand Housing Association Case
Justification for choosing this approach
In this case, the point factor approach is the most effective job evaluation to apply as the numbers of jobs are not too many. The approach is associated with high degrees of equity, thus, applying it in our case will align with the organization’s strategic goals of enhancing fairness and competitive practice. This method requires the evaluators to identify the compensable factors that are broken down into degrees. The factors are thoroughly examined to gauge their levels of complexity. Each factor is aligned with its corresponding point. Scores are allocated to the jobs for the individual factors depending on how much of that factor reflects on the job. The advantage of this approach is that it gives jobs and ordered importance depending on the number of points gained. This fact justifies the different pay packages rewarded for the jobs; hence, there is enhancement of equity. It involves employee participation to encourage progressive activity towards the accomplishment of production goals. This part presents the steps followed in the point factor approach to job evaluation.
Step One: Select the job cluster and the jobs subject.t to evaluation. This stage is the first and it involves presenting all the jobs that are subject to evaluation. The jobs can also indicate the number of employees affected by each cluster. The job committee can also table the issues that caused the initiation of the evaluation program. These issues are the reasons behind the job evaluation program (Kutlu, Ekmekçioğlu, & Kahraman 2013).
Step Two: Input job information. In this stage, job descriptions and specifications are prepared.
Step Three: Select Compensable Factors. Usually, the number of factors considered to fit in the point factor method is five for one to formulate the anticipated assessment benchmark. However, employees and the management can add more that they deem vital for establishing face validity. Scholars argue that adding too many factors can cause redundancy as they do not explain variation in the job structure (Witte 2011). It is the function of the occupation committee to choose such elements as they make decisions on the ones that are more important in reward management.
Step Four: Define Compensable Factors. This stage involves clear definitions of the selected factors by the job committee. The objective is to give contextual meaning of the factors regarding the intended job evaluation plan with a view of enhancing understanding among all the stakeholders including supervisors and employees. The focus of this stage is to achieve specificity of factors. Sȋrbu and Pintea (2014) reveal that more specific factors assume a narrower definition in the organizational context (Sȋrbu & Pintea 2014). The size of the factors depends on the types of jobs enrolled for evaluation. A narrower job cluster corresponds with narrow factors, whilst a wider range of job clusters calls for broader factors with the need to define sub-factors for a better understanding and to enhance the utility of those factors to the organization. It is a common practice for organizations to use factors and sub-factors in this stage (Sȋrbu & Pintea 2014).
Step Five: Define Factor Degrees. The committee makes decisions concerning the number of degrees that should be on the scale for each factor or sub-factor. The jobs are differentiated by conducting thorough evaluation surveys to draw a clear line between their degrees. However, a balance ought to be maintained to avoid too many degrees or less for these cases can render the distinction meaningless. The job committee must avoid too narrow definitions as this error can wrongly disqualify some jobs from falling into the right categories. The factors and sub-factors can use a different quantity of degrees (Kutlu, Ekmekçioğlu, & Kahraman 2013).
Step Six: Determining the Total Number of Points. The rule in this stage asserts that enough points in the plan should be utilized to differentiate sufficiently between the jobs under evaluation in the organization. Once the sum of the points required for job evaluation is obtained, a standard must be devised to determine the distribution of the points. Most organizations use regression techniques to determine which factors foresee pay rates for the jobs. Statistical weighting and judgmental weighting are examples of these techniques used to determine pay rates (Nistor 2012).
Cost Implications of Job Evaluation
Job evaluation does not just happen magically. It comes with different cost implications (Kutlu, Ekmekçioğlu, & Kahraman 2013). The process incurs costs due to the planning and implementation activities. Also, there can be instances of additional labor costs due to installation. It is worth noting that labor-cost effects differ with each installation. Similarly, the design and administrative costs are subject to variation because of different factors including the type of plan and time spent by the organization in both job pre-evaluation and evaluation (McLaughlin 2014). Besides, the organization can be forced to incur costs as they seek external consultations. If this situation occurs, the consultation fee is paid. It adds to the abovementioned costs.
Conclusion
The report has revealed that the job in which evaluation is a crucial process in determining the nature of factors that are essential for the placement of employees. The process entails comparing the different jobs to determine the ones that offer more value to the firm. It seeks to create a hierarchical job structure. A viable job evaluation program is consistent, systematic, and fair besides creating the hierarchical job positions. Employers are prompted to carry out job evaluation due to some reasons including the lack of rationale for current grading systems, appropriate implementation of organizational change, the existence of spot rates, addressing pay equity issues, handling recruitment and retention, and establishing satisfactory grading systems. The point factor approach to job assessment has been deemed appropriate for most organizations. In some cases, job evaluation is linked to various costs that result from increased installation, implementation, planning, and consultation fees.
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