Job evaluation involves evaluating jobs in terms of determining rates of monetary compensation that is worth of all the jobs.
In general the more difficult the job, the more is its worth. The higher the worth of the job the more are the requirements of skill, education and responsibility in a job.
The basic procedure of job evaluation rates to the comparison of the contents of jobs in relation to one another, with reference to their skills or responsibility or some other requirement.
The steps involved in the process of job evaluation are:-
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1. Gaining Acceptance 2. Creating Job Evaluation Committee 3. Training for Job Evaluation 4. Finding the Jobs to be Evaluated
5. Analysing and Preparing Job Description 6. Selecting the Method of Evaluation 7. Classifying Jobs 8. Action Plan 9. Reviewing Periodically.
Job Evaluation Process: 5, 7 and 9 Steps
Job Evaluation Process – 7 Steps Involved in the Process of Job Evaluation
The process of job evaluation involves the following steps:
1. Gaining Acceptance:
Before undertaking job evaluation, top management must explain the aims and uses of the programme to the employees and unions. To elaborate the programme further, oral presentation could be made. Letters, booklets could be used to classify all relevant aspects of the job evaluation programme.
2. Creating Job Evaluation Committee:
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It is not possible for a single person to evaluate all the key jobs in an organization. Usually, a job evaluation committee consisting of experienced employees, union representatives and HR experts is created to set the ball rolling.
3. Finding the Jobs to be Evaluated:
Every job need not be evaluated. This may be too taxing and costly. Certain key jobs in each department may be identified. While picking up the jobs, care must be taken to ensure that they represent the type of work performed in the department.
4. Analysing and Preparing Job Description:
This requires the preparation of a job description and also an analysis of job needs for successful performance.
5. Selecting the Method of Evaluation:
The most important method of evaluating the jobs must be identified now, keeping the job factors as well as organizational demands in mind.
6. Classifying Jobs:
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The relative worth of various jobs in an organization may be found out after arranging jobs in order of importance using criteria such as skill requirements, experience needed, under which conditions job is performed, type of responsibilities to be shouldered, degree of supervision needed, the amount of stress caused by the job etc. Weights can be assigned to each such factor. When we finally add all the weights, the worth of a job is determined. The points may then be converted into monetary values.
7. Reviewing Periodically:
In the light of changes in environmental conditions (technology, products, services, etc.), jobs need to be examined closely. For example, the traditional clerical functions have undergone a rapid change in sectors like banking, insurance and railways, after computerisation.
New job descriptions need to be written and the skill needs of new jobs need to be duly incorporated in the evaluation process. Otherwise, employees may feel that all the relevant job factors—based on which their pay has been determined—have not been evaluated properly.
Job Evaluation Process – 9 Step Process
1. Gaining Acceptance of Process – The process of job evaluation is explained to the employees and unions before undertaking it. The purpose and importance of job evaluation is made available to everyone with the help of conferences, letters & circulars.
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2. Selecting Key Jobs for Evaluation – The key jobs are those which are critical in nature and represent the type of work performed. The other jobs are compared with the key jobs or critical success jobs and the process continues.
3. Job Description – It is a written statement of what job-holder does, how it is done, under what conditions it is done and why it is done. It is a document identifying responsibilities involved and condition of employment for each job which is essential for job evaluation.
4. Job Specification – It comprises of all the characteristics of a worker required for efficient task competition. It describes the key qualification in the form of employee’s education, experience skills, knowledge and abilities.
5. Selecting job Evaluation Method – There is several technique of job evaluation, but the one, which is most appropriate to the job, and organization is selected. It may also be possible to select more than one method for accuracy.
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6. Job Rating – It is the method of rating the job by using a predetermined system or plan and studying job description. Each job is assigned with certain value or score depending upon its worth.
7. Assignment of Money Value to Job – Once all the scores and values are added, the worth of job is determined. These points are converted into monetary values according to a definite system or scale.
8. Implementation of Process – Once the evaluation process is over management explains it to employees and put into action.
9. Periodic Review – This is the final stage in a job evaluation program. In this stage, procedure developed to maintain salary structure is reviewed in the light of changes in their responsibilities and market rates. A feedback system is helpful for the employees who are dissatisfied by the above process.
Job Evaluation Process – Support of Management, Constitution of Committee, Training for Job Evaluation, Selection of Jobs for Evaluation and a Few Others
The process of job evaluation involves the following steps:
Process # 1. Support of Management:
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Top management should enlighten and educate the employees concerned on the programme of job evaluation. It should highlight the aims and benefits of the programme to employees. It should clarify the doubts of the employees in this regard through oral presentation, booklets, newsletters, meetings and so on.
Process # 2. Constitution of Committee:
Job evaluation is done by a group of individuals and not by a single individual. Hence a job evaluation committee is to be constituted comprising representatives of management, unions, employees and experts or professionals.
Process # 3. Training for Job Evaluation:
Since the members of a job evaluation committee are chosen from different constituencies they should be trained for job evaluation.
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The training agenda in this regard should accommodate the following aspects:
i. Need for evaluation of job.
ii. Modus operandi of job evaluation.
iii. Influence of job evaluation on promotion.
iv. Choice of evaluation criteria.
v. Periodical review of job evaluation programme.
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vi. Method of effecting alternation in the jobs.
vii. Publication of job grades and salary bands.
viii. Method of dealing with disagreement of members with the grading awarded.
ix. Disposal of appeal on grades.
x. Grading new jobs emerging out of changes in environmental factors or expansion of business enterprise.
Process # 4. Selection of Jobs for Evaluation:
Each and every job in the organization need not be evaluated. Certain jobs in each and every department which represent the work performed therein may be selected for evaluation.
Process # 5. Defining the Criteria for Evaluation:
It involves two aspects. First, the evaluation committee should identify the critical factors involved in the job which should be evaluated. These factors include skill effort, working conditions, difficulty in job performance, decision-making, job autonomy, span of discretion, span of supervision and so on.
Secondly, having identified the criteria, benchmarks need to be fixed for relevant criteria. These benchmarks should be established by taking into account industry average, various jobs within the organization and other variable influences in the organization.
Process # 6. Selection of Methods of Job Evaluation:
Job evaluation committee should decide on the method of job evaluation. It is advisable for the committee to select a combination of methods instead of a single method keeping in mind the job factors, organizational demands and other relevant factors.
Process # 7. Job Classification:
The relative worth of various jobs in the organization has to be found out after arranging the jobs in order of their importance. Using the criteria like skill requirement, experience needed, type of responsibility to be assumed, degree of job stress, etc., weights need to be assigned for each and every factor. Finally all the weights should be aggregated to arrive at the relative worth of each and every job in the organization.
Process # 8. Action Plan:
Once the process of evaluation is completed, action plan is readied. Management should explain the plan to employees concerned and then put it in place in the organization.
Process # 9. Periodical Review:
Jobs have to be reviewed periodically in the light of changes in technology, products, services, etc. For instance, the traditional clerical post has been changed into data entry operator. Therefore new job descriptions need to be written and new skill sets have to be added in the evaluation process. Similarly, the vertical structure of organization has been changed into matrix, virtual, project or team, and so on in many enterprises. Consequently the jobs too have undergone a sea change in their respective contents.
In this context, they have to be revised and looked afresh in the light of current developments unfolding in the environment.
Job Evaluation Process – 5 Step Process
The significant steps in job evaluation process discussed below:
Step # 1. Identification of Jobs for Evaluation:
The first phase of job evaluation is determine the jobs to be covered under the evaluation process. Once the determination of job is done step that follows is the determination of the factors to be evaluated in a job. The evaluator evaluates the job factors like physical efforts, mental efforts, concentration, communication and leadership skills, education and experience, job complexity and pressure.
Step # 2. Collecting the Relevant Data:
The next phase is the collection of necessary information of the job evaluation process. For this, the evaluators may adopt data collection techniques like interviews, questionnaires, and observation, besides job description statement, for gathering relevant information.
Job analysis should precede the actual programme of evaluation as it provides job-related data that would be useful in drafting job description and job specification. At this stage, the evaluator should completely satisfy himself about the adequacy of information that occurs in assessing the worth of the job. Then, the evaluators should do a thorough analysis of all the information available with them.
Step # 3 . Determination of Job Ranking:
In this step, the evaluator assesses the extent of the presence of the chosen factors in the jobs. On the basis of the result of such an assessment, the evaluator determines the ratings for each job. Since assessment of similar factors is made in an evaluation process, the ratings reflect the relative worth of a job in comparison to other jobs in the organisation.
Step # 4. Selection of Benchmark Jobs:
The chief purpose of job evaluation is to develop pay grades for each category of jobs. In this regard, it is necessary for an organisation to know what the other organisations are paying for similar jobs. However, it may not be feasible for an organisation to ascertain the comparative pay scales of all the jobs in the organisation.
As a result the evaluators may select a few jobs that are normally found in every organisation and there are comparable in nature. These jobs are usually given the name benchmark jobs and serve as yardsticks for determining the pay scale of all other jobs in the organisation.
Step # 5. Wage and Salary Surveys:
In this stage, salary surveys are conducted by an organisation either in a formal or informal way. An organisation may either conduct a direct survey to gather relevant information or use the published reports of professional agencies or magazines. Based on such survey, the monetary value of each job is determined.
Generally informal sources like telephones, newspapers and the internet are used. Step 6 Review and Feedback There is a great influence of developments in the external environment on organisations and it leads to changes in the internal factors. To illustrate, technological changes influence the job characteristics and requirements profoundly.
As a result, organisations are forced to review the jobs at periodic intervals to determine their worth in the changed context. Feedback should also be collected from different stakeholders like job-holders, supervisors, managers and unions about the various aspects of job evaluation to constantly improve the job evaluation process.
Job Evaluation Process
The job-evaluation process starts defining objectives of evaluation and ends with establishing wage and salary differentials. The main objective of job evaluation, is to establish satisfactory wage and salary differentials. Job analysis should precede the actual programme of evaluation. Job analysis, provides job-related data, which would be useful in drafting job description and job specification.
A job-evaluation programme involves answering several questions. The major ones are – (a) which jobs are to be evaluated? (b) Who should evaluate the jobs? (c) What training do the evaluations need? (d) How much time is involved? (e) What should be the criteria for evaluation? (f) What methods of evaluation are to be employed?
Which jobs are to be evaluated in any exercise, where there are more than 30 or 40 jobs to be evaluated, it is necessary to identify and select a sample of benchmark jobs, which can be used for comparisons inside and outside the organs. The benchmark jobs should be so selected to achieve representative sample of each of the main levels of jobs in each of the principal occupations.
The size of the sample depends on the number of different jobs to be covered. It is likely to be less than about five percent of the total number of employees in the organisation and it would be difficult to produce a balanced sample unless at least 25 percent of the distinct jobs at each level of the organisation were included.
A committee, which consists of Head of several of departments, does representatives of employee unions and specialist drawn from the National Productivity council Job evaluation. HR specialists will be normally the chairmen of the committee.
Responsibility for the overall coordination of the job-evaluation programme should be in the hands of a senior executive who can then report its progress to the board, and advise it on ensuring wage and salary development. Members of the job-evaluation committee should be trained in its procedure so as to make the programme successful.
Job evaluation should not be conducted in haste. Any rushing through will lead to appeals against the grading of jobs. Eight jobs in a day can be the ideal pace. After this, the quality of evaluation tends to drop, and more time has to spend later in checking and assessing the validity of the grading. The final review of all the time should be allowed for re-evaluation, if necessary.
The heart of job evaluation is the determination of the criteria for evaluation. Most job evaluations use responsibility, skill, effort and working conditions as major criteria. Other criteria used are difficulty, time-span of discretion, size of subordinate staff, and degree of creativity needed.
Job Evaluation Process – 5 Steps According to National Institute of Personnel Management of India
The basic procedure of job evaluation is to compare the content of jobs in relation to one another, in terms of their skills or responsibility or some other requirement. The job contents may be decided upon in two ways, i.e., either by making an intuitive “overview” i.e., by deciding that one job is “more important” than another, and not going any deeper in why — in terms of specific job-related factors; or by comparing one job to another by focusing on certain ‘basic factors’, which may be common in each job.
Such factors are called compensable factors — which determine the definition of job content; that determine how the jobs compare to each other; and they also help determine the compensation paid for each job. The organisation might develop its own compensable factors or use those factors adopted by others.
For example, the “Equal Pay for Equal Work Act” (in USA) focuses on four factors- skills, efforts, responsibilities and working conditions. While some other system (say Hay system in the States) focuses on know-how, problem-solving and accountability. Often several basic factors are chosen initially and then subdivided into sub-factors.
When compensable factors are available, jobs can be evaluated more systematically. Each job is compared with all the others using the same factors, sub-factors, and number of degrees. Sometimes job specifications are based on these factors, stating the “human requirements” of the job in terms of compensable factors like education, skills, problem-solving, and decision-making.
In India, the National Institute of Personnel Management has laid down the following steps which should be taken to install a job evaluation programme:
(i) Analyse and Prepare Job Description- This requires the preparation of a job description and also an analysis of job requirements for successful performance.
(ii) Select and Prepare a Job Evaluation Plan- This means that a job must be broken down into its component parts, i.e., it should involve the selection of factors, elements needed for the performance of all jobs for which money is paid, determining their value and preparing written instructions for evaluation.
(iii) Classify Jobs- This requires grouping for arranging jobs in a correct sequence in terms of value to the firm, and relating them to the money terms in order to ascertain their relative value.
(iv) Install the Programme- This involves explaining it to employees and putting it into operation.
(v) Maintain the Programme- Jobs cannot continue without updating new jobs and job changes in obedience to changing conditions and situations.
Job Evaluation Process – With Establishing Pay Grades and Developing Wage Curve for Assigning Pay Rates to Each Pay Grade
It is systematic process of evaluation of one job as compared to other job in an organization. It determines the relative worth of each job. Organisation has a large number of jobs which are assigned to employees. These jobs are not same, some are important and some are less important.
So, worth of jobs varies from each other in terms of efforts, skill, responsibility, working condition, problem solving etc. This ascertainment/assessment of job’s relative worth is made through job evaluation.
Job evaluation activity includes:
i. Creation of a conducive atmosphere to accept this mechanism to determine worth of one job as compared to other job.
ii. Obtaining co-operation from all concerned viz., supervisors, union representatives, employees and human resource specialists.
iii. Constituting job evaluation committee
iv. Identification of benchmark jobs
v. Determining factors for comparison viz., responsibility, skill etc.
vi. Deciding method for evaluation of jobs (like ranking method, job classification/grading method, point method, factor comparison method)
vii. Evaluating worth of each job with the use of any one method.
Classifying Similar Jobs into Pay Grades (Establishing Pay Grades):
For ascertaining relative worth of each job evaluation committee finds out jobs which are nearly similar to each other in respect of skill needed, responsibility shouldered, efforts required and the like. These jobs have similar job evaluation scores. The committee then classifies such jobs into pay grades on the basis of some norms stipulated for such purpose (e.g., pay grade may comprise of all jobs falling within two or three ranks in case of ranking method used).
Now, question arises with regard to the number of pay grades the organization should have.
It generally depends on:
i. Employees’ strength
ii. Number of evaluated jobs
iii. Organization’s structure
iv. Corporate policy
v. Decision in respect of number of points to be assigned for each grade.
However, it needs to ensure that moderate number of pay grades is established to cover most of jobs in pay grades.
Developing Wage Curve for Assigning Pay Rates to Each Pay Grade:
After pay grades/ranges are prepared the evaluation committee takes step to price each grade. That means, pay rate for each grade is determined. For such purpose wage curve is developed.
The wage curve focuses the relationship between the value of the job and the current average wage/pay rate for grades/ jobs. This is shown in Figure 4.1
Pricing pay grades includes the following steps:
i. Ascertaining average wage/pay rate for each pay grade and showing the same on the vertical axis.
ii. Showing pay grades, in terms of points along the horizontal axis
iii. Plotting the wage rate for each pay grade
iv. Fitting a ‘wage line’ through the points plotted
v. Pricing jobs.
Developing pay rate level/ranges and adjusting pay rates.
Employees may not be happy if they remain at a particular pay rate and do not get yearly pay increase. They want increment in particular scale. That means, they desire for pay range (pay scale). Companies also want to establish pay ranges as a measure to motivate and retain the competent employees and also to attract the quality employees by offering higher pay rate in a grade.
So, necessity to develop pay rate level (pay rate ranges) is felt. For each grade a pay range is established. Movement of steps within a grade depends on number of years’ service, performance rating and some other factors.
Pay rate level (pay ranges) depicts minimum pay rate, maximum pay rate, target wage rate (i.e., wage line) and also a state of overlapping pay grade.
Wage line indicates target wage/salary rates. Company may pay wages/salary above or below the wage line or may pay targeted wage/salary rate along the wage line. So, employees may be overpaid, underpaid or may be paid rightly. In case of over payment and underpayment adjustment of payment is made by pay freeze and pay raise respectively.
Job Evaluation Process – Gaining Acceptance, Creating Job Evaluation Committee, Finding Jobs to be Evaluated, Analyzing and Preparing Job Description and a Few Others
There are certain issues that must be addressed before the execution of a job evaluation program. It is necessary for an organization to decide on various issues that exhibit the scope of job evaluation program.
Such issues may include:
i. Who will be covered by job evaluation program – low management level staff or middle management level staff?
ii. What kind of jobs to be included in the program, hourly paid or monthly salaried?
iii. What level of jobs to be included, managerial or supervisory?
iv. What kind of assistance is required, outside consultant or internal assistance?
v. What should be the extent and mode of employees’ consultation?
vi. What are the present conditions of culture and climate of the organization to execute the job evaluation program?
The procedure of the job evaluation program involves eight generalized steps.
The steps of job evaluation process are described as follows:
1. Gaining Acceptance:
Constitutes the first and foremost step of job evaluation, which demands that the top management should prepare the employees for the consequences of a job evaluation program. The management can avoid the resistance from employees by explaining the purpose and importance of the program to both the employees and their unions. The employees can be made more familiar with the program through the presentations, letters, booklets, and handbooks.
2. Creating Job Evaluation Committee:
Represents the second step in the job evaluation program. In this step, a committee is constituted, which involves union representatives, experienced employees, in-house HR experts, and outside consultants.
3. Finding the Jobs to be Evaluated:
Involves recognizing the sample jobs that can be taken as representatives of all the jobs at a particular level of a department. It is not possible to evaluate every job, as it will become time consuming and costly for the organization. Thus, it is essential that the identified jobs appropriately depict the type of work carried out in that department at that level.
4. Analyzing and Preparing Job Description:
Includes analyzing the selected representative jobs and identifying their requirements. This is preceded by the formulation of job description for every identified job.
5. Selecting the Method of Evaluation:
Involves the identification of most appropriate evaluation technique considering the requirements and other factors of the job and the organization.
6. Classifying Jobs:
Involves the classification of jobs according to their importance so that their relative worth can be identified. The classification is performed using various parameters, such as skill requirements, required experience, work conditions, responsibilities associated with the job, and the level of supervision.
Each factor that constitutes and characterizes an individual job class is assigned some weight. After classification, the total weight for each job is calculated by adding the individual weights assigned to each factor. The total weights for each job are converted into monetary values. In this way, the worth of each job is determined.
7. Installing the Program:
Begins after the determination of weights to each job that marks the end of the evaluation process. Moreover, the job evaluation program is incomplete without its installation, which requires the formulation of plan of action. Again, it becomes the essential responsibility of the top management to first explain the action plan to employees and then implement it.
8. Reviewing Periodically:
Makes the job evaluation effective, relevant, and updated with the changing business practices and other environmental conditions. The business environment changes rapidly, which makes the job evaluation irrelevant or obsolete over a period of time. Job evaluation should be carried out at a regular interval. In addition, it should include writing the new job descriptions for the existing jobs and incorporating the requirements of new jobs in the existing job evaluation process.
Job Evaluation Process – 5 Steps According to the Indian Institute of Personal Management Calcutta
Job evaluation involves evaluating jobs in terms of determining rates of monetary compensation that is worth of all the jobs. In general the more difficult the job, the more is its worth. The higher the worth of the job the more are the requirements of skill, education and responsibility in a job.
The basic procedure of job evaluation rates to the comparison of the contents of jobs in relation to one another, with reference to their skills or responsibility or some other requirement.
The organisation may ascertain its own compensable factors or utilize the factors adopted by others e.g., the “Equal pay for equal work”. Act concentrates on four factors – skills, efforts, responsibility and working conditions.
The process of job evaluation can be divided into the following five stages:
In India, the Indian Institute of Personal Management Calcutta has laid down the following steps which should be considered to install a job evaluation programme:
(a) Analyze and Prepare Job Description – This requires the preparation of a job description and also an analysis of job requirement for successful performance.
(b) Maintain the Programme – Jobs cannot continue without updating new jobs and job changes in obedience to changing conditions and situations.
(c) Select and Prepare a Job Evaluation Plan – This means that a job must be broken down into its component part, i.e., it should involve the selection of factors, elements needed for the performance of all jobs for which money is paid, determining their value and preparing written instructions for evaluation.
(d) Classify Jobs – This requires grouping or arranging jobs in a correct sequence in terms of value to the firm, and relating them to the money terms in order to ascertain their relative value.
(e) Install the Programme – Jobs cannot continue without updating new jobs and job changes in obedience to changing conditions and situation.
Job Evaluation Process
The following steps should be considered to install a job evaluation programme:
1. Accepting acceptance from employees – The responsibility of managements is to explain the objectives and uses of the job evaluation programme to the employees and unions of the organisation and to gain the acceptance from them.
2. Formation of job evaluation team – The job evaluation team consist of experience employees, union representatives, HR personnel and any other person who is expert in this field.
3. Selection of jobs to be evaluated – The first function of job evaluation team is to identified the jobs to be evaluated and to ensure that the identified jobs represent the type of work performed in the department.
4. Analyse and prepare job description – This requires the preparation of a job description and an analysis of job requirements for successful performance.
5. Select and prepare a job evaluation plan – Job should be broken into its components keeping the job factors as well as organizational demands in mind then determine their value and prepare written instructions for evaluation.
6. Classify jobs – The next steps is to arrange the jobs in order of importance using criteria such as skill requirements, experience needed, type of responsibilities to be shouldered and under which conditions job is performed. Then calculate the money in order to ascertain their relative values.
7. Install the programme – When the evaluation process is over then the duty of management is to explain it to employees and put it into operation.
8. Periodic review – The periodic review is necessary to update due to changes in environmental conditions otherwise the employees may feel that all relevant job factors have not been evaluated properly.