Februa ry 16, 1957 T H E E C O N O M I C W E E K L Y

Job Evaluat ion ' T H E Cent ra l Pay Commission's

recommendations are no longer applicable as the condit ions have changed since 1950 when t h a t Com­mission repor ted. I t i s now expect­ed Wage Boards w o u l d be fo rmed and t ha t pay scales w i l l be fixed and wage disputes solved on a more scientific basis t han h a d been at­tempted in the past . Th i s must ce r t a in ly be the ra t iona le of ap­p o i n t i n g Wage Boards . B u t even i f condit ions had not changed, the recommendat ions of the Cent ra l Pay Commiss ion w o u l d s t i l l be un­sa t i s fac tory because though the Commiss ion recognised t h a t job eva lua t ion was the scientific method of pay and wage regula t ion , i t d id no t a t t empt such eva lua t ion .

Th i s being the only scientific basis fo r de te rmin ing wages, i t is to be presumed t h a t the Wage Boards, when they are formed, w o u l d fo l low th is method. I t has been found by experience in other countries to offer the best solut ion of wage disputes, and thus proved to be an effective means of reducing labour discontent as w e l l as loss of man days ; besides p romo t ing better i ndus t r i a l rela­t ions generally. Of late, there has been an appreciable de te r iora t ion in i ndus t r i a l re la t ions judged by the number of disputes, of worke r s i n ­volved and man-days lost and wage grumbles have also become louder. The case for scientific j ob evaluat ion for r a t iona l i s ing the s t ruc ture of wages in indust ry , therefore, cannot be deferred for long, p a r t i c u l a r l y in v iew of the large scale indus t r i a l expansion under taken under the Second P lan . An a t t empt is made below to explain the method of job eva lua t ion .

Since most of the disputes and collective ba rga in ing hinge on the question of wages, any fa i r wage a d m i n i s t r a t i o n should a i m at the f o l l o w i n g :

1. P a r i t y of pay according to the na tu re of the w o r k . This also means equal pay for equal work , and pro­por t iona te pay for proport ionate w o r k . Th i s can be accomplished t h r o u g h job evaluat ion.

2. There should not be too wide a difference between the b o t t o m and top of the scale in time-scale of pay,

3. M a n u a l labour should be better pa id if greater d i g n i t y is to be at­tached to l abour . Th i s is, however,

not a separate issue: i t w i l l come au toma t i ca l l y when job-eva lua t ion system is introduced.

Job Evaluation Method The poin t system of job-evalua t ion

is more commonly in use t h a n other methods. Each j ob or class of jobs can be evaluated in terms of several factors associated w i t h the physical and in te l lec tua l requirements, to­gether w i t h the responsibi l i ty and r i sk i n v o l v e d . Each fac tor should be defined and we l l understood, and the necessary score points should be assigned to each. The evalua t ion , schedule should be prepared by ex­perts who are conversant w i t h the jobs, and should be examined by the representatives of the part ies con­cerned. In order to establish a na t ion-wide s tandard, the commit tee m a y include members f r o m the Go­vernment , Labour T r i b u n a l officials and leaders of recognized L a b o u r Un ions . The evalua t ion plans can also be adopted industry-wise , or organizat ion-wise.

An example of a job-evaluat ion schedule used in some A m e r i c a n industries, is g iven below.

The score points advance f r o m m i n i m u m to m a x i m u m in six equal steps. F o r instance, i t em (1) w i l l score one of the six degrees 15, 30, 45, 60, 75 and 90 in dif ferent jobs. Each degree or step should also be wel l defined so t h a t the eva lua t ing members can come to a closer agreement and under s t and ing . Only two out of the above twelve factors are elaborated here by w a y of ex­p lana t ion . Educat ion required, 1st

degree (15 points) = A b i l i t y to read and w r i t e ; 2nd degree (30) = G r a m ­m a r school education; 3 rd degree (45) =2 years of h i g h school or t rade school or equivalent; 4 t h de­gree (60)= 4 years of h i g h school or g radua t ion f r o m business school or equivalent; 5 t h degree ( 7 5 ) = 2 years of college t r a i n i n g or equivalent ; 6 th degree (90) =college or un ive r s i t y degree or equivalent . Experience required: 1st degree ( 2 5 ) = u p t o 2 months ; 2nd degree (50 )=2-6 months ; 3 rd degree ( 7 5 ) = 6 m o n t h —2 years; 4 th degree (100)=2-4 years; 5 th degree ( 1 2 5 ) = 4 - 6 years; 6 th degree (150 )=ove r 6 years. The schedule can be modified to sui t I n d i a n condit ions.

As a first step, a few representa­t ive types of jobs should be evaluted. A l l the jobs cannot be evaluated a l l a t once. B u t the beg inn ing mus t be made w i t h the i m p o r t a n t classes of jobs . Once th is is done, other jobs can be f i t ted in a m o n g them u n t i l the scope of the eva lua t ion is extended to cover a l l of them.

A single evaluat ion schedule can be used to cover a large number of jobs and a wide range of pay. A u n i f o r m p lan has sometimes been used to cover the hourly-based wages and the whi te -co l l a r salaries upto $ 4000 per year (approx Rs. 1500|- per m o n t h ) . Dif ferent plans are also used.

Merit Rating and Job Pricing Job-evaluat ion and m e r i t r a t i n g ,

however, are quite d i f ferent . Job evaluat ion f ixes the re la t ive job meri ts , wh i l e m e r i t r a t i n g relates to

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T H E E C O N O M I C W E E K L Y February 16, 1957

the re la t ive abi l i t ies of the i n d i v i d u ­al w o r k e r s . Thus Job evaluat ion helps in f ixing job prices (pay or pay-scale), and m e r i t r a t i n g helps p i ck ing out efficient workers fo r promot ion , ex t ra advancement, reward , etc.

Job evaluat ion gives the respec­t ive t o t a l score points for the differ­ent jobs . Thus the relat ive values of the jobs are obta ined . N o w i f each point or each 100 points are assigned a money value, the respec­t ive pay for the different jobs be­comes r a t i o n a l l y fixed.

The job prices obtained by the above method may be taken for the base of scale of each j o b . F ixed pay does not provide incentive. I n ­centive programme based solely on mer i t r a t i n g i s p rac t i ca l ly u n w o r k ­able. Usua l ly a t ime- increment scale is used. In a few organizat ions some mer i t increment (e g produc­t ion bonus on ind iv idua l or collec­t ive product ion) is given in addi t ion to the time-scale.

Time Scale Time-increment , i f too meagre,

however, wou ld not provide suffi­cient incentive to the employees. On the other hand, i f the top of the scale is very much higher than the s ta r t there is l i k e l y to be admin i ­

s t ra t ive abuse. The time-scale should be f a i r l y commensurate w i t h the increase of product ion or qua l i ty w i t h experience on the job. The rate of increment cannot however, be quite equal to the increase in pro­duct ion or qua l i ty but somewhat more than that , considering the need for increased earn ing w i t h age and on other considerations.

I t has been observed tha t t ime increment smaller t h a n 5% per year ha rd ly provides any incentive. I t has also been held by some experts t ha t an increase of 50% t h r o u g h the scale-period should be considered too h igh and i t betrays the purpose of job eva lua t ion . The basis of the a rgu­ment is t h a t the f u l l time-efficiency (experience) reaches its higest w i t h ­in some five years or so on a p a r t i ­cular job . Thus a long d r a w n out time-scale w i t h a wide fac tor be­tween the f inal and i n i t i a l pay (f inal as 2-3 times i n i t i a l , in many of our pay scales) w o u l d be inadmissible under any scientific pay admin i s t ra ­t ion .

The long d r a w n out time-scales, prevalent in our count ry , are no t jus­t i f ied by time-experience efficiency. I t Is also a system w h i c h encourages mediocr i ty and play-safe a t t i tude in

cont ras t to in i t i a t ive and positive act ion. Bet ter efficiency can be ex­pected t h rough nar rower time-scales (not exceeding th rough 5 or 7 years) w i t h adequate job grades for pro­mot ion and w i t h the provision for meri t - incent ives .

(Mer i t r a t i n g by the annual con­fidential reports as usually fol lowed in this country, specially in Govern­ment or semi-Government depart­ments, should be discont inued f o r t h ­w i t h and should be replaced by point r a t i n g system on well-defined f ac to r s ) .

Basic Rates The basic rates of pay and wages

should take in to consideration the s t a tu to ry m i n i m u m wage, prevalent rates and cost of l i v i n g . The rates should be as consolidated as possible, and should exclude allowances under various names. This w i l l make the status of the employees better under­standable or comparable, and w i l l also make the account ing easier.

I t need not be though t t h a t j ob -evaluat ion is an extremely complex and t ime-consuming under t ak ing . Records show tha t near ly 100 jobs can be described and evaluated per month . Sooner we s t a r t on this scientific procedure the better.

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February 16, 1957 T H E E C O N O M I C W E E K L Y