Job Pricing
This article covers meaning, importance & example of Job Pricing from HRM perspective.
What is Job Pricing?
Job pricing can be defined as the process to determine the optimum pay values or wages depending on the job that the employees are performing in the organization compared to internal as well as external factors.
Job pricing takes into account the job description, the relative industry and regional values, market values etc. and analyze the data to decide on to an appropriate pay or salary value.
Importance of job pricing
Employees are the most important asset for a company. If the employees are motivated and work towards the goal of the company then the company would grow. Now the wages and salary of the employee is very important in retaining them. Job pricing helps determining the optimum value of the wages which should be paid for a particular job role and position.
The job pricing is one of the methods of job evaluation. The optimum salary and wages value should be determined precisely based on the criticality of the job, external environment, employee performance etc. External analysis is very critical. If the salary and wages for a particular role is less as compared to other similar companies and across industry then the employee would not feel valued. This can lead to attrition. Job pricing becomes very important in keeping the workforce motivated and salaries at optimum industry level.
Example of Job Pricing
A manager's salary across industry would be at a certain level in different organizations. Irrespective of which company or industry a manager is working. In a particular country, the entry level manager salary and wages would be at a certain level of parity. Variations would be there as per employer and the talent level of the candidate but the variation would be at a certain level. The median or the mean salary would be at a optimum level. But it may vary in different countries or regions within the same country.
Hence, this concludes the definition of Job Pricing along with its overview.
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