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Job Evaluation & Compensation System

Job evaluation is a process that serves the needs of the compensation system in a company by determining the relative value of one job in relation to another. The basic purpose of job evaluation is to eliminate pay inequities which may exist because of illogical pay structures, such as might develop over time if care is not taken in how compensation is determined. Job evaluation programs are generally administered by the human resource department and is usually conducted by committee. The jobs people have are major determinants of the amount of financial compensation they will receive, and organizations pay for the value attached to certain duties, responsibilities, and other job-related factors, such as working conditions. The relative worth of jobs is usually determined through a combination of job analysis, job descriptions, and job evaluation. Job analysis and job description determine and express the content of a given job, while job evaluation makes use of this data to compare jobs and set compensation.

Job evaluation is used to accomplish the following tasks:

* Identify the job structure of the organization.

* Bring order and equity to the relationship among jobs.

* Develop a hierarchy of job value to create a pay structure.

* Achieve a consensus among managers and employees concerning jobs and pay within the company (Mondy & Noe, 1993, 453).

Job evaluation should be conducted as a systematic analysis of jobs to determine relative worth within the organization. This should not be confused with performance evaluation, which is the process of determining how well employees do their jobs. Job evaluation does not review the employees in a given position but rather the position itself. The result will be that employees in positions of less worth to the company will be paid less than employees in positions of greater worth, regardless of who the given employee may be. Job evaluation is useful for manage...

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Job Evaluation & Compensation System. (1969, December 31). In Retrieved 17:13, February 22, 2017, from