What is a disadvantage of market-based job evaluation?

What is a disadvantage of market-based job evaluation?

• A. High alignment with internal equity
• B. Dependency on job performance
• C. Difficulty obtaining sufficient data
• D. Ease of employee communication

Answer: (C)

A significant disadvantage of market-based job evaluation is the difficulty in obtaining sufficient data. This approach relies heavily on accurate and comprehensive salary data from external sources, such as industry surveys, which can be challenging to acquire. If the data is sparse or not reflective of the true market conditions, it can lead to misaligned compensation structures and potential inequity among employees. Accurate market data is essential for establishing competitive pay rates; without access to robust and reliable information, organizations risk underpaying or overpaying employees relative to their market value. Furthermore, variations in compensation practices across different geographic regions, industries, or job functions can complicate the process of gathering relevant data, making it harder for an organization to make informed decisions based on comprehensive market insights.

A significant disadvantage of market-based job evaluation is the difficulty in obtaining sufficient data. This approach relies heavily on accurate and comprehensive salary data from external sources, such as industry surveys, which can be challenging to acquire. If the data is sparse or not reflective of the true market conditions, it can lead to misaligned compensation structures and potential inequity among employees.

Accurate market data is essential for establishing competitive pay rates; without access to robust and reliable information, organizations risk underpaying or overpaying employees relative to their market value. Furthermore, variations in compensation practices across different geographic regions, industries, or job functions can complicate the process of gathering relevant data, making it harder for an organization to make informed decisions based on comprehensive market insights.