(New) Pricing a job

January 11, 2022
by Noriyuki Morimoto

Salaries and other forms of compensation by a company are given in turn for some kind of achievement. Since achievement is the result of some kind of work, it is, in essence, paid for work that leads to achievement. However, it is impossible to know in advance which work will actually lead to achievements. Therefore, from the aspect of expectations prior to performance, compensation is based on certain behaviors that lead to results, and it is always subject to later adjustment based on the actual results as compensation for work that led to the achievements.

That said, for jobs where the relationship between work and achievement is predictable, treatments can indeed be compensation for work achievements. For example, there are specialized professions where objective evaluation of work performance can be established. Legal and accounting are typical examples of such positions that exist in any company.

Also among positions particular to the company, there are areas that require long-term experience and accumulation of knowledge, such as R&D, manufacturing, sales, and data processing. For this type of job, many companies have established professional job hierarchies and treatment schemes based on the level of expertise, difficulty of the job, and average treatment in the industry for similar jobs. In other words, the jobs are given price tags.

On the other hand, for tasks that can be standardized and therefore simplified, it is much easier to price the work. With the introduction of advanced mechanization in physical labor and advanced information processing technology in intellectual work, it is now possible to break down an entire complex series of tasks into smaller, simpler tasks.

As the range of work possible to be priced expands, the results of work can be predicted in advance with a high degree of accuracy, so that treatment approaches become virtually equal to compensation for the achievements of work. This is very convenient for companies in improving the efficiency of their operations.

 

[Category /Human Capital Investment]

Profile
Noriyuki Morimoto
Noriyuki Morimoto

Chief Executive Officer, HC Asset Management Co.,Ltd. Noriyuki Morimoto founded HC Asset Management in November 2002. As a pioneer investment consultant in Japan, he established the investment consulting business of Watson Wyatt K.K. (now Willis Towers Watson) in 1990.