Microsoft Word - APAM-2 4.1.doc

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  • The power of collective bargaining: In countries and organisations where trade
    unions are strong, they tend to influence the reward systems. However, with
    increasing contract based employment, the power of trade unions in collective
    bargaining has decreased.

  • Demand and supply for labour: Like any other factor of production, when the labour
    supply is scarce, it also becomes expensive and hence the employers who can
    reward more are the only ones who would be able to recruit and retain. In an ideal
    situation, the pay package should strike a balance between the employee and
    employer expectations. However, although common sense would dictate that
    rational means should be used to reward staff, quite often decisions on rewarding,
    particularly in public service, depend on a rule of thumb even if salary commissions
    may have been created to advise the government on the pay structure.

  • Job evaluation: It appears quite logical that fairness in rewarding job should be the
    most important concern of employers and employees. The fairness can mostly be
    achieved by objective evaluation of the worthiness of a particular job relative to
    others and hence reward accordingly. ACAS (1984) has defined job evaluation quite
    well saying that it is concerned with assessing the relative demands of different jobs
    within an organisation in order to provide the basis for comparing jobs and hence
    pay.


There are different job evaluation methods, some of which are highly judgemental while
others are more systematic and rational, although some kind of value judgement is not
easy to eliminate completely (Torrington et al. 2005; Hook & Foot 2008. The most
common job evaluation methods are:



  • Job ranking. Comparing the job as whole rather than different aspects of the job. For
    example, a job of a senior economist with procurement manager or chief internal
    auditor.

  • Job grading/classification. In this case, jobs are assigned grades e.g. A, B, C etc. by
    taking into account key skills, competencies and responsibilities required by the job
    to be done effectively.

  • Grade. A job may be the one with just simple tasks which do not require higher edu-
    cation or experience.

  • Skill-based evaluation. This is a method that grades jobs according to the level of
    skills or expertise required in performing those jobs. The method focuses on
    individuals and the inputs they are capable of providing. Therefore, skills compared
    between different jobs are the main decisive factors in determining the worthiness of
    a particular job against another.

  • Competence Approach (Harris 2005). Measuring the size of jobs by preference to
    the level of competence required for the accomplishment of performance and which
    include attributes such as:

    • Ability and willingness,

    • Leadership,

    • Innovation,

    • Creativity,

    • Risk taking,

    • Team working, and



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