Everything you need to know about the methods of job evaluation. 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 the process of determining the relative worth of the job. It is process which is helpful even for framing compensation plans by the personnel manager.
Job evaluation is a process of determining the relative worth of a job. It is helpful for framing compensation plans. It helps to achieve internal consistency and equity between various jobs in an organization. We can find out that which jobs should be paid more than the other jobs.
Different organisations use different methods for evaluation of different jobs. The methods of job evaluation are grouped into two categories. They are:- 1. Non-Quantitative/Non-Analytical Methods 2. Quantitative/ Analytical Methods.
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Non-quantitative/non-analytical methods include:- i. Ranking or Job Comparison and ii. Grading or Job Classification.
Quantitative methods include:- i. Point Rating and ii. Factor Comparison.
Methods of Job Evaluation Used by Organizations
Methods of Job Evaluation – Ranking, Grading, Points Rating and Factor Comparison
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 the process of determining the relative worth of the job. It is process which is helpful even for framing compensation plans by the personnel manager.
Job evaluation is a practical technique, designed to enable trained and experienced staff to judge the size of one job relative to others. It does not directly determine pay levels, but will establish the basis for an internal ranking of jobs.
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Different organisations use different methods for evaluation of different jobs.
The different job evaluation methods are discussed below:
Method # 1. Ranking:
The ranking method is the simplest and non-analytical form of job evaluation where all jobs are arranged according to their worth or importance in the organization. In this method, each job as a whole is compared with other job to understand the relative worth. All jobs are ranked in the order of their importance from the simplest to the hardest or from the highest to the lowest. The importance of order of job is judged in terms of duties, responsibilities and demands of the job on the job holder.
This method of ranking begins with preparation of job description to identify the duties, responsibilities and qualifications that the job demands. Then certain key jobs or bench-mark jobs of major departments of the organizations are ranked. The key jobs may be the most and least important jobs, a job may be midway between the two extremes, and others at the higher or lower intermediate points. Then each job is positioned in ranks by comparing with the key jobs and key job ratings.
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Finally, all the ranked jobs are classified into appropriate groups or classifications by considering the common features of jobs such as – similar duties, skills or training requirements. All the jobs within a particular group or classification receive the same wage or range of rates. This method of ranking job is applied in ranking of jobs in a University like Professor / Registrar, Reader / Dy. Registrar, Lecturer / Asst. Registrar.
This method of job evaluation is appropriate for small-size organizations where jobs are simple and few and also suitable for evaluating managerial jobs where job contents cannot be measured in quantitative terms. This method of job evaluation is preferred as it is simplest, inexpensive and less time consuming and involves little paper work.
However this method has certain limitations. This method of ranking does not have any definite standards of judgment and also there is no objective way of measuring the differences between jobs, which may result in arbitrary ranking of jobs.
Method # 2. Grading:
Grading method is also known as ‘job classification method’ is a non-analytical method of job evaluation. Under this method, job grades or classes are determined on the basis of information derived from job analysis by an authorized body or committee appointed for this purpose. A job grade is defined as a group of different jobs of similar nature, requiring similar skills and qualification to perform them.
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The grades or classes are created beforehand by identifying some common denominator like skills, knowledge and responsibilities. The example of job grades may include, depending on the type of jobs the organization offers, skilled, unskilled, account clerk, clerk-cum-typist, steno typist, office superintendent, laboratory assistant, administrative and so on. Once the grades are established, each job is then placed into its appropriate grade or class depending on how well its characteristics fit in a grade or class.
In this way, a series of job grades is created. Then, different wage/salary rate is fixed for each grade. This method is easy to understand and simple to operate and economical and helps in determining wage structure easily. This method is largely used in Government jobs. This method cannot be used for jobs that are complex in nature and cannot be fit neatly into one grade.
Method # 3. Points Rating:
This method of job evaluation begins with identifying the major factors influencing various jobs. The factors that influence the job include educational qualification, skill, effort, training, knowledge, job hazards, responsibility, etc. Inclusion and evaluation of too many factors may result in an over-complex scheme with overlap and duplication between factors. All factors are evaluated and points are allotted to each factor. Weights are given to factors depending on their significance and importance in the job.
The points allocated to various factors of a job are then summed. Then, the jobs with similar sum of points are placed in similar pay grades. The sum of points gives an index of the relative significance of the jobs that are rated. The worth of each job is determined on the basis of its factors.
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It is the most comprehensive, objective, analytical and accurate method of job evaluation. However this method is time-consuming and expensive and involves lot of clerical work. It is difficult to select factors and assign points to them and the points assigned to factors are arbitrary.
Method # 4. Factor Comparison:
This is an analytical method of job evaluation. This method is a combination of both ranking and point methods where the jobs are compared, ranked and rated on the basis of selected common factors .This system is usually used to evaluate white collar, professional and managerial positions. This method starts with the selection of factors, usually five of them: mental requirements, skill requirements, and physical exertion, responsibility, and job conditions.
These factors are assumed to be constant for all the jobs. Each factor is ranked individually with other jobs. For example, all the jobs may be compared first by the factor ‘mental requirements’. Then the skills factor, physical requirements, responsibility, and working conditions are ranked. Thus, a job may rank high in skills but low in physical requirements. Then total point values are then assigned to each factor.
The worth of a job is then obtained by adding together all the point values. An advantage of the factor- comparison methods that jobs of unlike nature – for example, manual, clerical and supervisory – may be evaluated with same set of factors. But the method is complicated and expensive.
Methods of Job Evaluation – 2 Categories: Non-Quantitative and Quantitative Methods (With Merits and Demerits)
There are four basic methods of job evaluation currently in use which are grouped into two categories:
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1. Non-Quantitative Methods:
i. Ranking or Job Comparison
ii. Grading or Job Classification
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2. Quantitative Methods:
i. Point Rating
ii. Factor Comparison.
The basic difference between these two methods is that, under non – quantitative methods, a job is compared as a whole with other jobs in the organization, whereas in case of quantitative methods, the key factors of a job are selected and, then, measured. The four methods of job evaluation are being discussed one by one.
1. Non-Quantitative Methods:
i. Ranking Method:
The ranking method is the simplest form of job evaluation. In this method, each job as a whole is compared with other and this comparison of jobs goes on until all the jobs have been evaluated and ranked. All jobs are ranked in the order of their importance from the simplest to the hardest or from the highest to the lowest.
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The importance of order of job is judged in terms of duties, responsibilities and demands on the job holder.
The jobs are ranked according to “the whole job” rather than a number of compensable factors. The ranking of jobs in a University, based on Ranking Method, may be like this.
Steps Involved in the Ranking Method:
a. Analyze and describe jobs, bringing out those aspects which are to be used for purpose of job comparison.
b. Identify bench-mark jobs, for example, those jobs which include all major departments and functions. The jobs may be the most and least important jobs, a job midway between the two extremes, and others at the higher or lower intermediate points.
c. Rank all jobs in the organization around the bench-mark jobs until all jobs are placed in their rank order of importance.
d. Finally, divide all the ranked jobs into appropriate groups or classifications by considering the common features of jobs such as similar duties, skills or training requirements. All the jobs within a particular group or classification receive the same wage or range of rates.
Ranking method is appropriate for small-size organizations where jobs are simple and few. It is also suitable for evaluating managerial jobs wherein job contents cannot be measured in quantitative terms. Ranking method being simple one can be used in the initial stages of job evaluation in an organization.
Ranking method has the following merits:
a. It is the simplest method.
b. It is quite economical to put it into effect.
c. It is less time consuming and involves little paper work.
Demerits of Ranking Method:
The method suffers from the following demerits:
a. The main demerit of the ranking method is that there are no definite standards of judgment and also there is no way of measuring the differences between jobs.
b. It suffers from its sheer unmanageability when there are a large number of jobs.
Grading method is also known as ‘classification method’. This method of job evaluation was made popular by the U.S. Civil Service Commission. Under this method, job grades or classes are established by an authorized body or committee appointed for this purpose. A job grade is defined as a group of different jobs of similar difficulty or requiring similar skills to perform them. Job grades are determined on the basis of information derived from job analysis.
The grades or classes are created by identifying some common denominator such as skills, knowledge and responsibilities. The example of job grades may include, depending on the type of jobs the organization offers, skilled, unskilled, account clerk, clerk-cum-typist, steno typist, office superintendent, laboratory assistant and so on.
Once the grades are established, each job is then placed into its appropriate grade or class depending on how well its characteristics fit in a grade. In this way, a series of job grades is created. Then, different wage/salary rate is fixed for each grade.
The main merits of grading method of job evaluation are:
a. This method is easy to understand and simple to operate.
b. It is economical and, therefore, suitable for small organizations.
c. The grouping of jobs into classifications makes pay determination problems easy to administer.
d. This method is useful for Government jobs.
The demerits of this method include:
a. The method suffers from personal bias of the committee members.
b. It cannot deal with complex jobs which will not fit neatly into one grade.
c. This method is rarely used in an industry.
2. Quantitative Methods:
i. Points Rating Method:
Points Rating Method is the most widely used method of job evaluation. Under this method, jobs are broken down, based on various identifiable factors such as skill, effort, training, knowledge, hazards, responsibility, etc. Thereafter, points are allocated to each of these factors and are summed up depending on their importance to perform the job. Then, the jobs with similar total of points are placed in similar pay grades. The sum of points gives an index of the relative significance of the jobs that are rated.
Steps in Determining Job Points:
Steps in determining job points are as follows:
a. Determine the jobs to be evaluated. Jobs should cover all the major occupational and levels of responsibility to be covered by the method.
b. Decide on the factors to be used in analyzing and evaluating the jobs. The number of factors needs to be restricted because too many factors result in an over-complex scheme with overlap and duplication between factors.
c. Define the factors clearly in written. This is necessary to ensure that different job raters interpret a particular factor in the same sense.
d. Determine degrees of each factor and assign point value to each degree.
e. Point values are assigned to different degrees on the basis of arithmetic progression.
f. Finally, money values are assigned to points. For this purpose, points are added to give the total value of a job. Its value is then translated into money terms with a predetermined formula.
The method has the following merits:
a. It is the most comprehensive and accurate method of job evaluation.
b. Prejudice and human judgment are minimized, i.e. the system cannot be easily manipulated.
c. Being the systematic method, workers of the organization favour this method.
d. The scales developed in this method can be used for long time.
e. Jobs can be easily placed in distinct categories.
Demerits of Job Point’s Method:
The drawbacks of the method are:
a. It is both time-consuming and expensive method.
b. It is difficult to understand for an average worker.
c. A lot of clerical work is involved in recording rating scales.
d. It is not suitable for managerial jobs wherein the work content is not measurable in quantitative terms.
Factor Comparison Method is a combination of both ranking and point methods, in the sense that it rates jobs by comparing them and makes analysis by breaking jobs into compensable factors. This system is usually used to evaluate white collar, professional and managerial positions.
Steps in Evaluating Factor Comparison Method:
Steps in evaluating jobs under this method are as follows:
a. The key or benchmark jobs are selected as standards.
b. Standards contents are selected for the key jobs which are a representative cross-section of all jobs that are being evaluated-from the lowest to the highest paid job, from the most important to the least important and cover the full range of requirements of each factor.
c. The factors common to all jobs are identified, selected and defined precisely. The common factors to all jobs are usually five, viz., mental requirements, physical requirements, skill requirements, working conditions and responsibility.
d. Once the key jobs are identified and also the common factors are chosen, the key jobs are, then, ranked in terms of the selected common factors.
e. The next step is to determine a fair and equitable base rate which is usually expressed on an hourly basis or any other chosen basis and, then, allocation of this base rate is done among the five common factors.
Merits of Factor Comparison Method:
This method enjoys the following merits:
a. It is more objective method of job evaluation.
b. The method is flexible as there is no upper limit on the rating of a factor.
c. It is fairly easy method to explain to employees.
d. The use of limited number of factors which is usually five ensures less chances of overlapping and over-weighting of factors.
e. It facilitates determining the relative worth of different jobs.
Demerits of Factor Comparison Method:
The method, however, suffers from the following drawbacks:
a. It is expensive and time-consuming method.
b. Using the same five factors for evaluating jobs may not always be appropriate because jobs differ across and within organizations.
c. It is difficult to understand and operate.
Methods of Job Evaluation – Ranking Method, Job Classification Method, Factor Comparison Method and Point Method (With Advantages and Disadvantages)
The relative worth of various jobs in an organisation may be evaluated in two ways – either by comparing them one against another or by comparing them against a scale constructed for the purpose. There are in all four methods of job evaluation. Two of them involve comparison of jobs with one another and the other two involve comparison of jobs against a scale.
These four methods are as follows:
1. Ranking Method.
2. Job Classification Method.
3. Factor Comparison Method.
4. Point Method.
Method # 1. Ranking:
Under this method, jobs are arranged in ranks i.e. in the order of importance beginning with the most important and responsible job to the least important and least responsible job in the organisation. Then salary grades are determined for each job on the basis of its importance.
The factors to be taken into account which determine the importance of a job are – (i) volume of work, (ii) responsibility involved, (iii) authority exercised, (iv) difficulty of work, (v) monotony of work, (vi) supervision required, (vii) knowledge and experience required, and (vii) working conditions.
The important advantages of this method are as follows – (i) This method is useful in small enterprises in which a few officers can be expected to know all the jobs, (ii) It is the most simple and informal method of job-rating, (iii) It requires less time than the other methods. The important advantages of this method are as follows (iv) The installation of this method is not a difficult task.
There are however certain disadvantages of this method:
i. It merely ranks the jobs but it does not indicate the degrees of difference among them.
ii. It does not provide any record of the factors considered for rating the jobs and therefore, it is not useful in explaining to the employees why one job is rated higher than another.
iii. It results in arbitrary ranking of jobs because there is no pre-determined yard-stick to determine the rank. Each judge will have his own criteria for determining the rank and hence, the ranking is likely to be inaccurate.
Conclusion:
Inspite of these limitations, this method is more suitable for rating supervisory and executive job positions where intangible factors are to be taken into account for comparison and evaluation.
Method # 2. Job Classification:
Under this method, jobs are classified on the basis of importance and .risk attached and responsibility fixed. Jobs are classified as Grade I, Grade II, Grade III and so on and salary grades are determined for each class or grade of jobs. The method is generally followed in civil services. In business concerns, the jobs may be classified as- (i) very highly skilled jobs (ii) highly skilled jobs (iii) skilled jobs (iv) semi-skilled jobs and (v) unskilled jobs. Then, salary grade may be determined for each of these grades.
Advantages:
(i) This method is also suited to small enterprises where the classification of jobs is very easy,
(ii) This method is considered to be an improvement over the ranking method in that a pre-determined scale of values is provided in this method,
(iii) This is also relatively simpler and inexpensive method to operate.
Disadvantages:
(i) But the main disadvantage of this method is that grades are fixed on broad generalities, (ii) There is the absence of quantitative values.
(iii) There is an element of personnel bias in this method,
(iv) There is also arbitrary linkage of salary grades to specific classified jobs etc.
Method # 3. Factor Comparison:
This is a quantitative method of job-rating which involves complicated procedure requiring the services of experts. Under this method, jobs are analysed on the basis of the following factors viz. (i) mental requirements, (ii) skill requirements, (iii) physical requirements, (iv) responsibility range and (v) working conditions.
On the basis of these factors, the weights are applied to the job- elements. Weights are assigned to the jobs by an expert committee. On the basis of these weights, jobs are ranked. A monetary value is assigned to each factor or element of all the jobs. All the values of the individual jobs are weighted and then the total value of each job is readily available.
Thus, a wage-rate for each job is determined by obtaining the sum of the money weightings determined for each of the five factors or elements of the jobs. This wage-rate forms the basis for determining the wage-scale.
Advantages:
Firstly, this method is considered to be more scientific and systematic than the simple ranking method. Secondly, dissimilar jobs can also be evaluated on the basis of common factors under this method. Thirdly, this method may be applied to combinations of critical, manual and supervisory positions.
Fourthly, since weightages are applied on the basis of prevailing wage and salary practices, they cannot be held as absolutely arbitrary. Moreover, experts’ insight in evaluation makes this method more realistic and accurate.
Disadvantages:
But this method suffers from certain disadvantages. Firstly, it is labourious and expensive. Secondly, it is complicated and hence, it cannot be easily explained to the employees. Thirdly, application of weightages and monetary values may sometimes be influenced by the bias of the experts.
Method # 4. Point:
This is the most popular method used for job evaluation. It involves a more detailed, quantitative and analytical approach to the measurement of the worth of the jobs. In this method, there are three stages to be followed.
They are:
(i) Splitting the jobs into their comparable factors such as skill, efforts, responsibility etc.
(ii) Assignment of numerical values to each of these factors.
(iii) Totalling of all these points to find out the point-value of each job.
The outstanding feature of this method is the use of a manual. The manual outlines elements or factors upon which each job is to be rated and provides scales and yard-sticks by which each degree or each factor is to be valued. The degrees determine the number of points to be credited to the job.
The total of such points establishes the point value of the job. The total points are then expressed in terms of money according to a formula already determined.
Advantages:
(i) This method is more objective because even the major factors are sub-divided and this ensures accuracy of evaluation.
(ii) It is also more scientific.
Disadvantages:
(i) But it may suffer from inequities if listing and weighing of points are defective due to oversight or indifference or international motive.
(ii) If the manual is not revised from time to time, the evaluation would not be proper and would be out of tune with the changed trends.
(3) This method is very difficult to be applied and it may be even unintelligible to the workers.
Methods of Job Evaluation – Analytical and Non-Analytical Methods of Job Evaluation
Determining the relative worth of all jobs in the enterprise is difficult. Different jobs make varying demands on workers. One job, for example, might demand a prescribed level of education, require a certain physical ability, or exact specific responsibilities from an employee, whereas another job may be very lax in these aspects. Jobs, therefore, differ with repeat to the demands made on the employee as well as in value to the enterprise.
Job evaluation compares all demands made on each worker and, by means of this comparison, establishes the relative worth of each job in an enterprise. The comparison and evaluation may be made on a non- quantitative basis by simply ranking or classifying the jobs from lowest to highest, or on a quantitative basis where points value are assigned to the various demands of a job, and its relative worth determined by the sum of such point values. Job evaluation programme should be implemented carefully.
The following principles help in successful implementation of the programme:
1. Rate the job but not the employee. Rate the elements on the basis of the job demands.
2. The elements selected for rating should be easily understood.
3. The elements should be defined clearly and properly selected.
4. Employees concerned and the supervisors should be educated and convinced about the programme.
5. Supervisors should be encouraged to participate in rating the jobs.
6. Secure employee cooperation by encouraging them to participate in the rating programme.
7. Discuss with the supervisors and employees about rating but not about assigning money values to the points.
8. Do not establish too many occupational wages.
Job-evaluation methods are of two categories:
1. Analytical and
2. Non- analytical.
1. Analytical Methods:
(a) Point-Ranking Method:
The system starts with the selection of job factors, construction of degrees for each factors, and assignment of points to each degree. Different factors are selected for different jobs, with accompanying differences in degrees and points.
(b) Factor-Comparison Method:
The factor-comparison method is yet another approach for job evaluation in the analytical group. Under this method, one begins with the selection of factors, usually five of them are assumed to be constant for all the jobs. Each factor is ranked individually with other jobs.
2. Non-Analytical Methods:
Ranking and job classification methods come under this category because they make no use of detailed job factors. Each job is treated as a whole in determining its relative ranking.
(a) Ranking Method:
This is the simplest, the most inexpensive and the most expedient method of evaluation. The evaluation committee assesses the worth of each job on the basis of its title or on its contents, if the latter is available. But the job is not broken down into elements or factors. Each job is compared with others and its place is determined.
The method has several drawbacks. Job evaluation may be subjective as the jobs are not broken into factors. It is hard to measure whole jobs.
Ranking is the most straightforward method of work evaluation. Jobs, people, or even teams can be ranked from the ones adding most value to least value to the organisation. Criteria for the ranking are not made explicit. Jobs rather than people are easier to rank when there are a large number of people in jobs.
Teams can be ranked in a team-based environment as a substitute for or addition to the ranking of jobs and people. When a larger number of jobs, people, or teams are to be ranked, the method of paired comparisons can be used. With, this approach each entity is compared to every other entity in terms of value to the organisation.
Overall value of the entity is determined by the number of times that the entity is evaluated as being of greater value then the entity being compared against. If an extremely large number of comparisons needs to be made, statistical formulas are available to reduce the number of comparisons required using sampling theory.
Advantages of ranking method are:
i. Simple to use if there are a small number of jobs, people, or teams to evaluate.
ii. Requires little time.
iii. Minimal administration required.
Disadvantages of ranking method are:
i. Criteria for ranking not understood.
ii. Increases possibility of evaluator bias.
iii. Very difficult to use if there is a large number of jobs, people, or teams to evaluate.
iv. Rankings by different evaluators are not comparable.
v. Distance between each rank is not necessarily equal.
vi. May invite perceptions of inequity.
(b) Job-Grading Method:
As in the ranking method, the job-grading method (or job classification method) does not call for a detailed or quantitative analysis of job factors. It is based on the job as a whole. The difference between the two is that in the ranking method, there is no yardstick for evaluation, while in the classification method, there is such a yardstick in the form of job classes or grades. Under the classification method, the number of grades is first decided upon, and the factors corresponding to these grades are then determined.
The advantages of the method are:
i. Job grade descriptions are vague and are not quantified;
ii. Difficulty in convincing employees about the inclusion of a job in a particular grade because of vagueness of grade descriptions; and
iii. More job classification schedules need to be prepared because the same schedule cannot be used for all types of jobs.
How to Improve Job Evaluation:
Following measures and steps for improving the work of evaluation programmes:
i. A job evaluation scheme should be chosen cautiously. It should be devised and administered on the basis of employment market, demand for labour, bargaining power of the parties and job conditions.
ii. The details of the scheme should be drawn up in such a way that they do not conflict with other provision of a collective agreement.
iii. Give major importance that the number of job titles and classification be kept to a minimum.
iv. 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.
v. In preparing job descriptions it is a sound practice to emphasis in them the things which makes one job different from another rather than to find a comprehensive statement of all the duties of the job.
Following are the essential for the success of Job Evaluation:
i. Compensable factors should represent all of the major aspects of job content. Compensable factors selected should be – (a) Avoid excessive overlapping or duplication, (b) Be definable and measurable, (c) Be easily understood by employees and administrators, (d) Not cause excessive installation and (e) Be selected with legal considerations in mind.
ii. Operating managers should be convinced about the techniques and programme of evaluation. They should also be trained in fixing and revising the wages based on job evaluation.
iii. All the employees should be provided with complete information about job evaluation techniques and programme.
iv. All groups and grades of employees should be covered by the job evaluation. The results of job evaluation must be fair and rational and unbiased to the individuals being affects.
Methods of Job Evaluation – Complex and Detailed Methods of Evaluating Jobs
Job evaluation is a process of determining the relative worth of a job. It is helpful for framing compensation plans. It helps to achieve internal consistency and equity between various jobs in an organization. We can find out that which jobs should be paid more than the other jobs. The term “relative worth” is important.
Job evaluation process is advantageous in many ways:
i. The objective of Job evaluation is to provide internal-external consistency in wage and salary structure.
ii. Job evaluation helps to define jobs and fixed salary structure.
iii. Job evaluation information is helpful in selecting factors determined for job evaluation
iv. Harmonious relations once Job evaluation eliminates controversies
v. Through job evaluation, salary differentials for different jobs become standardized
vi. Through job evaluation, one can understand the relative value of new jobs.
Let us examine some of the methods of evaluating jobs. Some methods are simpler than the others. There are also complex and detailed methods.
1. Simple Ranking Method:
The Simple Ranking method is an older method of job evaluation. In this method, the jobs are arranged from top to bottom in hierarchical manner according to their relative worth and according to their importance. The individual or committee ranking the jobs must be familiar with all the jobs being ranked. Using some criteria, the jobs are ranked from most difficult to least difficult among a group of jobs.
The objectivity is not present in this method of evaluation. The total jobs are compared one against the other. These comparisons are probably made on popularity or some other subjective criterion. Once the system is in place, the job holders may complain why their jobs are ranked lower than the other jobs. Lack of preciseness and lack of objectivity may lead to poor evaluation. When jobs were fewer and simple, this method might have worked better.
The above rankings may not reflect the actual difficulties or easiness among these jobs. Just for example, let us say that these jobs are chosen and ranked. When the actual ranking is done, the ranking is based on the relative worth of these jobs.
There is also Paired Comparison method in which, one job is compared against another job at a time. The comparison can be based on the difficulty involved or the importance of the job being ranked. The rankings are assigned based on the total number of plus marks. The job of Systems Analyst is given the highest ranking, indicating its importance among the other jobs listed.
The paired-comparison method is somewhat more objective than the simple ranking method because the comparison involves one job against another job at a time whereas the simple ranking is made by comparing one job against the rest at a time. When the groups of jobs are smaller, this method of evaluation is possible. As the number of jobs increase, the comparison becomes difficult and complex.
2. Job Grading or Classification:
This method is somewhat objective but suffers from the same problems as comparison methods. In this method of evaluation, jobs are placed into groups based on their similarities. At times, the job characteristics among certain jobs may be similar but not identical in nature. Grouping jobs in this manner is also known as job classification method.
The pay scales are assigned to groups and all the jobs included in a group get the same pay scales or grades. These classes or grades must be defined. The system may appear to be simple but grading the jobs may not be precise and lead to comparison problems and criticized for their subjectivity.
Most of the government and public service jobs traditionally fell under this system. They are generally known as Grade I, Grade II, and so on. Given the huge number of jobs in the Civil-Service jobs, this system seems to be appropriate and practical. This system is more like plugging jobs into groups than evaluating them on objective criteria. This is what happens when more and more new jobs are created due to new technology, and new departments.
The methods discussed above are non-quantitative or non-analytical. Only subjective or non- analytical methods are used to place them in ranks, groups or classes. Over the years, a number of new methods are being used to classify or group or rank jobs. These methods are based on greater analysis and quantitative methods. These days, with the use of computer technology and information systems, much better methods are used for Job evaluation and compensation.
3. Point System:
This system is a quantitative system of job evaluation method. In this method, jobs are analysed and given a total number of points or scores. Companies such as Prudential Finance Company, Met Life, and Digital Equipment use point system in their job evaluations. Although it appears to be a more refined system than others, it is somewhat complicated in structure and application.
Let us look at the steps involved in this method:
1. The Selection of factors for evaluation. Example – Responsibility
2. The factors are broken down into sub-factors – Responsibility broken into:
i. For people
ii. For equipment
iii. For materials
iv. For safety and so on.
3. To refine it further, each factor is assigned with different levels or degree
4. Distribution of points to sub-factors, then to levels.
With the above distribution of points, a manual can be constructed.
5. Based on their importance, points are assigned
The point-manual will contain the descriptions of the sub-factors and the degrees of each sub-factor so that a uniform interpretation can be made and the objectivity in the distribution of points can be made. When the evaluators deal with each sub-factor, a circle will be made for the points chosen for that sub-factor. When all the sub-factors are evaluated, the total points will be computed for jobs being evaluated. Then the jobs are ranked based on the total points allocated for each job.
The division or department managers must review the manual to check for its appropriateness. Although the jobs may undergo some changes due to technology and other factors, the point system may not change. Since the distribution and allocation goes to the smallest level, there is a better chance of objectivity. Most of the difficulty is in the construction of the manual. Now-a-days, consulting companies are invited to prepare the manuals. This way the companies do not spend time using their employees’ for this purpose.
4. The Factor Comparison Method:
This method focuses on the comparison of critical or compensable job factors. The compensable factors may include skills, knowledge or efforts that are compensable in monetary terms. These factors may include effort (mental and physical), skill level, and work conditions which are common to most of the jobs in industry. In this method each factor is compared with the same factor for other key jobs.
Let us look at the steps commonly cited for this method:
i. Identify the compensable factors, the factors common for broad range of jobs in an organization. These factors include Skill, Effort (mental as well as physical) responsibility, and work conditions. These set of factors may vary according to managerial, sales, technical, information systems, and so on.
ii. Decide on the Key jobs which are generally found in the company as well as in the job market. It is easier to find wage levels in the market for these jobs. The number of jobs chosen may vary from company to company.
iii. Distribute current wages to key jobs and then to critical factors. Care has to be taken in assigning the wages to compensable factors based on their importance to the job performance.
iv. After distribution, plot the key jobs in the factor-comparison table or chart.
Methods of Job Evaluation – With Comparison of Job Evaluation Methods
Job evaluation is a systematic process of evaluating and determining the value or worth of jobs performed and the worth or contribution of the employee’s efforts within the organization. Job evaluation is done for the purpose of establishing the wage and salary credentials.
The four major methods of job evaluation are:
1. Job ranking,
2. Job classification,
3. Factor comparison, and
4. The point method.
Method # 1. Job Ranking:
This method is perhaps the simplest method in which jobs are ranked from highest to lowest, in order of their values or merit to the organization. Jobs are often arranged according to the relative difficulty in performing them. Jobs are examined as a whole, rather than on the basis of important factors contained by the job. The evaluator just ranks the jobs on the basis of his/her perception.
This method can be easily adopted in small organizations, but gets more and more difficult as different jobs exist within the company.
Method # 2. Job Classification:
The general purpose of a job classification method is to create and maintain pay grades for comparable work across your organization (heathfield-office(dot)Microsoft(dot)com). The job classification method uses job classes that does a more customized evaluation. This method also uses scales to measure performance rather than simply comparing and ranking employee performances.
To carry out a job classification, you are required to write descriptions for the different categories of jobs; after which you need to develop standards for each job category by describing the key characteristics of those jobs in the category; finally consider similarities among tasks and contributions of the jobs to the organization’s overall goals, and match the jobs to the categories.
Government and non-government organizations, universities and institutes, and other large organizations typically use job classification systems. Organizations that have many types of jobs and have their offices across the globe must make sure to maintain fair standards across all work settings.
The advantage of job classification method is that it is very simple once you have established your categories. Job classification is subjective and the jobs fall into several categories. This is a disadvantage. It is also important for the job evaluators to be careful while evaluating jobs.
Method # 3. Factor Comparison:
The factor comparison method is more scientific and complex than the qualitative methods of ranking and classification. The factor comparison method of job evaluation assumes that there are five universal factors consisting of mental requirements, skills, physical requirements, responsibilities, and working conditions. The evaluator makes decisions on these factors independently.
The five universal factors are discussed briefly:
a. Mental requirements – this reflects mental traits such as inquisitiveness, intelligence, reasoning, imagination, and innovation.
b. Skills – this factor pertains to facility in muscular coordination and training in the interpretation of sensory impressions.
c. Physical requirement – these requirements involves sitting, standing, walking, lifting, and so on.
d. Responsibilities – covers the areas of collecting input materials, arranging funds, generating, and maintaining, retrieving, and analysing records for decision making; and leading and supervising.
e. Working condition – highlights environmental factors such as noise, suffocation, illumination, smell, ventilation, hazards, and length of working hours.
After classifying the factors, the evaluators create a monetary scale, containing each of the five universal factors. Thereafter, the evaluator ranks the jobs according to the value for each factor. The factor comparison method determines the absolute value of the job. Then jobs can be ranked like most other job evaluation methods.
Method # 4. Point:
A rater using this method first identifies specific job factors; such as knowledge, and skills required to perform the job. Thereafter, he/she assigns numerical values to each factor. The algebraic sum of the points provides a quantitative assessment of a job’s relative worth. This method measures performance through scales and job factors rather than focusing on the entire job functions and ranking employees against each other.
The point method is usually seen as the most reliable and valid job evaluation method by employees compared to more subjective methods such as the job ranking method. This is the most commonly-used method.
The key elements of each job are referred to as ‘factors’. These factors are identified by the organization and then broken down into smaller components. Each factor is assessed separately and points are allocated according to the level needed for the job. The more demanding the job, the higher are the ‘points value’.
Factors usually assessed include knowledge and skills, people management, communication and networking, freedom to act, decision-making, working environment, impact and influence, and financial responsibility (www(dot)cipd(dot)co(dot)uk).
Comparison of the Job Evaluation Methods:
Anderson (1997) studied all the ‘pluses’ and ‘minuses’ of the various methods of job evaluation, and advocated that the ranking method was simpler (for smaller jobs), cheaper, and easy to explain. On the other hand, he stated that the result of ranking method could be superficial, having the possibility of perpetuation.
The classification method might suffer from the subjectivity of evaluators or raters and job overlaps. The factor comparison methods, though not complex, could discriminate between the jobs better because they are objective.
Despite being expensive, the point rating system, has difficulty in weightage fixing, and was identified to be scientific, logical, and objective.
While comparing two jobs, certain points are allotted to them.
CIPD suggests allotting the following:
1. Two points if it is considered to be of higher value
2. One point if it is regarded as equal worth
3. No point if it is less important.
Job Evaluation vs. Personal Specifications:
The human resource flow is managed and developed through a particular process. The first step of this process is forming a decision about the job and the qualities essential for its successful accomplishment. Job analysis may reveal that the requirements of the job are possessed by many employable persons with initial training.
In such cases, the selection process does not pose any problem. However, job analysis may also reveal that the requirements and the set of qualities, for a job like that of an astronaut are rarely found in a single person within the population. Such situation demands highly sophisticated selection process that consumes appreciable time.
Prior to hiring, for any position, organizations need to identify the criteria for job success and the characteristics required of the job-holder to achieve the success. The list of the various attributes and the personnel qualification which candidates should possess in order to achieve job success can be usefully structured to help and guide the interviewers during selection. Rodger (1952) and Fraser (1972), identified plans for personal specification. Apart from these two plans, another eight-point plan is also used.
For example, a job specification for a trainee manager s post in a retail store of a reputed company includes the following – The company is looking for people who are tough and talented. They should have a flair for business, know how to sell, and work as a member of a team and merely not as an individual.