Human Resources Management

Job Evaluation and Compensation Management in Tata Steel

Amitabh Anand 4C

Neha Mishra 25C

Gautam Babbar 12C

Samik Goshal 38C

Gyan Bhaskar Maithani 13C

Shraddha Jha 45C

Kshitij Aggarwal 18C

Utkarsh Modi 52C

Comparing
jobs to
develop a job
structure
Choosing
and
assigning
decision
makers,
reaching and
recording
decisions,
and setting
up the job
hierarchy

Wage Structure

The method
should permit
consistent
placement of
the
organization'
s jobs
containing
more of the
factors
higher in the
job hierarchy

Job Structure

Choosing
compensable
factors is the
heart of job
evaluation
Factors that
place define
relative job
hierarchy
Serve to
inform
incumbents
which
contributions
are rewarded

Developing the
Method

Study of the
jobs in the
organization.
To gather
information
on job
content and
worker
requirements
Information is
recorded in
the precise,
consistent
language of a
job
description

Compensable
Factors

Job Analysis

HR Job Evaluation Process

Pricing the
job structure
to arrive at a
wage
structure
Strictly
speaking,
this step is
not part of
job
evaluation

Job Evaluation Methods

Methods

Dimensio
ns

Ranking

Classifica
tion

Point Plan

Factor
Comparis
on

Qualitative

Qualitativ
e

Quantitati
ve

Quantitati
ve

Job-to-Job

Job-toStandard

Job-toStandard

Job-toJob

Total Job

Separate
Factors
Comparis
on

Separate
Factors
Comparis
on

Total Job

Critical Factors in Job Evaluation

Compensation Management

Choosing Compensable Factors

1. Must be present in all jobs.
2. Need to be definable and
measurable.
3. The factor must vary in degree.
4. No overlap in meaning.
5. Employer, employee, and union
viewpoints should be reflected in
the factors
6. Must be observable in the jobs
7. Need to fit the organization

A Look at Job Evaluation and

Compensation Management at Tata
Steel
Performance Appraisal
Assesses performance against
previously agreed work objectives
Annual exercise to assess key
result areas of their employees,
workers and supervisors
Joint responsibility; every
individual in TISCO are co-prime
to each other
Compare performance and
potential between employees
and subordinates of the same
rank
Performance-based Rating - Very
Good, Average, and Average to
Medium and Below Average
Highest reward of the year given
to best suitable worker.
Better performers the majority of
available merit pay increases,
bonuses, and promotions

Job Evaluation
1. MD and full time Directors
reviewed by the Remuneration
Committee of the Board
2. Annual Variable Pay linked to
the performance of the
Company in general and their
individual performance for the
relevant year measured against
specific Key Result Areas
3. Remuneration Policy of the
Company, details of
remuneration, resolution of
conflicts, Whistle Blower Policy
available in public domain in the
Annual Public Reports
4. Assured access to the Ethics
Counsellor/ Chairman of the
Audit Committee

Aims of Tata Steel's

Performance
Management System
1. Synchronise
workforce and
Company
activities,
behaviour, values
and objectives
2. comprehensively
assess
performance and
groom
3. Develop corporate
culture
4. Enhance line
management
relationships

EVA Compensation

Management technique developed by the Stern Stewart & Company consultant group
EVA emphasizes the residual wealth creation in a company after all costs and expenses have been
charged including the firm's cost of capital invested
EVA = NOPAT (D + EBV) (WACC)
Advanatges:
It helps in reducing agency conflict and improve decision making
It is more strongly associated with stock return than other measures
It improves stock performance
It adds more informational content in explaining stock returns
Compensation:
Setting performance standards for management incentive compensation plans
EVA incentive compensations are based not only on the year increase in EVA, but on the increase that is
above expected EVA improvement
Motivate managers to make decisions that will create superior performances

Compensation

Employee

Value
Addition

Department

Value
Addition

Enterprise

Management
40%

60%
50%
40%

Performan
ce

E.V.A.

Top Level

50%
60%

Bottom
Level

Fixed

Union
Compensation through
collective bargaining
process

Compensation
Hierarchy