Mgt511

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Trident University International

MGT511: Adv. Topics In Human Res. Mgmt

How do job evaluation and market pricing approaches to setting pay ranges differ? What are the strengths and drawbacks of each approach? Job evaluation is the process of methodically establishing a structure or hierarchy of jobs within an organization. This is based on a systematic consideration of job content and requirements. The purpose of the job structure, or hierarchy, is to provide a basis for the development of a wage structure. Job analysis helps in finding the relative worth of a job, based on criteria such as degree of difficulty, type of work done, skills and knowledge needed, etc. This, in turn, assists in designing proper wage policies, with internal pay equity between jobs. The process to evaluate a position was tedious and relatively expensive since it normally required writing descriptions, having a committee “evaluate” the positions and then reviewing the resulting ratings against the available market data before finalizing the evaluation. As jobs became more fluid, it became harder and harder to maintain the evaluation programs on a timely basis. Job Evaluation Methods, retrieved August 21, 2012, from http://www.openlearningworld.com/olw/courses/books/Job%20Analysis%20and%20Evaluation/Job%20Analysis%20and%20Evaluation/Job%20Evaluation%20Methods.html Market pricing is both more and less than job evaluation. It is more than job evaluation in that the final product is a wage structure, not a job structure as in job evaluation. It is less than job evaluation in that it provides a wage structure based solely upon competitive wage rates. The organization's strategy is limited to the determination of the appropriate wage level and not the determination of the importance of jobs to the organization. Market pricing is using external sources to assign value to your own company’s jobs. Job evaluation, on the other hand, is a systemic approach to analyze and value them within...
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