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After reading the following article answer the questions below.


How do job evaluation and market pricing approaches to setting pay ranges differ? What are the strengths and drawbacks of each approach?

What is the push today in many organizations (for example, JCPenney) for pay to be determined by job duties and results, not effort and tenure?

Formulate your research-based recommendations about whether or not the job evaluation approach is outdated.

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How do job evaluation and market pricing approaches to setting pay ranges differ? What are the strengths and drawbacks of each approach?

There are some differences between job evaluation and pricing approaches to setting pay ranges. In case of job evaluation, within the organization jobs are ranked in order of seniority. Such ranking is done on the basis of hierarchy. Another method of building up job ranks is to do a pair comparison. This method enables the ranking of jobs in a more objective manner. In other organizations certain jobs are analyzed with great rigor and these are set up a slot jobs. The other jobs are ranked in comparison with these jobs. There are several variations in these methods, for instance in some firms positions are matched with each other and if the elements differ the jobs are evaluated again. Some classification methods are used in job evaluation.
In case of market pricing, the most basic model is one where every job is priced and fixed to a specific market wage. This model requires tying up of jobs with different market ranges. The market pricing can also be done with benchmarks. Similar jobs with benchmarks are placed together so that midpoints are creates and these are compared with market rates. Then there are internal evaluation systems that are used to set pay. Then these points are compared with market prices.
There are strengths of job evaluation. These include reduction in in inequality in salary structure, specialization, and aid in selection of employees Further, job evaluation leads to standardization of salary ranges, and it helps price new jobs. One of the great advantages of job evaluation is that there is good relationship between the manager and the ...

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  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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