JOB EVALUATION: A TOOL FOR WAGE/SALARY DETERMINATION IN ORGANIZATIONS

ABSTRACT

The study examines job evaluation as a tool to wage/salary determination in organizations. The study was undertaken in three organizations namely-Nigerian Breweries, Diamond Bank Plc and Power Holding Company of Nigeria, all located within Enugu Metropolis. The objectives of this study are; to identify job evaluation methods used in determining wages/salaries of employees in organizations; to ascertain the objectives of job evaluation to organizations; to identify the limitations of job evaluation in organizations; and to suggest measures that can help in conducting an effective job evaluation programme. The research method employed the use of primary and secondary data.  The population of the study was 1150, from which the sample size of 298 was determined using Taro Yamani’s formula. The research instruments used were questionnaire and oral interview. The reliability of the research instrument was tested using Pearson Product Moment Correlation Coefficient; the result gave a reliability index of 0.91 indicating a high degree of consistency. Chi-square and correlation coefficient were the data analysis statistical tools employed. The findings from the study reveals that; ranking, grading, point-rating and factor comparison are job evaluation methods used in determining wages/salaries of employees in organizations; job evaluation ensures that like wages are paid to all qualified employees for the same work; job evaluation is susceptible to human error and subjective judgment; finally, use of expert personnel, employee participation and comprehensive job analysis are measures that can help in conducting a successful job evaluation. The conclusion drawn from the study is that job evaluation is a technique used in determining the value of each job in relation to all other jobs within the organization. Its main aim is to establish a basis for developing rational wage/salary structure of differential rates of pay within an organization. Based on the findings, the researcher recommends that; job evaluation programme should be computerized as to speed up its process and ensure high level of accuracy; all the relevant internal and external factors should be taken into account by various organizations before assigning pay to different jobs; efforts should be made constantly by trade/labour unions to ensure maximum transparency in preparation and implementation of the wage/salary structure reached as a result of job evaluation; finally labour unions should enter into wage/salary negotiations and collective bargaining from time to time to enable workers meet up with the economic and financial challenges in the country. 

TABLE OF CONTENTS

Title Page        …        …        …        …        …        …        …        …        …        i

Certification    …        …        …        …        …        …        …        …        …        ii

Approval Page           …        …        …        …        …        …        …        iii

Dedication           …        …        …        …        …        …        iv

Acknowledgements    …   …        …        …        …        …        …        v

Abstract          …        …        …        …        …        …        …        …        …        vi

Table of Contents       …        …        …        …        …        …        …        …        vii

List of Tables  …        …        …        …        …        …        …        …        …        ix

CHAPTER ONE:     INTRODUCTION

1. Background of the Study       …        …        …        …        …        …        1
   1. Statement of the Problem        …        …        …        …        2
   1. Objectives of the Study     …        …        …        …        2
   1. Research Questions   …        …        …        …        …        2
   1. Research Hypotheses    …        …        …        …        …        3
   1. Significance of the Study          …        …        …        …        3
   1. Scope of the Study  …        …        …        …        …        …        4
   1. Limitations of the Study        …        …        …        …        4
   1. Definition of Terms    …  …        …        …        …        …        4

References     …        …        …        …        …        …        …        …        6

CHAPTER TWO:    REVIEW OF RELATED LITERATURE

• Origin of Job Evaluation         …        …        …        …        …        …        7
  • What is Job Evaluation           …        …        …        …        8
  • Objectives of Job Evaluation …       …        …        …        8
  • Job Evaluation Criteria    …        …        …        …        9
  • Job Evaluation Process       …        …        …        …        12
  • Job Evaluation Method       …        …        …        …        …        13
  • Advantages of Job Evaluation          …        …        …        21       
  • Limitations of Job Evaluation  …        …        …        …        21
  • Determination of Wage and Salary       …        …        …        22
  • Role of Trade Union Movement in Establishing Salaries/Wages       …        24
  • Essentials of a Successful Job Evaluation Programme    …        29

References     …        …        …        …        …        …        …        …        30

CHAPTER THREE:            RESEARCH METHODOLOGY

• Area of the Study       …        …        …        …        …        …        …        31
  • Sources of Data               …        …        …        …        …        31
  • Population and Sample Size Determination     …        …        31
  • Description of Research Instruments  …        …        …        33
  • Validity of the Research  Instrument …    …        …        …        34
  • Reliability of the Research Instrument      …        …        …        34
  • Method of Data Analysis       …            …        …        …        36

References     …        …        …        …        …        …        …        …        37

CHAPTER FOUR:  DATA PRESENTATION ANALYSIS

AND INTERPRETATION

• Analysis of Questionnaire Distributed and Returned       38

4.2       Testing of Hypotheses      …        …        …        …        …        43

CHAPTER FIVE:    SUMMARY OF FINDINGS, CONCLUSIONS

AND RECOMMENDATIONS

• Major Findings             …        …        …        …        52       
  • Conclusions          …        …        …        …        …        52
  • Recommendations   …        …        …        …        …        53

Bibliography   …        …        …        …        …        …        …        …        …        54

Appendix I     …        …        …        …        …        …        …        …        …        55

Appendix II   …        …        …        …        …        …        …        …        …        56

LIST OF TABLES

Table 4.1:       Questionnaire Distributed, Returned and Not Returned       …        38

Table 4.2:       Sex Distribution of the Respondents  … …        …        39

Table 4.3:       Educational Qualifications of the Respondents      …        39

Table 4.4:       Staff Category of the Respondents        …        …        40

Table 4.5:       Working Years of the Respondents       …        …        40

Table 4.6:       Job evaluation methods used in determining wages/salaries

of employees in organizations … …        41

Table 4.7:       Objectives of job evaluation to organizations       …        42

Table 4.8:       Limitations of job evaluation to organizations      …        43

Table 4.9:       Measures that can help in conducting an effective job

evaluation programme …        …        …        …        …        44

Table 4.10:     A Contingency Table (reproduced table 4.6) for Hypothesis I          45       

Table 4.11:     A Contingency Table (Reproduced table 4.7) for Hypothesis II       47

Table 4.12:     A Contingency Table (reproduced table 4.8) for Hypothesis III       49

Table 4.13:     A Contingency Table (reproduced table 4.9) for Hypothesis IV       50

CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

In any organization once a right candidate is placed on a right job, the person needs to be duly compensated for the job he/she performs. To ensure that this is adequately done, there should be an established consistent and systematic relationship among compensation rates for all the jobs within the organization. The process of carrying out such activity is termed “Job evaluation”.

In carrying out job evaluation, analysis of different jobs are done in order to match the duties of job with the required skill, knowledge, competence, talent potential, education, work environment, responsibilities, etc.

Different jobs need to be evaluated comparatively to determine their relative worth so as to fix wages, salaries and benefits for each job.

In job evaluation the information provided by the job analysts is utilized to evaluate each job. Under job evaluation, the relative worth of different jobs are studied and compared. In other words job evaluation is determining the comparative worth of various jobs. British Management Institute (1951).

After determining the relative worth of jobs, they are priced, that is, wages and salaries are fixed. This enables organizations to minimize inequalities. Job evaluation plays a prime role in establishing the pay structure. It rates the job alone and establishes internal equality.

After job evaluation, all wage and salary earners are to receive pay. The total pay received are made up in quite a number of different ways by considering some elements in the pay structure such as basic rate, premium rate (over time), bonuses, share of profit, allowances and fringe benefits.

An effective job evaluation can help to identify the number of people employed within different categories and how the salary budget is apportioned.

Job evaluation is necessary for sustaining cordial relations within and between employee and employer. Employees that are satisfied with the relative worth of their job tend to put more effort in their work, this can directly boost the organizations performance and also give them an edge over their counterparts.  

1. STATEMENT OF THE PROBLEM

Job evaluation is necessary to boost the morale of workers and to enhance productivity.