Systematic Comparison between Jobs

Job evaluation is a systematic way of determining the value / worth a job in relation to other jobs in an organization. It tries to make systematic comparison between jobs to assess their relative worth for the purpose of establishing a rational pay structure.
Job evaluation needs to be differentiated from job analysis. Job analysis is a systematic way of gathering information about a job. Every job evaluation method requires at least some basic job analysis in order to provide factual information about the jobs concerned. Thus, job evaluation begins with job analysis and ends at that point where the worth of a job is ascertained for achieving pay equity between jobs.
Job evaluation versus performance appraisal (PA):
Job evaluation is different from performance appraisal. PA is the systematic description of an employee’s job related strengths and weaknesses. The basic purpose of PA is to find out how well the employee is doing the job and establish a plan for improvement. The aim of job evaluation is to find the relative value / worth of a job to determine what a fair wage or such a job should be. The difference between the two may be presented thus:
Job evaluation versus Performance
Point >> Define >> Aim >> Shows
Job evaluation
1) Find the relative worth of a job.
2) Determine wage rates for different jobs.
3) How much a job is worth?
Performance appraisal
1) Find the worth of a job holder.
2) Determine incentives and rewards for superior performance
3) How well an individual is doing an assigned work?
The purpose of job evaluation is to produce a defensive ranking of jobs on which a rational and acceptable pay structure can be built. The important features of job evaluation may be summarized thus:
1) It tries to assess jobs, not people
2) The standards of jobs evaluation are relative not absolute
3) The basic information on which job evaluations are made as obtained from job analysis.
4) Job evaluation are carried out by groups not by individuals
5) Some degree of subjectivity is always present in job evaluation
6) Job evaluation does not fix pay scales but merely provides a basis for evaluating a rational wage structure.
Process of Job evaluation
The process of job evaluation involves the following steps:
Gaining acceptance:
Before undertaking job evaluation, top management must explain the aims and uses of the program to the employees and unions. To elaborate the program further oral presentations could be made. Letters booklets could not be used to classify all relevant aspects of the job evaluation programs.
Creating job evaluation committee:
It is not possible for a single person to evaluate all the key jobs in an organization. Usually a job evaluation committee consisting of experienced employees union representatives and HR experts is created to set the ball rolling.
Finding the jobs to be evaluated:
Every job need not be evaluated. This may be too taxing and costly. Certain keys jobs in each department may be identified. While picking up the jobs, care must be taken to ensure that they represent the type of work performed in that department.
Analysing and preparing job description:

This requires the preparation of job descriptions and also an analysis of jobs need for successful performance.
Selecting the method of evaluation:
The most important method of evaluating the jobs must be identified now, keeping the job factors as well as organizational demands in mind.
Classifying Jobs:
The relative worth of various jobs in an organization may be found out after arranging jobs in order of importance using criteria such as skill requirements, experience needed, under which conditions job is performed type of responsibilities to be shouldered, degree of supervision needed the amount of stress caused by the job etc. Weights can be assigned to each such factor. When we finally add all the weights the worth of a job is determined. The points may then be converted into monetary values.
Source: HRM