Human Resource on Itec Ltd

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As HR manager I have been asked to produce a report about my opinion on job evaluation as a whole. It will include my definition of job evaluation, a discussion regarding the factors determining an employee’s wage or salary, the advantages and disadvantages of performance related pay and an exploration of the factors determining an employee’s performance at work.

Finally, I will come to the conclusion to whether I think that job evaluation is a worthwhile procedure to Nick Moor and the organisation and whether it will prevent equal pay claims.
1a. Job Evaluation

“Job evaluation can be defined as ‘a method of determining the relative worth of a job to an organisation” {}

Itec Ltd can use job evaluation to compare the value of different jobs within the company. Any job can be broken down into a number of factors. These are the skills, effort, responsibility, knowledge, and tasks that a job entails. This will allow Nick Moor to decide on the wages or salary for that particular job. If another job has greater skill or responsibility, then Nick Moor can decide to award it a higher rate of pay.

Job evaluation has become a lot more popular over the last decade. It has been seen by businesses as a rational way of working out why some jobs are paid more than others. For example at ‘The Perfume Shop’, wages and salaries for different members of staff are evaluated by the different responsibilities they have. A sales assistant has a lower rate of pay than a senior sales assistant simply because the senior sales assistant has more responsibility with the day to day running of the business i.e. banking, cashing up etc.

An issue within Itec Ltd is the disputes regarding equal pay. Job evaluation can help rectify the situation by assessing whether the employees are doing work of equal pay.

The most common method of job evaluation is a point’s scheme. A number of factors (listed below.) are found which are common to all jobs. Each factor would be given an assessment, and then awarded points according to the importance of the factor needed for the job. The total number of points determines the value of the job, and the wages or salary to be paid.

The factors that are most commonly assessed and measured are:

Knowledge and skills- These include factors such as, qualifications, work experience, any specialist training, external qualifications and the length of service.

People Management- Would include skills such as human relations, ability to work under stressful conditions and supervisory responsibility. Communication and networking- This would include factors like social skills, enthusiasm, and diplomacy.

Decision Making- Initiative, analytical ability and judgement.

Working Environment- Extent of management skills required and knowledge.

Impact and Influence- Includes responsibility, results of mistakes, competence and impact on customers.

Financial Responsibility- This involves budgeting.

There are also other methods of job evaluation that Itec Ltd could decide to use:

Factor Comparison, which is quite similar to points rating in the sense that it is based on factors however, no points are appointed.

Non-analytical schemes, which are less goal orientated but are most often less complicated and financially efficient than analytical schemes such as points rating. Methods within this sector include job ranking, paired comparisons and job classification.

Job ranking is the simplest method of job evaluation. This is where jobs are arranged in order of importance, order of difficulty or job value and are then analysed by qualifications, knowledge, responsibility etc. They are then formed into a hierarchy of different levels, or ranks within the company. The following table shows an example of job ranking using the job value factor:

Job TitleRank
Most Valued
1. Forklift Driver1. Inspector
2. Machinist2. Machinist
3. Inspector3. Secretary
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