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Job Evaluation Methods

The document discusses various job evaluation methods including ranking, classification, factor comparison, and point-factor methods. The point-factor method involves rating jobs on compensable factors like skills, responsibilities, and efforts. Factors have degrees that are assigned point values. Total points are converted to salary grades to determine appropriate pay. While objective, point-factor methods require significant time and effort to implement accurately.

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Arcee Ardiente Mondragon
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4K views

Job Evaluation Methods

The document discusses various job evaluation methods including ranking, classification, factor comparison, and point-factor methods. The point-factor method involves rating jobs on compensable factors like skills, responsibilities, and efforts. Factors have degrees that are assigned point values. Total points are converted to salary grades to determine appropriate pay. While objective, point-factor methods require significant time and effort to implement accurately.

Uploaded by

Arcee Ardiente Mondragon
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Perhaps the simplest method of job evaluation is the ranking

method. According to this method, jobs are arranged from


highest to lowest, in order of their value or merit to the
organization. Jobs also can be arranged according to the
relative difficulty in performing them. The jobs are examined
as a whole rather than on the basis of important factors in the
job; and the job at the top of the list has the highest value and
obviously the job at the bottom of the list will have the lowest
value.
Jobs are usually ranked in each department and then the
department rankings are combined to develop an
organizational ranking.
The following table is a hypothetical illustration of ranking of
jobs.
Table: Array of Jobs according to the Ranking Method
Rank Monthly salaries
1. Accountant $ 3,000
2. Accounts clerk $ 1,800
3. Purchase assistant $ 1,700
4. Machine-operator $ 1,400
5. Typist $ 900
6. Office boy $ 600
The variation in payment of salaries depends on the variation
of the nature of the job performed by the employees.
Simple Ranking requires that evaluators order or rank
jobs according to their overall value to the organization.
Alternation Ranking involves ordering the job
description alternately at each extreme. Agreement is
reached among evaluators on which job is the most
valuable, then the least valuable; then the next-most
valued, then the next-least valued; and so on, until all
the jobs have been ordered.
Paired Comparison method involves comparing all
possible pairs of jobs under study.
Cost File Addresso- Ledger Junior Order Messen Total
graph Op.
Clerk Clerk Clerk Typist Clerk ger
Cost
Clerk
File
Clerk
Addresso-
graph Op.

Ledger
Clerk
Junior
Typist
Order
Clerk
Messen
ger
Simple or easy to Ranking is highly
understand and subjective in nature and
practice; may offend many
Best suited for small employees;
organization; Rankings are difficult to
Fast and less develop in a large,
complex organization;
expensive;
Can be legally challenged
Most commonly used
Unreliable
The general purpose of job classification
is to create and maintain pay grades for
comparable work across your
organization. According to this method, a
predetermined number of job groups or
job classes are established and jobs are
assigned to these classifications. This
method places groups of jobs into job
classes or job grades.
Following is a brief description of such a classification in an
office.
1. Class I - Executives: Further classification under this
category may be Office manager, Deputy Office manager,
Office superintendent, Departmental supervisor, etc.
2. Class II - Skilled workers: Under this category may have the
Purchasing assistant, Cashier, Receipts clerk, etc.
3. Class III - Semiskilled workers: Under this category may
come Steno typists, Machine-operators, Switchboard
operators, etc.
4. Class IV - Semiskilled workers: This category comprises
Daftaris, File clerks, Office boys, etc.
Less subjective when  Not useful when jobs are very
compared to the earlier different from each other
ranking method;  It is difficult to write all-
Easy to understand and
inclusive descriptions of a grade.
acceptable to almost all  When
employees without individual job
hesitation; descriptions and grade
Takes into account all the descriptions do not match well,
factors that a job comprises; the evaluators have the
May produce same results tendency to classify the job
using their subjective
as Point Method, but is less
costly. judgments.
A more systematic and scientific method of job evaluation.
Under this method, instead of ranking complete jobs, each
job is ranked according to a series of factors to obtain a
numerical value for each job and to arrive at a job
structure. Thus it may be classified as a quantitative
method.
Factor comparison itself is not widely used: it probably
represents less than 10% of the installations of job
evaluation plans. But the concepts on which it is based are
incorporated in numerous job evaluation plans, including
the one that is probably used the most, the Hay Plan.
The compensable factors used are usually (1) mental
requirements, (2) physical requirements, (3) skill
requirements, (4) responsibility, and (5) working
conditions, and other relevant factors (for instance,
know-how, problem solving abilities, accountability,
etc.). These are considered to be universal factors
found in all jobs. This means that one job-
comparison scale for all jobs in the organization may
be constructed, and this practice is often followed
upon installation of factor comparison.
Analytical and objective. Difficult to understand,
Reliable and valid as each job explain and operate.
is compared with all other
jobs in terms of key factors.
Its use of the same
Money values are assigned in criteria to assess all jobs
a fair way based on an agreed is questionable as jobs
rank order fixed by the job differ across and within
evaluation committee.
organizations.
Flexible as there is no upper
limitation on the rating of a Time consuming and
factor. costly.
The point-factor method, or point plan, involves
rating each job on several compensable factors
and adding the scores on each factor to obtain a
point total for a job. A carefully worded rating
scale is constructed for each compensable factor.
This rating scale includes a definition of the factor,
several divisions called degrees (also carefully
defined), and a point score for each degree. The
rating scales may be thought of as a set of rulers
used to measure jobs.
The most frequent factors employed in point systems are:
1. Skill (key factor): Education and training required,
Breadth/depth of experience required, Social skills
required, Problem-solving skills, Degree of discretion/use
of judgment, Creative thinking;
2. Responsibility/Accountability: Breadth of responsibility,
Specialized responsibility, Complexity of the work, Degree
of freedom to act, Number and nature of subordinate staff,
Extent of accountability for equipment/plant, Extent of
accountability for product/materials;
3. Effort: Mental demands of a job, Physical demands of a job,
Degree of potential stress.
The educational requirements (sub factor) under the skill
(key factor) may be expressed thus in the order of
importance.
Degree Define
1. Able to carry out simple calculations; High School
educated
2. Does all the clerical operations; computer literate;
graduate
3. Handles mail, develops contacts, takes initiative and
does work independently; post graduate
 
Assign point values to degrees after fixing a relative value
for each key factor.
Table: Point Values to Factors along a Scale
Point values for Degrees Total
Factor 1 2 3 4 5
Skill 10 20 30 40 50 150
Physical effort 8 16 24 32 40 120
Mental effort 5 10 15 20 25 75
Responsibility 7 14 21 28 35 105
 Working conditions 6 12 18 24 30 90

Maximum total points of all factors depending on their


importance to job = 540 (Bank Officer)
 Find the maximum number of points assigned to each job (after
adding up the point values of all sub-factors of such a job). This
would help in finding the relative worth of a job. For instance,
the maximum points assigned to an officer’s job in a bank come
to 540. The manager’s job, after adding up key factors + sub
factors’ points, may be getting a point value of, say 650 from the
job evaluation committee. This job is now priced at a higher
level.
 Once the worth of a job in terms of total points is expressed, the
points are converted into money values keeping in view the
hourly/daily wage rates. A wage survey, usually, is undertaken to
collect wage rates of certain key jobs in the organization. Let’s
explain this:
Table: Conversion of Job Grade Points into
Money Value
 Point range Daily wage rate (Rs) Job grades of key bank officials
500-600 300-400 1 Officer
600-700 400-500 2 Accountant
700-800 500-600 3 Manager I Scale
800-900 600-700 4 Manager II Scale
900-1,000 700-800 5 Manager III Scale
Highly stable over time Time, money, and
Perceived as valid by effort required to set up
users and employees Relies heavily on key
Likely to be reliable (benchmark) jobs, so if
among committee that key jobs and correct
assesses the jobs pay rates don’t exist,
Provides good data to the point method may
prepare a response to an not be valid
appeal
Job evaluation is a powerful tool in the
compensation and benefits specialist's
repertoire. Effective job evaluation helps you
gather information to develop job descriptions
that meet the changing needs of your
organization. By implementing a successful
job evaluation, you can develop an equitable
compensation plan and attract and retain
high-performing and talented employees.

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