7 What are the principal negative considerations that should

7. ()What are the principal negative considerations that should be understood prior to the installation of a point job evaluation plan? (ii) What are the principal benefits of a properly installed job evaluation plan? (ii) Explain the characteristics of the following direct financial plans: (a) piece work, (b) standard hour plan, and (c) measured day work. Which incentive plan is most commonly used in industry, and why?

Solution

7 (i) Principle negative considerations that should be understood prior to installation of a point job evaluation includes the following – (a) A point job evaluation can lead to power relationships that are totally undesirable as well as unnecessary. The power relationships come into existence due to the fact that point job evaluation leads to creation of pecking orders and these pecking orders hampers cooperation within the group as well as decision making within the group.

(b) Few employees may refuse to perform certain tasks if job description is not worded and spelled out carefully. This is because of the fact that these tasks are not included in the job description. (c) Many individuals add unnecessary work just to increase their job evaluation points by increasing their responsibilities. This may lead to additional overhead expenses for the company.

(ii) Primary benefits of a properly installed job evaluation plan are – (a) adjustments of salary structures in an appropriate manner. (b) Easy identification of potential managerial candidates within the organization. (c) Development and expansion of talent pool by identifying those employees whose capabilities extend beyond their current job functions.

(iii) (a) Piece work is the plan in which employees are paid for each unit produced by them. (b) Standard hour plan calls for payments using pre-established standards. Fixed unit of time is established for completion of a task or a job and wages are paid to workers as per the standard unit of time with regards to completion of a task. Actual time taken or needed is ignored. (c) Measured day work – Under this plan wages are paid on the understanding that a specific level of work performance will be maintained by the employees. In other words output is not considered while paying wages but employees are expected to attain a production standard.

The incentive plan that is most commonly used in industry is the piece work plan. This is because in the piece work plan there is a strict proportionality between the results and the rewards.