Job evaluation is technically not simple but rather a complicated system because of the involvement of human beings. The emergence of job evaluation is directly referred to the grievances and differences about existing wage rates among the employees. High degree of reliability is necessary and can be determined but validity of the process can be determined only through employee satisfaction. Job evaluation is not only a scientific process but it is analytical and systematic approach. Consequently, we must be concerned with employee and labor union reactions.
The second problem which comes from job evaluation is that lessens the grievance more rapidly. It is argued on this point that there is always some confused conditions in the organization which become more clear and distinct, as job evaluation gives clear definition of wage structure.
And finally, the most common platform for the conflict between management and workers is in relations to skill, responsibility, efforts, working conditions and the compensation for these factors. The solution to this problem is that management has to be flexible.
To conclude, we can say that though the conflict between employer and the employee cannot be totally eliminated, it is possible to minimize it if both employer and employees agree to the usefulness of job evaluation methods in fixing the worth of a particular job.
Concept of Wage:
A very common terminology ‘wage’ does not demand an explanation. A need to define ‘wage’ hardly arises. The term wage has been defined under the Minimum Wages Act, 1948. According to it, ‘wages’ means all remuneration capable of being expressed in terms of money, which would, if the terms of the contract of employment , express or implied, were fulfilled, be payable to a person employed in respect of this employment or of work done in such employment. It includes house rent allowance but does not include:
1. the value of (1) any house accommodation, supply of light, water, medical attendance or (2) any other amenity or any service excluded by general or special order of the appropriate government.
2. any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance.
3. any traveling allowance or the value of any traveling concession.
4. Any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment or
5. any gratuity payable on discharge.
But this definition created more confusion than simplifying meaning. Thus for our purpose, we can say that ‘wage’ is a reward to the employees for services rendered. It is necessarily that reward which is in monetary terms plus any extra benefits. The wage normally consists of basic wage, dearness allowance, bonus and other incentives. Basic wage directly depends upon the internal economic conditions, whereas the other two components namely, the dearness allowance and bonus are affected by external factors. Financial incentive which is a major constituent of any wage plan is worked out in accordance with the wage incentive system which the enterprise may decide to adopt. The type of wage incentive system that the enterprise chooses to operate depends upon the company’s wage policy. Here it is important to emphasize that basic wage is not generally amenable to change and therefore, is kept more or less constant. The increase in wage is therefore, effectuated through changes in the dearness allowance and other incentives.
The Bhootalingam Committee (India) report on Wage, Income and Prices had once again revived the question of the need and the importance of a sound wage policy. How far has the government been successful in this direction in the past? Have we ever had a rational and sound wage policy? To answer these questions, one will have to look at the attempts made in the past and the achievements accrued thereof. After independence the Government of India in its economic policy emphasized on twin goals of achieving economic growth and social justice. In practice, however, these two goals are found to be inherently conflicting. Though time and again attempts have been made to strike a balance between two inherently conflicting goals, little could be achieved.