JOB EVALUATION

A job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs in
an organization. It tries to make a systematic comparison between jobs to assess their relative worth for
the purpose of establishing a rational pay structure.

Job Evaluation is a systematic process of determining the worth of one job in relation to another job in
the organisation. During job evaluation, the relative worth of various jobs are assessed so that wages
can be paid depending upon the worth of the job.

The main characteristics of job evaluation

1. It is a method with a systematic approach.

2. It is an analysis of the work involved in its starting point.

3. It is an attempt to determine the requirements of the work involved for any incumbent.

4. It is a process by which jobs in an organisation are appraised.

5. It is a process of analysing and describing positions, grouping them, and determining their
relative value by comparing the duties of different positions in terms of their different
responsibilities and other requirements.

6. It is a system to deal exclusively with assessment of the job and not concerned with employees
assigned to the job.

7. It is designed only to establish wage differentials and is not concerned with the absolute wage
level.

Job Evaluation – 7 Main Objectives .

The objectives of job evaluation

1. To secure and maintain complete, accurate and impersonal descriptions of each distinct job or
occupation in the entire plant.

2. To provide a standard procedure for determining the relative worth or value of each job in a
plant.

3. To determine a rate of pay for each job which is fair and equitable with relation to other jobs
in the plant, community and industry.

4. To ensure that like wages are paid to all qualified employees on like work.
5. To promote fair and accurate consideration of all employees for advancement and transfer.

6. To provide a factual basis for the consideration of wage rates for similar jobs both within the
community and within the industry.

7. To provide information for the work organisation, employee’s selection and training and
numerous other important purposes.

Job Evaluation – Significance

Job evaluation is a valuable tool that helps in achieving wage rate consistency as well as
developing good industrial relations.

The significance of job evaluation can be determined through the following points:

i. Taking account of all the factors that are useful in determining wages and salaries

ii. Maintaining harmony between the union and the management

iii. Standardizing the wage determination process

iv. Compensating the employees as per the requirements of the job to avoid biasness and
promote equality in payment of wages

v. Minimizing the cost of recruitment.

Job Evaluation – Pre-Requisites for Effective Job Evaluation

Job evaluation is a vital function of HRM as it helps in deciding the compensation structure in
the organization. Before conducting the job evaluation, you should ensure that requisites for job
evaluation are in place.

These requisites are as follows:

i. Determining the job system and design

ii. Facilitating participation of recognized unions

iii. Ensuring simplicity in job evaluation system

iv. Ensuring that market surveys are carried out successfully before job evaluation
v. Assuring that the committee has representatives from all the parties, labour, staff, and
management

vi. Encouraging active participation from each member

vii. Communicating clearly the objectives of job evaluation process

viii. Facilitating the hiring of outside professionals to bring expertise to the process.

ix. Availability of job analysis information, i.e. job description and job specification.

x. Job evaluation system should be simple and easy to understand.

xi. The job evaluation system should be taken as an adjustment to collective bargaining.

xii. Active involvement of a trade union and employees is essential.

xiii. Availability of industry rates (through labour market survey) to know the prevailing salary
rates.

xiv. Selection of groups of employees and jobs to be covered by the evaluation system.

xv. Proper communication of objectives and implication of job evaluation to employees and
unions to avoid any misunderstanding.

xvi. Involvement of outsider experts/consultants such as specialists from National Productivity

Council, administrative staff college of India, etc. These people have a rich experience in job
evaluation.

Job Evaluation – 4 Important Steps Involved: Job Analysis, Job Documentation,

Rating the Job and Creating the Job Hierarchy

Job evaluation typically, involves four steps:

1. Job analysis;

2. Job documentation;

3. Job rating using the organisation’s job evaluation plan; and

4. Creating the job hierarchy.

Step # 1. Job Analysis:

Job analysis is the process of collecting and evaluating relevant information about jobs. The data
collected should clarify the nature of the work being performed (principal tasks, duties, and
responsibilities) as well as the level of the work being performed. Information should include the
types and extent of knowledge, skill, mental and physical efforts required, as well as the
conditions under which the work is typically performed.

Step # 2. Job Documentation:

Job documentation is the process of recording job content information, usually in the form of a
written job description, one of the most important products of job analysis. Most job description
of the duties, examples of work typically performed, and a statement identifying the knowledge,
abilities, skills, and other characteristics (KASOCs) that are required to satisfactorily perform the
duties. The ideal job description for compensation reflects not just information concerning
“what” a job does, but also the “how” and “why” the duties.

Step # 3. Rating the Job:

In the third step, a job’s assigned duties are assessed using the job evaluation plan, or instrument
selected by the organisation.

Discussions about job evaluation approaches focus attention on three basic models:

a. Job ranking,

b. Job classification, and

c. Point factor plans.

a. Job Ranking:

This method typically looks at whole jobs, rather than their component parts, and gives little
attention to the particular collection of tasks that comprise any single job. In addition, the basis
for comparison is limited to the other jobs in the organisation. No attempt is outside the
organisation.

Two approaches to this method are most common – (i) alternation ranking; and (ii) paired
comparison. Alternation ranking involves ordering the positions alternatively each extreme. For
example, beginning with a list of 15 jobs, evaluators try to agree on which is the most valuable
among the collection of jobs, then which job is the least valuable. In the next round, evaluators
will try to agree on which of the remaining 13 jobs is the most valuable, then which is the least
valuable. This alternating process continues until all jobs have been ranked and a hierarchy of
jobs has been developed.

In the paired comparison approach, each job is evaluated by comparing it with every with other
job (one at a time). For each two position comparison, the more valuable job is given a score of
and when all the possible comparisons have been made, the hierarchy of jobs is developed by
counting the number of times that a job was awarded.

Although it is the simplest method, ranking is seldom the recommended approach. The ranking
criteria are usually inadequately defined so that the resultant hierarchy is difficult to explain to
employers. In addition, since the approach focuses on the total job, often the highest level duty
becomes the basis for the evaluation.

b. Job Classification:

The classification System is relatively inexpensive and easy to administer. But as the number and
diversity of position grow, it is increasingly difficult to write level descriptors in advance that
will cover the full range of jobs. Without this specificity, the classification method becomes
ambiguous and difficult to communicate to workers. In addition, like the ranking method, it is
difficult to know how much difference exists between job levels.

Finally, in any whole job rating system, one must be cautious about the same type of rather
errors that can creep into performance appraisal. For example, a halo-type error might be one
particular component of a position such that he or she assigns the entire job to a grade level that
might not be warranted, particularly if the job involves considerable work of a routine nature.

c. Point Factor Method:

Under a point factor plan, various factors are the basis for determining relative worth. Factors are
the specific characteristics of jobs that will be measured. In choosing factors, the organisation
decides – “what particular job components do we value? What job characteristics will we pay
for?” Mental effort, responsibility, complexity of works physical demands, skill required, and
working conditions are the most common factors. Factors chosen by a company for use in a job
evaluation plan should be for four characteristics.

-1)First, they should represent the job characteristics for which the company is willing to pay. -
2) Second, they should be present to varying extent in the jobs to be evaluated. Unless they vary
across the population of jobs, there is no point in viewing them as distinguishing features of jobs.
-3)Third, they should represent factors that comply with the equal pay act’s skill, effort,
responsibility, and working conditions framework.

4) Finally, the factors should be business related; that is, they should support the organisation’s
culture and values, its chosen strategy and direction.

Once the factors are identified and described, they should be weighted because all factors are not
equally important to an organisation. Typically, factors such as responsibility, decision making,
and mental effort are more heavily weighted than physical effort or working conditions. Next,
factor scabs must be constructed. Factor scabs are statements of the degree to which the factor is
present in any given job.
Factor – Physical Requirements:

This factor appraises the physical effort required by a job, including its intensity and degree of
continuity. Analysis of this factor may be incorrect unless a sufficiently broad view of the work
is considered.

Degree:

1. Light work involving a minimum of physical effort requires only intermittent sitting, standing,
and working.

2. Repetitive work of a mechanical nature, small amount of lifting and carrying, occasional
difficult working positions, almost continuous sitting or considerable moving around.

3. Continuous standing or walking, or difficult working positions, working with average- weight
or heavy materials and supplies, fast manipulative skill in almost continuous use of machine or
office equipment on paced work.

A higher degree rating for a job translates into a greater number of job evaluation points.

organisations combine elements from each of these approaches to create a hybrid, or

combination, approach. Regardless of the method used, job evaluation ratings are typically done
by a committee of persons knowledgeable about the jobs under study, with different committees
charged with the evaluation of different job families.

Step # 4. Creating the Job Hierarchy:

The result of a job evaluation plan is a hierarchical ordering of jobs in terms of their relative
worth to the organisation. Whether it is created by totalling the points assigned to each position,
the resulting top-down list should reflect an ordering of position that makes sense to and is
meaningful for a particular organisation.

Before finalising this hierarchical list, it is important that the evaluation be studied carefully in
relation to another. Consider this something of a “Sore throbbing” process that looks at the final
results of the job evaluation and identifies positions that don’t appear to fit best where the job
evaluation plan has placed them.

The purpose of a compensation plan is not only to create an internally equitable programme, but
also one that is externally competitive. The next step is to consider market place pay practices to
that the organisation may effectively complete for workers.

Job Evaluation – Methods: Non-Quantitative and Quantitative Methods (With

Examples)
1. Non-quantitative or summary system that utilise non-quantitative methods of listing the jobs-

(a) Ranking System

(b) Grading or Job Classification System

2. Analytical or Quantitative System that use quantitative techniques in listing the jobs-

(a) The Points System

(b) The Factor Comparison System

Method # 1. Ranking System:

Under this system, all the jobs are arranged or ranked in the order of their importance from the
lowest to the highest or in the reverse order. The jobs can be rated within the department or a
cluster of jobs from different departments can be considered for rating. Job description may be
used for ranking different jobs.

Example:

Ranking of teaching job in a college (in the ascending order) like Lecturer, Assistant Professor,
Associate Professor, Professor, Senior Professor and Head of the department or ranking of all the
jobs which includes both teaching and administrative staff (peons, clerk, head clerk, assistant
registrar, registrar and teaching staff) in the college.

The rating is done by a committee of raters and about 10-20 key jobs are rated and other jobs are
compared with the key jobs. The ranked jobs are classified into say 8-12 groups. All the jobs
under a particular group may receive the same salary or salary range. Example – The Registrar
and the Associate Professor may receive the same salary or come under same salary range.

Advantages of Ranking System:

The system is simple, easy to understand and easy to explain to the employees. It require less
time, less work and is less expensive.

Disadvantages:

There is no defined criteria for rating the jobs and the rating is based on judgement of the raters.
The rating may be influenced by bias/favouritism. The systems only ranks the jobs and does not
indicate the exact differences between one job and the other.

Method # 2. Job Classification or Grading:

A number of predetermined grades or classifications are determined by a committee of raters.

The jobs are assigned to the grade or class. After detailed job analysis, jobs are grouped into
various classes or grades which indicate different pay levels. For each grade/class, there is
detailed description so that the employees assigned to particular grade or class. Grade description
is based on several factors such as education, independent working, knowledge, skills, attitude,
leadership qualities, decision making ability etc.

Example:

If there are five hundred employee holding different jobs, the jobs can be grouped into six to
eight classes or grades, i.e., grade 1 to 6/8 arranged from high to low, together with grade
descriptions. Jobs at low level (Grade 8) involve routine and repetitive work, works under close
supervision.

Grading system is advancement over ranking system and it is also based on judgement of the
raters. It is rather difficult to write grade descriptions as the number of jobs increases. This
system is used in Government and less in the industry.

Method # 3. The Points System:

The Points System is one of the widely used job evaluation plan. The points system involves
identifying a number of job factors and sub-factors and then determining the degree to which
these factors are present in the job. Points are assigned for each degree of each factor. The
number of points for each factor is added to obtain overall points. The sum of these points gives
an index of the relative importance of the jobs that are rated. Money values are assigned to each
of the jobs, based on the total value of each job.

Example:

Hay Profile Method developed by Edward N Hay is one of the well-known job evaluation
methods. The Hay method makes use of three key factors i.e. Know-how, Problem solving
ability and Accountability for evaluation of job position.

Advantages of Points System:

(a) It is more systematic and objective than other systems.

(b) It provides numerical basis for job classification and wage differentials.

(c) Bias/favouritism minimised.

(d) A large number of jobs can be evaluated and the jobs can be placed in distinct categories.

(e) Once the factors, sub factors and points are developed, they can be used for a long time.

(f) Acceptance is better than other systems.

Limitations:
(a) It is time-consuming and expensive process.

(b) Employees find it difficult to understand the working of this method.

Note:

Skill – Job factor, Education- Sub-job factor and the points are assigned as shown below-

College education- 40 points, High School- 32, Middle School- 24, Primary School- 16 and Read
and Write- 8

Method # 4. The Factor Comparison Method:

Here, the analyst or committee selects some key jobs for which job descriptions and wage rates
are agreed upon and are acceptable to the workers and management. Each job is ranked several
times, once for each of the job factors selected.

Example- Each job is ranked for skill requirement, and then ranked for responsibility and so on.
Then these rating are combined for each job to obtain overall numerical rating for each.
Process of Job Evaluation:

It is a systematic process of evaluating the worth of a job in relation to other jobs in the
organisation. HR has to take initiative in developing and implementing an appropriate job
evaluation programme in consultation with senior managers in the organisation.

The following factors have to be considered for successful introduction of the system:

a. The management has to explain the objectives and advantages of the job evaluation
programme and seek the acceptance of employees and the trade union.

b. A committee comprising of HR manager and senior managers are to be formed and they
should receive adequate training well in advance.

c. Selection of the most appropriate job evaluation system.

d. The committee has to decide about the different jobs to be evaluated.

e. Written job analysis document will provide adequate information about each job and each job
has to be thoroughly studied.

f. Grading/classifying the jobs based on relative worth of each job.

g. Explain to the employees the outcome of the job evaluation programme and clarify doubts if
any.

h. Make changes, if required, based on the feedback.

i. Prepare a document giving the details of the job evaluation process and the worth of each job
in the organisation for the purpose of salary fixation, recruitment, selection and promotion.

j. Periodical review to keep it updated.

Job Evaluation – Implementation of Job Evaluation

The evaluated job structure has to be translated into a structure of wage rates.

This depends upon the following things:

(i) The range of wages to be paid, i.e., what should be the maximum and minimum wages for the
grade.

(ii) Should there be any overlapping between pay ranges for adjacent pay grades? If so, by how
much?
(iii) How many grades should be used?

(iv) On what basis will an individual employee be advanced in wages through the established
pay large for the grade?

Job Evaluation – An I.L.O. Publication Claims Following Advantages for Job

Evaluation

1. Job evaluation is a logical and, to some extent, an objective method of ranking jobs relative to
one another. It may help in removing inequalities in existing wage structures and in maintaining
sound and consistent wage differentials in a plant or industry.

2. In the case of new jobs, the method often facilitates fitting them into the existing wage
structure.

3. The method helps in removing grievances arising out of relative wages; and it improves
Labour- management relations and workers’ morale. In providing a yardstick, by which workers
complaints or claims can be judged, the method simplifies discussion of wage demands and
enables differences in wages to be explained and justified.

4. The method replaces the many accidental factors, occurring in less systematic procedures, of
wage bargaining by more impersonal and objective standards, thus establishing a clear basis for
negotiations.

5. Such information also reveals that workers are engaged in jobs requiring less skill and other
qualities than they possess, thereby pointing to the possibility of a making more efficient use of
the plant’s Labour.

6. The information collected in the process of job description and analysis may also be used for
the improvement of selection, transfer and promotion procedures on the basis of comparative job
requirements.

7. The method may lead to greater uniformity in wage rates, thus, simplifying wage
administration.

Job Evaluation – Limitations

Following are the limitations of job evaluation:

(1) A job evaluation frequently favours groups different from those which are favoured by the
market. This is evident from the observations of Kerry and Fishers. They observe, the jobs which
tend to rate high as compared with the market are those of janitor, nurse and typist, while craft
rates are relatively low. Weaker groups are better served by an evaluation plan than by the
market; the former places the emphasis not on force but on enquiry.

(2) Substantial differences exist between factors and the factors emphasised in the market. These
differences are wider in cases in which the average pay offered by a company is lower than that
prevalent in other companies in the same industry or in the same geographical area.

(3) Though many ways of applying the jobs evaluation technique are available, rapid changes in
technology and in the supply and demand of particular skills have given rise to problems of
adjustment. These need to be probed.

(4) Higher rates of pay for some jobs at the earlier stages than, other jobs or the evaluation of a
higher job higher in the organisational hierarchy at a lower rate than another job relatively lower
in the organisational hierarchy often given rise to human relations problems/and lead to
grievances among those holding these jobs.

(5) Job factors fluctuate because of changes in production technology, information systems, and
division of labour and such other factors. Therefore, the evaluation of a job today is made on the
basis of job factors, and does not reflect the time job value in future. In other words, continuing
attention and frequent evaluation of a job are essential.

(6) When job evaluation is applied for the first time in any organisation, it creates doubts and
often fears in the minds of those, whose jobs are being evaluated. It may also disrupt the existing
social and psychological relations his.

(7) Job evaluation takes a long time to install, requires specialised technical personnel, and may
be costly.

(8) When job evaluation results in substantial changes in the existing wage structure, the
possibility of implementing these changes in a relatively short period may be restricted by the
financial limits within which the firm has to operate.

(9) A large number of jobs are called red circle jobs. Some of these may be getting more and
others less than the rate determined by job evaluation.

Job Evaluation – Measures for the Success of Job Evaluation Programme

The following measures may be adopted:

(1) Supervisors as a group should receive a thorough training in advance of the actual
introduction of the plan to enable them to explain the policies, principles and procedures to
anyone who wants to understand them.
(2) Whatever plan or system is selected for each group will arouse some fears or apprehensions.
To overcome these, the details of the administration of the plan should be as simple as possible,
and the management should endeavour to involve a broad range of employees from a number of
departments.

(3) Supervisors should have full knowledge of the system. They should understand it; and be
able to explain to their people the purpose of the plan and how it works. They must accept the
desirability of the plan, for if they are not convinced that it is useful, they will certainly not be
able to convince the employees.

(4) The management must give the widest publicity to every phase of the programme, utilising
employee publications, notice boards, departmental meetings and letters to employees homes.

(5) Separate pay structures should be maintained for major groups of employees. For example, it
would be difficult to work out a plan equally applicable to factory workers, office workers,
salesmen, and departmental heads. The wages that are offered must be at or about the prevailing
rate in order that there may be a successful competition for capable people.

According to the findings of the International Relations Sections of the Princeton University, the
following conditions are necessary for the successful operation of a job evaluation programme.

(1) It must be carefully established by ensuring that – (a) the management’s aims are clear to all
concerned and that not only the manual workers but also all levels of supervision and
management employees fully understand its implications; and (b) all the relevant internal and
external factors have been taken into account in arriving at the final form the scheme.

(2) The importance of factors, other than job content, in wage rate determination (employment
market conditions, sex, wage differentials, geographical wage differentials, and the relative
bargaining power of the management and the trade union) must be recognised and taken into
consideration while launching a job evaluation programme.

(3) Adequate administrative control must be set up to ensure – (i) a centralised co-ordination of
the scheme; (ii) the evaluation of new and changed jobs; (iii) a proper control of individual rate
ranges; and (iv) the conduct of wage surveys to provide the necessary information about the
intra-plant ranges.

(4) It must have obtained the acceptance of trade unions.

(5) It must have the full approval and continued support and backing of the top management.

(6) Before launching a job evaluation programme; certain issues should be decided beforehand,
There are – (i) which category of employees are to be covered (i.e. whether hourly paid job or
salaries job employees) and upto what range? (ii) who will evaluate a job outside consultants or
trade analysts or the personnel of the personnel department? (iii) how will the employees be
consulted in regard to the method of putting the programme through? add (iv) does a proper
atmosphere exist for launching of the programme?
The following measures and steps for improving the working of evaluation programmes:

1. The details of a scheme should be drawn up in such a way that they do not conflict with other
provisions of a Collective Agreement such as for example, seniority clauses and grievance
procedure.

2. A job evaluation scheme should be chosen cautiously. It should be devised and administered
with due regard to the conditions of the employment market, which cannot be ignored if the
scheme is to be successful. It should, therefore, reflect the forces. Which are important in the
market, e.g., relative supply of and demand for labour, bargaining power of the parties and job
conditions.

3. The scheme should be introduced on a plant-to-plant basis than applied to a whole industry.
This is because it is difficult to standardise jobs throughout an industry unless the plants in it are
so familiar that they can be treated as being virtually a single firm.

4. It is of major importance that the number of job titles and classifications be kept to a
minimum. If they are not, a scheme becomes too inflexible because of the narrow coverage of
the job descriptions. Promotion is within a grade become more serious. Moreover, workers tend
to feel more insecure and cling to their present jobs because they may not have the qualifications
for another job.

5. Any anticipated changes in methods should be carried out before a scheme is installed and all
modifications in it should be resisted until it becomes fully established.

6. The better the state of industrial relations the easier it is to introduce a job evaluation scheme.

7. In preparing job descriptions it is sound practice to emphasise in them the things which make
on job different from another rather than to find a comprehensive statement all the duties of the
jobs.

8. The scheme should be sold to all concerned and suggestions sought. If the workers in a plant
are unionised, it is highly desirable that any scheme adopted should be agreed to and, if possible,
develop jointly by the company and the trade unions.

9. A scheme which provides for single rates and for definite ratios between the rates for classes
of workers (A, B,C, etc.) within a job grade is easier to administer than one which establishes
rate ranges and has no fixed ratios.

10. A scheme is better administered by the Industrial Relations staff of a company than by the
Industrial Engineers, who may have developed it. The essence of successful administration of a
scheme is flexibility, and this is better understood by those engaged in industrial relations work
than by Industrial Engineers.
ADVANTAGES AND DISADVANTAGES OF JOB EVALUATION

They are:

ADV

(i) It is a logical and to a certain extent an objective method of ranking and grading the jobs.

(ii) It helps to fit the newly created jobs in the existing structure.

(iii) Employee grievances, doubts and complaints would be at the lower ebb as it is a systematic
and objective method of wage fixation.

(iv) It eliminates some undesirable factors like in qualities in bargaining capacities of employees
and employers, fluctuations in market rates etc.

(v) It satisfies the principles of fair wage, wage equity, uniformity in wages etc.

(vi) It helps to redesign the jobs for minimising wide wage differentials.

(vii) It ensures employee satisfaction about wage level and wage equity.

(viii) It also helps to redesign the jobs by reallocating the easy and difficult tasks equally among
various jobs.

Disadvantages of Job Evaluation:

The following are some serious disadvantage in job evaluation technique:

(1) It is a systematic and not a scientific technique:

In rewarding the job, it lacks scientific precision because all factors cannot be measured
accurately.

(2) There is no standard list of factors:

Too many factors are used in job evaluation and moreover there is no standard list of factors to
be considered. Definitions of factors vary from organisation to organisation. Many researches
show that the factors used may not independently be valued at all.
(3) Nature of jobs differ though they are allotted the same grade:

It presumes that jobs of equal worth will be equally attractive to all employees but in practice, it
is not true. If a job offers bright prospects of rise, more people will be attracted in comparison to
a job having no prospects of rise though both are equally rated by job evaluation process.
Therefore, a job having no prospects of rise should offer higher wages in comparison to a job
having better chance of progress.

(4) Individual merit is ignored:

There is a strong feeling among the workers that individual merit should also be rewarded. So
some kind of Merit Rating Scheme has to be super-imposed upon the evaluated rates. If
individual abilities are not taken into account, some workers will always try to adjust themselves
elsewhere. Thus, it will increase the rate of labour turnover.

(5) Too much reliance on internal standards and wage rates in industry or region are
ignored:

Job evaluation tends to be inflexible is so far as it does not give right weightage to rates prevalent
in the industry or region as whole. It relies too much on internal standards and evaluation for
fixing wage rates.

(6) Some of the techniques of job evaluation are not understandable by workers hence it
has been opposed:

Job evaluation is regarded by the Trade unions with suspicion because it is made on certain
principles and results are generally ignored. Moreover, some of the methods particularly ‘Point
Method’ and ‘Factor Comparison Method’ are not easy to understand by the workers and
moreover they fear that job evaluation will do away with collective bargaining.

(7) Job evaluation is no answer to all wage problems:

It does not offer any answer to wage problems because it says nothing about the absolute size of
wage differentials appropriate to the evaluated job structure. It presents only the comparative
worth of the job within the organisation.

(8) Limitations of evaluators also affect the technique:

Job evaluator should not be ignorant of the techniques and principles of job analysis, job
classification and grading of jobs otherwise, it will affect the results of the evaluation. Moreover,
if evaluator is biased to a particular job he will not allot more weightage to the job.

(9) It is unrealistic because labour market conditions are ignored: