Compensation Management – BUS 409
November 27, 2011
Describe the differences between job analysis and job evaluation and how these practices help establish internally consistent job structures. The differences between job analysis and job evaluation is, job analysis is a systematic process for gathering, documenting, and analyzing information in order to describe jobs. Job analyses describe content or job duties, worker requirements, and, sometimes, the job context or working conditions. Job evaluation is a systematic recognition of differences in the relative worth among a set of jobs and establishes pay differentials accordingly. “Job analysis provides information about what duties the job entails and what human characteristics are required to perform these activities. This information, in the form of job descriptions and specifications, helps managers decide what sort of people to recruit and hire. Compensation ( such as salary or bonus) usually depends on the job’s required skill and education level, safety hazards, degree of responsibility, and so on all factors you assess through job analysis. Furthermore, many employers group jobs into classes for pay purposes. Job analysis provides the information to determine the relative worth of each job” (Dessler, pg 117). “Job evaluation aims to determine a job’s relative worth. The job evaluation is a formal and systematic comparison of jobs to determine the worth of one job relative to another. Job evaluation eventually results in a wage , salary structure, or hierarchy. The basic principle of job evaluation is this: jobs that require greater qualifications, more responsibilities, and more complex job duties should receive more pay than jobs with lesser requirements” (Dessler, pg 397).
How these practices help establish internally consistent job structures are the descriptive job analysis results directly aid compensation professionals in their pay-setting decisions by differences between job content and worker requirements. Job content refers to the actual job duties and task that employees must perform on the job. Worker requirements are the minimum qualifications and skills that people must have to perform a particular job. Job evaluation partly reflects the values and priorities that management places on various positions. Some compensable factors how companies distinguish themselves is through skill, effort, responsibility, and working conditions are some of the compensable factors that companies take into consideration. Describe the challenges in developing compensations that are both internally consistent and market competitive. Internally consistent compensation systems are what allow a company to develop relative pay scales. A relative pay scale means that jobs within the company pay different rates in comparison to other jobs within the same company. The means by which these internally consistent compensation systems are developed are rooted in simple principles and requisites. Jobs that require a person to possess a higher level of education, experience, or skill will be assigned a higher wage than jobs requiring less of these requirements. Other factors affecting the relative pay of a job within the company include job complexity and the level of responsibility. These different job characteristics are formally recognized within the internally consistent compensation structure, and allow compensation managers to establish a pay scale that fairly reflects these characteristics. Despite their usefulness within an organization, internally consistent compensation systems can create a challenge in corporate competition. This is due to the fact that these systems, which are based on a formal job analysis, lead to formally structured job descriptions on which the pay scale is developed. However, it may become necessary for employees in a particular job to take on duties of other positions or duties of newly...
References: Dessler, G. (2011). Human Resource Management: 2010 custom edition (12th ed.). Upper Saddle River, NJ: Prentice Hall.
Martocchio, J. J. (2011). Strategic compensation: A human resource management approach: 2011 custom edition (6th ed.). Upper Saddle River, NJ: Prentice Hall.
What is health insurance. (n.d.). Retrieved November 15, 2011, from Investorwords.com website: http://www.investorwords.com/2289/health_insurance.html
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