1 Discuss the contents of Job Evaluation.

Describe the process of Job evaluation

Explain the contents of Job Evaluation
Explain the process of Job Evaluation

Answer: The contents of job evaluation are:

1. Job analysis: It is the process of examining the job content by breaking it down into its
functions, elements, tasks, operations and processes.
2. Job description: It is a written and general statement that outlines the skills, education and
training required by the potential employee to perform the particular task.
3. Job classification: Here jobs are grouped with respect to their worth.
4. Job specification: It is a statement, which contains the qualifications and characteristics of an
employee, which are required for the successful task completion.

Process of Job Evaluation

Step 1: Appointment and creation of committee
In the first step a committee is set up which consists of experienced HR experts, employees and
union members so as to evaluate all the jobs in the organisation.
Step 2: Finding and identifying jobs that needs to be evaluated
In the second step, the jobs in various departments of the organisations need to be identified in
order to find out which job requires to be evaluated.
Step 3: Analysing the job description and job analysis
The third step in the organisation is to conduct job analysis and job description which is
necessary for successful performance.
Step 4: Selection of job evaluation method
The fourth step in the evaluation of the job is to select the method for evaluation. This must be
identified while keeping the demands of the organisation as well as factors related to job in
mind.
Step 5: Classification of job and compensation
In the fifth step, the relative worth of the jobs are arranged as per the requirement of skills,
experience required, conditions under which the task is to be carried out, responsibilities to be
handled, degree of supervision that is required and so on. Thus, all these factors are assigned by
weights which determine the relative worth of the job.
Step 6: Initiating the program
This step is further carried out when the action plan is ready and the top management explain
this plan to their employees and finally put it into operation.
Step 7: Concluding results
Thus, final step in the evaluation of the job is to review and examine the jobs periodically taking
into account the environmental conditions such as technology, services, products etc.

2 Suppose you are a HR Manager and you are asked to develop an effective Incentive
Scheme for your organization. What are the pre-requisites you will consider while
developing an Effective Incentive Scheme? Discuss the merits & demerits of Incentives
Explaining the pre-requisites of effective Incentive Scheme
Discuss the merits and demerits of Incentives

Answer: You can conclude by now that for all firms a well-designed system of wage payment
can yield a number of advantages. But it is also true that to realise these advantages there must
be some safeguards known as prerequisites of effective incentive plans.

These pre-requisites are as under:

1. The workers’ co-operation is mandatory in execution of incentive schemes. The co-operation
is required in respect of methods adopted for analysis of result or output on basis of which
payment is done, the setting wage rate methods for different work categories and prerequisites
relating to job security, earnings and dispute settlement regarding work standards.
2. The incentive scheme must be influenced by scientific work measurement like the standards
set must be practical and inspiring. In addition, the employees must be provided with necessary
resources to meet these standards.
3. All indirect staff like foremen, helpers, supervisors, and canteen staff charge hands etc. should
also be roofed under incentive schemes.
4. A management commitment to oversee the outlay and schedule the proper administration of
plans should be formed.
5. An incentive plan should be first planned properly and then implemented carefully to achieve
desired results.

Merits
You will find that the principal advantage of incentives is that it induces and motivates
employees to achieve high efficiency and superior output. Fixed remuneration does not act as a
motivator for workers to yield improved results rather it removes panic of insecurity from
employees’ mind. Incentives result in enhancement of earnings which have helped employees in
improving their standard of living. Instances show that wages have exceeded two to three times
as contrasted to the time-rated wages because of incentives.

Firms can bring down their per unit as well as total cost of production using incentives as
increase in productivity will lead to a larger output for given inputs bringing down the total and
unit cost of production. The further benefits of incentive payments are: reduced command,
greater equipment utilisation, reduction in scrap and time lost, condensed turnover and
absenteeism and augmented output. Furthermore, systems of imbursement by results would
facilitate the application of cost control techniques like standard costing and budgetary control.

Demerits
The quality of products may show tendencies to get worse if steps are not taken for timely
quality maintenance through checking and inspection involving added costs. A firm may face
difficulties related to introduction of new methods or machines as employees may oppose them
out of their fear that the new piece of bonus rates set may yield lower earnings or that such
introduction will slow their work rate.

In addition, a jealousy may arise between employees for the reason that some may earn more
than others. One of the biggest complexities in incentive systems is fixing of piece or bonus
rates. Rate fixing involves fair and accurate judgement in which there is always an error risk.
Small rates will make workers disappointed and they will be under pressure to work very hard.
Soaring rates may slacken their efforts at times and employer may not take the option of
revising the rates because earnings are too high.

Firms can also face difficulty in determining standard performance. Firms usually use the
average of past year’s performance for this purpose. Most of the problems of financial incentives
arise either from the inadequacies of the particular system or from incorrect application and
insufficient control. In western countries, as also in India, it has now been realised that
economic gain is no longer a source of motivation and that greater emphasis should be placed
on non-economic factors.

3 Discuss the types of managerial remuneration. Explain the elements of a managerial

remuneration
Explain the types of managerial remuneration
Explain the elements of a managerial remuneration
Answer: Types of managerial remuneration
Due to financial crises in the last two decades, the remuneration part of the managers has
changed drastically which affect their compensation structure. Thus, managerial remuneration
comprises of two important pays which are as follows:
1. Short term pay: The short term remuneration is related to the bonuses (short term) and the
base pay which are usually paid to the managers according to their performance in the
organisation. This type of pay is totally cash based managerial remuneration component and
over a certain period of time these bonuses become deferred.

2. Long term pay: The long term remuneration comprises of stocks which are restricted, stock
options, salary which depend on the performance against the index and shares. These long term
remuneration elements are used by the shareholders in order to protect the organisation’s
value as well as gaming control of the top level managers on the rising value of the firm in the
marketplace.

Elements of managerial remuneration

1. Base salaries: It is the first element of the managerial remuneration which is analysed with
the help of Job Evaluation and also serves as incentives also. While evaluating the salary, Job
Evaluation is just a part of it. An executive is compensated on the basis of his competencies and
also the performance of his/her work. CEO’s base salary is determined with the help of
benchmarking which is based on the Industry Salary Surveys. Size is usually calculated with the
help of revenues of the Organisation

2. Special package of perquisites and benefits: Managers also enjoy all kinds of benefits and
perquisites which the organisations offer to their employees. Therefore, in order to maximise
the availability of time to key managers from the purpose of business perspective, various other
facilities are also offered to them such as connection of internet, connection of cell phone and so
on.

3. Profit sharing bonus: In today’s global competitive scenario, in the programme of executive
payments, Profit sharing bonus plays a very important role. This type of bonus is usually based
on the profit sharing or performance.

4. Short term bonuses: Such type of bonuses ranges from 50% of the base salary to 10 or more
times of the base salary are offered when firm a very good year had by recognising the financial
indicators.

5. Long term performance bonus: Here the payment of cash to the corporate managers is
similar to that of the short term bonuses. The only difference you may find is in the time period
for receipt is 2 years or more into the future and the award size is based on the multiyear
achievement of established performance related objectives.

6. Stock options: Now a day many firms offer “stock equivalences” in the form of share
appreciation rights/phantom shares. Here recipients are compensated with a stock increased
value that is further determined by the base valuation which is prepared when share
appreciation rights/phantom shares are given.

7. Severance packages: These types of packages are also known as Golden Handshake which is
financial remuneration and incentive packages which if given to those employees in the
organisations who are retired or laid off. This package includes:
 life and health insurance
 retirement benefits
 stock options
 remuneration for vacation days or unused sick
  Assistance for job placement

4 Define Pay Structure. What are its objectives? Explain the major decisions involved in
designing and setting competitive pay structures
Definition of Pay Structure
Objectives of Pay Structure
Explain the major decisions involved in designing and setting competitive pay structure

Answer: A pay/salary structure refers to the collection of salary grades, bands or levels,
connection of related jobs within a series or hierarchy which helps the organisation in providing
a framework for the implementation of various policies and reward strategies within the
organisation. Various salary structures are connected with varying types of salary progression
arrangements.

Objectives of pay structure

Following are the objectives of the salary structure in the organisation with the help of which
you will be able to know their importance in designing the pay structure:
 To balance strategy of reward with the strategy of the business so as to encourage and
motivate high performance level people.
 To bring out clarity and order between organisation and its people in managing career
progression as well as increase in pay.
 To make transparency and ensure lawfulness and fairness while designing the pay
structure.

The major decisions in designing and setting the competitive pay structures include:
1. Specifying the competitive pay policy of the employer with the help of surveys which gives
data for converting the pay policy into pay structures, pay levels and pay mix.
2. Defining the purpose of survey which is conducted because of the following reasons:
 to analyse pay related problems and establish pay structure
 To estimate labour price of services and product market competitors and to select the
market competitors which are based on similar skills, same services and products as
well as employees within the similar geographical area.
3. Selection of jobs in the survey with the help of two approaches:
 Low – high approach which identifies lowest and highest paid benchmark jobs for the
relevant competencies in the relevant market and to use the salaries for these jobs as
anchors basically for the skill based structures.
 Benchmark job approach includes the entire structure of the job which comprises of all
the key functions and levels that can be matched with the descriptions of the benchmark
jobs.
4. Designing the survey with the help of three categories of data which are required to evaluate
the total compensation package with respect to the competitor’s practices. These are:
 providing information about the nature of the firm
 providing information about the total pay system
 specifying compensation data on each incumbent in the jobs understudy
5. Interpreting the survey results by analysing and assessing the outcomes as well as using
statistics in order to construct the market line so as to check the accuracy of the job matches, the
anomalies, age of data and the nature of the firms.
6. Balance the competitiveness with internal alignment which includes use of bands, ranges and
flat rates which offer flexibility so as to deal with pressures from external markets and
differences among firms.

5 Explain the criteria’s considered for rewarding the employees for their good service
Explanation of the criteria’s responsible for rewarding the employees

Answer: Criteria’s responsible for rewarding the employees

1. Analysing and surveying of staff: Conducting the surveys is regarded as one of the most
critical challenge for the firms when it comes to motivate their employees. For this the firm
must deeply understand their employees as well as their culture. Thus for this, they have
created “Culture Critique” by using the staff focus groups and also one-to-one interviews for
both current and existing employees.
2. Build up a checklist of service quality: As checklist may differ from firm to firm according
to their size and internal factors, today many firms are using Business Excellence model as a
diagnostic tool. This tool helps the organisation in showing how the customer satisfaction is
linked to people issues.
3. Creating a motivational environment by providing training to the managers: Many
service organisations provide training to their managers in motivation and leadership with the
help of following five steps:
 Making the workplace fun
 Providing the specific and copious recognition for the task which employees perform
 Offering targeted and frequent rewards
 Making communication influential and credible
 Rewarding the loyalty of employees
4. Giving positive feedback: A ‘well done’ and ‘Thank you’ from managers is very influential
for the employees than token or monetary reward.
Example: FedEx rigorously champions managers as servicing their employees to service the
customer.
5. Establishing a league table of service performance: Nowadays many organisations
especially retailers such as Pizza Hut use survey for their customer satisfaction as well as use
mystery shopping so as to examine their outlet’s performance. Pizza Hut brings out the
outcomes in league tables of customer service performance and finally feedback the outcome to
the restaurant within five days. . The most successful are those where appreciation is given not
just to the top performer employees but also to those employees who make the best
improvements over time in their firm.
6. Feedback to the compliments and comments of customers: Kwik- Fit keeps a customer
correspondence folder in each Depot reception area, publicizing positive letters customers has
written. It rings up customers on a daily basis and publicises the results internally.
7. Issue Achievement Certificates: An achievement certificate such as token award can
become highly prized when employees achieve defined standards of customer service and skills
level.
8. Link Bonuses to customer satisfaction: Not only for the managers but also for the service
staff, bonus payment which is a variable element becoming a very vital component of
organisations. Bonuses are often linked to the Profit Achievement.
9. Implement 360 degree appraisal method: As satisfied customers are closely linked to the
satisfied employees, many firms are encouraging input by employees as well as customers into a
manager’s all round 360 degree feedback.
10. Develop customer service competencies as well as include customer service in
performance management: The first step insetting out well-defined development and
improvement targets is to define the service competencies. Customer Service is becoming more
widespread as a valuable transferable qualification. Customer service is also regarded as a key
measurement in performance appraisal.

6 Write a short note on the following:

a)Wage Policy Plan in India
b)Voluntary Retirement Scheme(VRS)
Answer: a) Wage policy can be defined as the principles which act as guidelines for
determination of a wage structure. It relates to all systematic efforts of the Government in
relation to a national wage and structure of wages.

The wage policy in India is built around the following fundamental principles:
1. Equal compensation for an equal work performed
2. Providing living wages for employees
3. Payment of wages without any deduction on the appointed dates
4. Use of collective bargaining to resolve wage related issues
5. As per legal provisions paying 8.33% as statutory bonus
6. Determination of fair wages above minimum wages in respect to labour productivity,
prevailing wage levels, national income and its distribution and place of industry in the financial
system

b) Voluntary Retirement Scheme (VRS) is the most common method which is used by
organisations to reduce excess manpower. It helps the employer not only to compete and
survive in this current business scenario but also improve his/her performance. This scheme
also becomes the prominent means of downsizing of employees. VRS is also known by the
names such as Voluntary Separation Scheme, Golden Handshake and Early Separation Scheme.

Though the criteria of eligibility of VRS may differ from organisation to organisation it is given
only to those employees who have either served 10 years of working or attained 40 years of age.
Thus, the employees who opt for this scheme are permitted to get 45 days of benefits for each
completed year of working or monthly benefits during retirement time which is multiplied with
service months that are left before the date of working whichever is less.

Reasons for adopting VRS by organisations

An organisation may offer the schemes of VRS under the following conditions:
1. Due to mergers and takeovers.
2. Due to decline in the company.
3. Due to obsolescence of technology/product.
4. Due to intense competition.
5. Due to joint ventures with the foreign collaborations.