MODULE 3

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 methodical way of confirming the value of job in relation to other
jobs in an organisation.

 According to ILO Report, the aim and objective of job evaluation system is to establish
an agreeable logical basis, the relative values of different jobs in a particular plant or
machinery.

DEFINITION

1. Edwin B.Flippo defines job evaluation as

“a systematic and orderly process of determining the worth of a job in relation to other jobs”.

2. Dale Yoder described job evaluation as

“a practice which seeks to provide a degree of objectivity in measuring the comparative value
of jobs within an organization and among similar organizations”.

OBJECTIVES OF JOB EVALUATION

 Establish a standard procedure for determining the relative worth of each job in an
organization;

 Ensure equitable wage for a job and reasonable wage differentials between different jobs
in a hierarchical organization;

 Determine the rate of pay for each job which is fair and equitable with relation to other
jobs in the plant, community or industry;

 Eliminate wage inequalities;

 Use as a basis for fixing incentives and different bonus plans

 Promote a fair and accurate consideration of all employees for advancement and transfer;

KSA (Knowledge, skills and abilities)

 Knowledge, skills and abilities—or KSA—is a common tool used by human resources
departments.

Prof. Ningambika G Meti Dept of MBA, SVIT

 They review a KSA statement, which explains a candidate’s qualities as they relate to an
open role, and determine if they’re a good fit.

 Learning more about KSAs and how to craft one can help you create a compelling
document.

 KSA is a description of qualifications written by a prospective candidate to describe their

knowledge, skills and abilities as they relate to an open role. It helps employers quickly
screen the candidates that are most suitable for each job.

 The KSA model was introduced as a hiring tool by the government, but the personnel
department is slowly discontinuing the use of it.

 While KSAs in the form of essays or narratives may no longer be listed as requirements,
they should not be dismissed. Employers may call it by other names, such as Professional
Technical Qualification or Quality Ranking Factors.

 The KSA is often presented as a supplement to the job application and requires candidates
to craft answers to job-specific questions, usually in the form of a one-page essay. Each
answer is evaluated on a scale from 1 to 100 as to how closely it matches the qualification
needed for the job.

THE JOB EVALUATION PROCESS:

OBTAIN JOB KSAOS, QUALIFICATIONS,

WORKINGCONDITIONS, AND ESSENITIAL DUTIES

EXAMINE COMPENSABLE FACTORS USING THE

RATING/WEIGHTING EVALUATION METHOD

ADD POINTS FOR EACH FACTOR TOGETHER, AND

ADD THESE SUBTOTALS TOGETHER TO
DETERMINE ONE AGGREGATE VALUE FOR THE
JOB

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STEP 1: OBTAIN JOB KSAOS, QUALIFICATIONS, WORKING CONDITIONS,
AND ESSENTIAL DUTIES

Obtain Job KSAOs

 Knowledge, skills, abilities and other characteristics (KSAOs) are the attributes
required to perform a job: Knowledge refers to the body of factual or procedural
information that can be applied, such as knowledge of foreign languages or computer
programming languages.

 Examples include the ability to: Organize and plan work (observed at work)

 Examples include skill in:

 Keyboard data entry.

 Motor vehicle operation.

 Computer software proficiency.

 Electronic or computer repair.

 Carpentry, plumbing and/or HVAC repair.

 Second language proficiency.

 This first step in the job evaluation process should be fairly straightforward and not
require a great deal of effort, as long as the job description is accurate and up to date.
 If the job description needs to be reassessed, then a job analysis will have to be
conducted first before proceeding.
 Essentially, the job description will be broken down here to prepare for objective
rating and weighting of all the elements that comprise the job, including its KSAO
(Knowledge, skills, abilities and other characteristics) requirements,
education/experience qualifications, essential duties and responsibilities working
conditions for determining its worth and appropriate compensation.
 These elements are referred to as compensable job factors and allow for the
standardization .
 Compensable job factors include any job element that has some degree of monetary
value to the organization and will contribute to its overall worth. Examples of
compensable jobs factors include following:
 Job-Specific knowledge, Educational Requirements, Level of Autonomy, Scope of
Accountability, Decision-Making, Authority Supervisory Responsibility,
Interpersonal Relationships, Work Environment Conditions, Schedule/Shift Needs,
Work-Related Risk/Safety, Task Quantity, Task Complexity, Task Frequency,
Physical Demands .
 Jobs will vary in terms of their compensable factors, but these general categories will
be the relevant and cover all the job elements among an organization's jobs, regardless

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 of function or level. Some jobs will require a large number of essentialities, while
other jobs will require few educational qualifications but come with a demanding
Some jobs will have a high-level educational requirement but offer comfortable
working candidates and responsibilities that are low complexity, while other jobs may
require fewer essential duties but have much higher complexity or risk involved.
 All these variations have to quantitatively assessed. The use of compensable factors
enables a human resources (HR) professional or consultant the ability to examine each
job element and determine a value based on its worth and importance , which us the
next step of the job evaluation process.

STEP2: EXAMINE COMPENSABLE FACTORS USING THE

RATING/WEIGHTING EVALUATION METHOD

 Though there are different job evaluation approaches that focus more on non
quantitative methods such as relative comparisons between jobs and rank ordering,
the job evaluation approach we will explore in this chapter involves the use of a
quantitative methodology consisting of numeric ratings and the weighting of
compensable factors.

 While non quantitative methods are certainly viable options, relative standards of
measurement such as job comparison and ranking do not provide information
regarding the actual distance between jobs, nor do they provide an overall numerical
score based on the rating of a job on specific criteria.

 If the goal a standardized approach that is objective and yields quantitative data, it is
recommended to implement a consistent and quantifiable job evaluation strategy
using the point-factor rating method, which we will examine next.

POINT FACTOR RATING METHOD

 Each compensable factor should have a standardized, quantifiable definition that

explains which it may appear across jobs (Worldat Work, 2007). The levels within
each compensable the factor as well as the different levels of the factor to evaluate the
scope and extent to factor's definition are rank ordered and a numeric point factor can
be assigned to each level within each definition.
 The point method is an extension of the factor comparison method.
 Each factor is then divided into levels or degrees which are then assigned points.
 Each job is rated using the job evaluation instrument.
 The points for each factor are summed to form a total point score for the job.

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 Example of Point factor levels for an education requirements compensable factor:

Compensable factor: Education Requirements

Level/Points Level/Definition
1/10pts High School Diploma or
GED
2/20pts Specialised Trade Certificate
3/30pts Associate's Degree
4/40pts Bachelor's Degree
5/50pts Master's Degree
6/60pts Doctoral Degree

Let’s look at few examples as above mentioned of how compensable factors may be
quantitatively defined with corresponding point factors. In each of these examples, there is a
relatively consistent number of levels, and each represents a significant distinction from the
prior level and the next level. If you have ever studied factor analysis in a statistics class, this
is the concept of parsimony- each level is a stand-alone entity; it neither redundantly overlaps
another factor nor is it obscured, because it is inappropriately rolled into another level. Once
a suitable number of levels is determined and represent how a factor is defined in terms of its
breadth or depth, we essentially have the infrastructure for a point-factor rating system. The
next component to be developed is a factor weighting system, which we will examine next.

Example of Point Factor levels for a Relevant Work Experience Compensable factor

Compensable Factor: Relevant Work Experience

Level/ Points Level/Definition

1/10pts Less than 1 year
2/20pts 1-3 years
3/30pts 4-6 years
4/40pts 7-9 years
5/50pts 10-12 years
6/60pts 13-15 years
7/70pts More than 15 years

Example of Point-Factor Levels for a Task Frequency Compensable Factor

Compensable Factor: Task Frequency

Level/Points Level/ Definition

1/10pts Less than 15% of total work time

2/20pts 16%-30% of total work time

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 3/30pts 31%-45% of total work time

4/40pts 46%-60% of total work time

5/50pts 61%-75% of total work time

6/60pts 76%-90% of total work time

7/70pts More than 90% of total work time

Example of Point-Factor Levels for a Supervisory Responsibility Compensable Factor

Compensable Factor: Supervisory Responsibility

Level/Points Level/Definition

1/10pts No supervisory responsibility

2/20pts Supervises 1-5 employees, but does not oversee an entire

department/shift

3/30pts Supervises 6-10 employees, but does not oversee an entire

department/shift

4/40pts Supervises 11-15 employees, but does not oversee an entire

department/shift

5/50pts Supervises more than 15 employees, but does not oversee an

entire department/shift

6/60pts Supervises 1-10 employees and oversees an entire

department/shift

7/70pts Supervises more than 10 employees and oversees an entire

department/shift

Factor Weights

A percentage representing the extent to which a compensable factor impacts an organisation’s

objectives.

Factors should be weighted based on the extent to which they impact an organization's
objectives. The greater the value a factor has to the organization in terms of achieving its
objectives and sustaining its vision and strategic goals, the higher the factor weighting should
be. Each weight is s represented as a percentage, and the weights of all the factors being
incorporated in the job evaluation should ultimately equal 100%. Let's consider the factors

Prof. Ningambika G Meti Dept of MBA, SVIT

we just defined and assigned points to illustrate the calculation of factor weights. If an
organization determines that relevant work experience is the most valuable factor of this
group, followed by education, with task frequency & supervisory responsibility having equal
value, then the weights could be set up in the following manner.

Relevant Work Experience 35%

Education 25%

Task Frequency 20%

Supervisory Responsibility 20%

Total 100%

 This type of weighting system is not unlike an academic assessment weighting system
that you may likely see on a course syllabus, in which a research paper is determined to
be the most critical element and is weighted as 35% of a student's total course grade,
followed by exams, which are averaged and weighted as 30% of the grade, a presentation,
which is weighted as 20% of the grade, and attendance/participation weighted as 15% of
the overall course grade.
 As you may imagine, there is no set formula or correct answer for setting factor weights;
it really depends on the needs of the organization and how each factor adds its own value
in terms of enabling the job incumbent to contribute to produce outcomes that are in
alignment with organizational objectives. It is important to note that there should be
consistency and agreement among the factors and their weights for similar jobs and job
families.
 For example, an HR professional should be able to examine all the jobs with supervisory
responsibility in an organization and validate that (a) supervisory responsibility is one of
the factors included in the job evaluation for every job and (b) that the factor is defined
and weighted consistently among all the jobs, even though they are in different
departments or business units.

STEP 3: ADD FACTOR POINTS TOGETHER TO DETERMINE OVERALL JOB

VALUE
 The final step in the job evaluation process is to calculate a weighted value for each
compensable factor by multiplying its point rating score by its respective weighting
percentage, and then add those numbers together to determine an overall job value.
 The following examples depict how the point-factor ratings and weighting percentages
used together enable the objective assessment of job value across disparate, unrelated
jobs.

Example1

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 Job: Senior Accountant

Relevant Work 40 pts x 35% = 14.00

Experience
Education: 50 pts x 25% = 12.50

Task Frequency 30 pts x 20% = 6.00

Task Complexity: 60 pts x 20% = 12.00

Total: 44.50

Example 2

Job Front Desk Receptionist

Relevant Work 20 pts x 35% = 7.00

Experience
Education: 10 pts x 25% = 2.50

Task Frequency: 60 pts x 20% = 12.00

Task Complexity: 30 pts x 20%= 6.00

Total: 27.50

 Perhaps the most important benefit of the point-factor method is that it provides the
standardized worth using this assessment technique. The point-factor method is a
pragmatic approach to objectivity, and consistency. There is virtually no subjectivity
involved when evaluating a job's ensures all jobs are clearly and fairly differentiated
based on their respective elements. Even combination of compensable factors with
varying point factors, these values will overlap among the jobs in an organization. This is
why the job of help desk supervisor or HR coordinator within an organization's
compensation structure, even though these jobs are quite different from each other. They
may represent the same overall worth to the organisation.
 Another critical benefit of job evaluation is that it will reduce the likelihood of pay
compression, which occurs when the pay among a set of jobs is very similar-clustered
together-even though they are quite different in terms of job factors. Conducting regular
job evaluations will and in alignment with a enable an organization to forecast and plan
pay range adjustments based comparable external job, on changing market rates and
shifting trends in job design and in-demand KSAOs, which will ensure external equity as
well as sustain internal equity between existing employees and new hires. Point-factor
plans can be developed in-house, purchased as off-the-shelf prebuilt systems, or custom

Prof. Ningambika G Meti Dept of MBA, SVIT

 developed by consultants specializing in job evaluation and strategic compensation
planning.

 Pay Compression:
A Compensation issue that occurs when the pay figures among a set of jobs are
clustered together, even when the jobs compensable factors are very different.

 External equity:
The extent to which an internal job is equitable and in alignment with a comparable
external job.

 Internal Equity:
The extent to which one internal job is equitable and in alignment with another
comparable internal job.

HAY GROUP—PIONEER IN JOB EVALUATION

 Hay Group was founded by Edward Hay, a senior personnel manager, in 1943. Even
back in the 1940s, Edward Hay believed "the most successful companies of the future
will be the ones that take full advantage of improved personnel techniques"
(Capitalism 2.0 Inc., 2018).

 His vision was to provide credible, accurate, and reliable data, tools, and advisory
services for organizations to use to effectively leverage the talent and skills of their
employees and to foster motivation and performance.

Prof. Ningambika G Meti Dept of MBA, SVIT

  Hay's point-factor methodology was based on a foundation for effective job
assessment that included the following components for ascertaining a job's value to
the organization:

1. Job-required knowledge

2. Problem-solving and analytical ability

3. Level and scope of essential job responsibilities

4. A job's working conditions

 The Hay guide charts are comprised of three Universal Factors , & within each factor are
categories referred to as dimensions:

ACCOUNTABILITY

It represents a job's measurable impact on an organisation and its value &comprised of the
following three dimensions:

1. Freedom to act: The degree of autonomy and empowerment in a job for decision making.
2. Scope: The range of organizational objectives and outcomes that the job impacts.
3. Impact: The degree of indirect and direct influence a job has on the specified range of
organizational objectives (scope)

KNOW-HOW

It represents the KSAOS that are necessary for exemplary job performance and is comprised
of the following three dimensions:.

1. Practical/technical knowledge: The necessary breadth and depth of technical/specialized

knowledge for effectively performing a job.

2. Planning, organizing, and integrating (managerial) knowledge: A job's required

managerial responsibilities that impact the achievement of functional/departmental
objectives, such as planning, organizing, staffing, directing, and controlling financial,
physical, and human resources

3. Communicating and infuencng skills: A job's required interpersonal and communication

skills for effective interaction with all internal and external stakeholders

PROBLEM SOLVING

Problem solving represents the extent to which the know-how of a job is used and leveraged
to identify, define, analyze, and effectively resolve problems, and consists of two dimensions:

1. Thinking environment: The extent to which a job involves the addressing of business
matters and issues that require a focus on strategy, policy, precedents, procedures, or rules

Prof. Ningambika G Meti Dept of MBA, SVIT

2. Thinking challenge: The complexity of problems handled in a job and the extent to which
their solutions add value to the organization

A fourth factor, working conditions, also exists and may be implemented for non exempt Jobs
and jobs involving a higher degree of physical labor and/or more physically demanding
contextual factors. This factor is comprised of the dimensions of physical effort, working
environment, sensory attention, and physical risks.

DETERMINING COMPENSATION USING JOB EVALUATION DATA

 Benchmark analysis: the process of comparing internal job data with external job data
sources to determine its market value.

 A benchmark job is one that has a standard and consistent set of responsibilities from
one organization to another and for which data is available in valid and reliable salary
surveys. To classify a benchmark job, data is compiled from appropriate salary surveys to
determine the median salary rate for the job.

 A salary benchmark job is defined as a job that is widespread across many industries. For
example, Accountant is a benchmark job. Some companies may title the job Bookkeeper
or Financial Planner. But if the job descriptions for these roles are the same, they would
each fall within the benchmarked job of Accountant.

 A benchmark job enables the accumulation and analysis of the labor market within a
company, industry, or regional area. Doing so enables employers, researchers,
government agencies, and other entities to make various types of determinations, from
hiring to promotions to training.

 Steps to be followed:

1. Validation that the internal jobs to be part of the benchmark analysis have up to date and
accurate job descriptions

2. Rigorous evaluation and selection of appropriate benchmark data sources

3. The correct comparison of the internal job with benchmark job.

LEGAL AND ETHICAL CONSIDERATIONS FOR JOB EVALUATION

 The benefit of conducting a job evaluation is that any overlap among jobs will be justified
by an accurate and reliable supporting assessment.
 This becomes particularly important for jobs that yet their unique distribution of
compensable job factors results in their being at the same are very different from one
another, such as a maintenance supervisor and a project manager, compensation level.
 Comparable worth :under the equity pay act of 1963, this concept states that jobs
determined to be equal in terms of their overall value to an organisation should receive
the same compensation.

Prof. Ningambika G Meti Dept of MBA, SVIT

 A legal consideration relevant to job evaluation is that of comparable worth, which falls
under the Equal Pay Act of 1963.
 Comparable worth states that jobs determined to be equal in terms of their overall value
to an organization should receive the same compensation.
 "Equal” does not necessarily mean identically the same in terms of job title, level, or
qualifications, but rather how jobs compare to each other in terms of having equivalent
skills, complexity, effort, working conditions, and responsibilities. Job evaluation is a
critically important process to ensure that jobs demonstrating comparable worth are paid
the same.

ONLINE SALARY SURVEY

 A salary survey is a tool specifically for remuneration specialists and managers to

define a fair and competitive salary for the employees of a company.
 The survey output is data on the average or median salary for a specific position, taking
into consideration the region, industry, company size, etc.
 Average salary, Inflation indicators and Salary budget averages are included in salary
survey.
 Salary surveys are typically conducted with numerous Organisations in a given
employment sector or industry in order to determine levels of pay for specific job groups
or classifications.

PURPOSE OF ONLINE SALARY SURVEY

 Salary Surveys are tools used to determine the median or average compensation paid
to employees in one or more jobs.
 Compensation data, collected from several employers, is analyzed to develop an
understanding of the amount of compensation paid.
 Companies with fewer than 500 employees spend an average of $2,000 annually on
salary surveys, and companies with more than 5,000 employees spend up to $15,000 or
more each year on these important data sources. Companies pay for compensation data
because the benefits exceed the costs.

5 top IT salary surveys

 Robert Half 2019 Technology & IT Salary Guide.

 Foote Partners' 2018 IT Salary and Skills Pay Survey Reports.
 Dice's 2018 Tech Salary Report.
 PayScale Salary Survey.
 Indeed's Search and Compare.

Prof. Ningambika G Meti Dept of MBA, SVIT

HOW TO CONDUCT A SALARY SURVEY
 Compensation analysts routinely conduct salary surveys to explain employment and
labor market trends. Their studies include salaries for specific occupations,
geographic areas or industries.
 Employers use the results of salary surveys to determine whether their own
compensation structures are aligned with industry salaries or to establish new
salary scales. Based on the type of data required, the process for conducting a salary
survey may differ slightly.
 List the industry and geographic area from which you'll gather your data. For
example, to focus your salary survey on nurses' hospital wages in a metropolitan area
with a population of fewer than 500,000, select four to six hospitals within that
geographic region.
 Determine the occupational groups for your study. Keep your occupations and titles
to those that are commonly used so you're comparing similar jobs. For example,
choose registered nurses, licensed practical nurses, certified nursing assistants and
charge nurses.
 Draft a letter to introduce yourself and the firm on behalf of which you're
conducting the study. Provide your credentials and a copy of previous salary and
wage surveys you've conducted. Employers often are reluctant to release information
about their salaries, so you'll need to establish yourself as a legitimate professional.
Provide a confidentiality statement with your letter.
 Construct your questionnaire. Using a questionnaire significantly decreases the
amount of paperwork involved in your survey.
 Assemble your returned surveys and analyze data according to hospital or other
business and tenure or seniority. Calculate salary averages for each position.
 In addition, produce mean and median salaries for each position and title. Produce
narratives for hospitals or the companies you've surveyed. Your narratives should
include details about each hospital, such as number of beds, employees, union
representation and bargaining units, number and kind of patient care units, university
or religious affiliation and nurse-patient ratio.
 For other businesses, include number of offices or branches, employees, union
representation and bargaining units and any other industry-specific information that
might bear on the salary data.
 Compile your analysis and narratives into a presentation or comprehensive
document you can deliver to employers. If you are conducting a survey independent
of a professional association, offer to provide your results to the association. In
addition, provide your survey participants with advance copies of the completed
survey.

IMPORTANT QUESTIONS:

1. Define JE? 3M
2. Elaborate JE Process? 10M

Prof. Ningambika G Meti Dept of MBA, SVIT

3. What is KSAO’S?3M
4. Examine Hay group model in JE? 7M
5. Describe online salary survey and steps involved in it? 7m
6. What is Benchmark Analysis? Examine the steps in BA with a an example ?7m
7. What is Compensable Job Factor? 3m
8. Define External Equity and Internal Equity? 3m

Prof. Ningambika G Meti Dept of MBA, SVIT