It facilitates wage survey and comparison of different wage structures. It also helps the management to usher sound salary administration by evaluating the employee in terms of job and to prepare the guidelines for promotion. It provides objectivity in salary administration.
It forms a basis for fixing incentives and different bonus plans.
Job evaluation assists in specifying functions, authority and responsibility.
Job evaluation serves as a useful reference for setting individual grievances regarding wage rates.
Job evaluation helps in eliminating the drawbacks from the salary and wage administration for instance the persons holding high position and drawing high salaries where equivalent skill is not required or giving increased salary to unworthy employees or wage differentials in closely related jobs etc.
It provides a benchmark for comparing job structures and facilitates career planning.
Job evaluation is a logical process and valuable technique available to the management that helps in preparing a consistent wage and salary structure. These salary structures of various organisations can be compared to know the relative consistency. These comparisons lead to equality in wage structure.
Job evaluation leads to eliminating wage differentials within the industry. This makes employees’ union happy and promotes healthy and harmonious labour relations. It minimizes conflict between labour and management.
In the modern times of mechanization, job evaluation provides the realistic base for determination of wages.
Job evaluation is a standard process of knowing relative worth of each job. If process is uniformly applied to evaluate each job, then it will make determination of wage differentials for various jobs quite easy. It makes wage rates uniform and helps making wage administration simple.
Job evaluation takes into accounts the factors like risk, working conditions along with skill, competence, knowledge etc. to determine relative worth of jobs. The jobs cannot be therefore differentiated on the basis of skills alone. Hence determining wages based on rational factors.
Job evaluation rates the job not the man. There exist a number of jobs as a result of division of labour or specialization. Large organisations have thousands of jobs needing the same number of persons for their performance. Job evaluation helps in rating all these jobs and fixing the wages and removing ambiguity.
Job evaluation is a systematic activity undertaken after making job analysis and job description. The information is utilized for evaluating jobs. Only those jobs are evaluated which are prescribed by job analysis. This makes acquisition of required number of human resources only and not in excess. This reduces the cost to be incurred on acquisitions in absence of job evaluation.