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 needs to be differentiated from job analysis. Job analysis is a systematic way of gathering
information about a job. Every job evaluation method reuires at least some basic job analysis in order to
provide factual information about the jobs concerned. !hus" job evaluation begins with job analysis and
ends at that point where the worth of a job is ascertained for achieving pay euity between jobs.
# Job evaluation methods
o #.$ %anking method
o #.& 'lassification method
o #.( )actor comparison method
o #.# *oint method
o #.+ ,arket *ricing
- !echniues for designing jobs
o -.$ Job simplification
o -.& Job enlargement
o -.( Job rotation
o -.# Job enrichment
Features[edit]
!he purpose of job evaluation is to produce a ranking of jobs on which a rational and acceptable pay
structure can be built. !he important features of job evaluation may be summarised thus.
It tries to assess jobs" not people.
!he standards of job evaluation are relative" not absolute.
!he basic information on which job evaluations are made is obtained from job analysis.
Job evaluations are carried out by groups" not by individuals.
/ome degree of subjectivity is always present in job evaluation.
Job evaluation does not fi0 pay scales" but merely provides a basis for evaluating a
rational wage structure.
*urpose of Job evaluation
1alance & goals. Job evaluation aims at balancing two goals i.e." internal euity and e0ternal
competitiveness. internal euity.2 paying different jobs differently" based on what the job entails. And"
e0ternal competitiveness .2 *aying satisfactory performers what the market is paying.
)ocus on job content. 2 It basically focuses on what each individual is doing their part of the jobs
efficiently and effectively.
%anks all jobs .2 It seeks to rank all the jobs in a hierarchy with in a hierarchy. !his helps to create
job structure as well as payment structure for the organization.
Process of job evaluation[edit]
!he process of job evaluation involves the following steps.
Gaining acceptance. 1efore undertaking job evaluation" top management must e0plain the
aims3 and uses of the programme to the employees and unions. !o elaborate the program further"
oral presentations could be made. 4etters" booklets could be used to classify all relevant aspects of
the job evaluation programme.
Creating job evaluation committee. It is not possible for a single person to evaluate all the key
jobs in an organization. 5sually a job evaluation committee consisting of e0perienced employees"
union representatives and 6% e0perts is created to set the ball rolling.
Finding the jobs to be evaluated. Every job needs not be evaluated. !his may be too ta0ing
and costly. 'ertain key jobs in each department may be identified. 7hile picking up the jobs" care
must be taken to ensure that they represent the type of work performed in that department.
Analysing and preparing job description. !his reuires the preparation of a job description and
also an analysis of job needs for successful performance.
Selecting the method of evaluation. !he most important method of evaluating the jobs must be
identified now" keeping the job factors as well as organisational demands in mind.
Classifying jobs. !he relative worth of various jobs in an organisation may be found out after
arranging jobs in order of importance using criteria such as skill reuirements" e0perience 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. 7eights can be assigned to each
such factor. 7hen we finally add all the weights" the worth of a job is determined. !he points may
then be converted into monetary values.
Installing the programme[edit]
8nce the evaluation process is over and a plan of action is ready" management must e0plain it to
employees and put it into operation.
evie!ing periodically[edit]
In the light of changes in environmental conditions 9technology" products" services" etc.3 jobs need to be
e0amined closely. )or e0ample" the traditional clerical functions have undergone a rapid change in
sectors like banking" insurance and railways" aftercomputerisation. :ew job descriptions need to be
written and the skill needs of new jobs need to be duly incorporated in the evaluation process. 8therwise"
employees may feel that all the relevant job factors 2 based on which their pay has been determined 2
have not been evaluated properly.
)or job evaluation to be practicable it is necessary.
that jobs can be easily identified
that there are sufficient differences between different jobs; and
that agreements know the relative importance or worth of different jobs can be negotiated
between the enterprise and its employees and/or their representatives..
"enefits[edit]
!he pay offs from job evaluation may be stated thus.
It tries to link pay with the reuirements of the job.
It offers a systematic procedure for determining the relative !orth of jobs# $obs are ran%ed
on the basis of rational criteria such as s%ill& education& e'perience& responsibilities& ha(ards&
etc#& and are priced accordingly.
An euitable wage structure is a natural outcome of job evaluation. An unbiased job evaluation
tends to eliminate salary ineuities by placing jobs having similar reuirements in the same salary
range.
Employees as well as unions participate as members of job evaluation committee while
determining rate grades for different jobs. !his helps in solving wage related grievances uickly.
Job evaluation" when conducted properly and with care" helps in the evaluation of new jobs.
It points out possibilities of more appropriate use of the plant<s labour force by indicating jobs that
need more or less skilled workers than those who are manning these jobs currently.
$ob evaluation methods
!here are three basic methods of job evaluation. 9$3 ranking" 9&3 classification" 9(3 factor comparison.
7hile many variations of these methods e0ist in practice" the three basic approaches are described here.
an%ing method
*erhaps 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 can also be
arranged according to the relative difficulty in performing them. !he jobs are e0amined as a whole rather
than on the basis of important factors in the job; 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. $obs are usually ran%ed in each
department and then the department rankings are combined to develop an organi(ational ran%ing.
!he variation in payment of salaries depends on the variation of the nature of the job performed by the
employees. !he ranking method is simple to understand and practice and it is best suited for a small
organisation. Its simplicity however works to its disadvantage in big organisations because rankings are
difficult to develop in a large" comple0 organisation. ,oreover" this kind of ranking is highly subjective in
nature and may offend many employees. !herefore" a more scientific and fruitful way of job evaluation is
called for.
Classification method
According to this method" a predetermined number of job groups or job classes are established and jobs
are assigned to these classifications. !his method places groups of jobs into job classes or job grades.
/eparate classes may include office" clerical" managerial" personnel" etc. )ollowing is a brief description
of such a classification in an office.
Class I ) *'ecutives. )urther classification under this category may be 8ffice ,anager" =eputy
office manager" 8ffice superintendent" =epartmental supervisor" etc.
Class II ) S%illed !or%ers. 5nder this category may come the *urchasing assistant" 'ashier"
%eceipts clerk" etc.
Class III ) Semis%illed !or%ers. 5nder this category may come /tenotypists" ,achine2
operators" /witchboard operator etc.
Class I+ ) ,ns%illed !or%ers. !his category comprises =aftaris" )ile clerks" 8ffice boys" etc.
!he job classification method is less subjective when compared to the earlier ranking method. !he system
is very easy to understand and acceptable to almost all employees without hesitation. 8ne strong point in
favour of the method is that it takes into account all the factors that a job comprises. !his system can be
effectively used for a variety of jobs. !he weaknesses of the job classification method are.
Even when the reuirements of different jobs differ" they may be combined into a single category"
depending on the status a job carries.
It is difficult to write all2inclusive descriptions of a grade.
!he method oversimplifies sharp differences between different jobs and different grades.
7hen individual job descriptions and grade descriptions do not match well" the evaluators have
the tendency to classify the job using their subjective judgments.
Factor comparison method
A more systematic and scientific method of job evaluation is the factor comparison method. !hough it is
the most comple0 method of all" it is consistent and appreciable. 5nder this method" instead of ranking
complete jobs" each job is ranked according to a series of factors. !hese factors include mental effort"
physical effort" s%ill needed" responsibility" supervisory responsibility" !or%ing conditions and
other such factors 9for instance" know2how" problem solving abilities" accountability" etc.3. *ay will be
assigned in this method by comparing the weights of the factors reuired for each job" i.e." the present
wages paid for key jobs may be divided among the factors weighted by importance 9the most important
factor" for instance" mental effort" receives the highest weight3. In other words" wages are assigned to the
job in comparison to its ranking on each job factor.
!he steps involved in factor comparison method may be briefly stated thus.
Select %ey jobs -say ./ to 012& representing wage/salary levels across the organisation. !he
selected jobs must represent as many departments as possible.
Find the factors in terms of !hich the jobs are evaluated 9such as skill" mental effort"
responsibility" physical effort" working conditions" etc.3.
an% the selected jobs under each factor 9by each and every member of the job evaluation
committee3 independently.
Assign money value to each level of each factor 9e0ample. consider problem solving is one of
the factor" what level of problem solving is reuired >basic" intermediate or advance?3 and determine
the wage rates for each key job.
!he wage rate for a job is apportioned along the identified factors.
All other jobs are compared with the list of key jobs and wage rates are determined. An e0ample
of how the factor comparison method works is given below.
After the wage rate for a job is distributed along the identified and ranked factors" all other jobs in the
department are compared in terms of each factor. /uppose the job of a <painter< is found to be
similar electrician in skill 9$+3" fitter in mental effort 9$@3" welder in physical effort 9$&3 cleaner in
responsibilityA 9B3 and labourer in working conditions 9#3. !he wage rate for this job would be
9$+C$@C$&CBC#3 is#D.
Point method
!his method is widely used currently. 6ere" jobs are e0pressed in terms of key factors. *oints are
assigned to each factor after prioritizing each factor in order of importance. !he points are summed up to
determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades. !he
procedure involved may be e0plained thus.
.# Select %ey jobs. Identify the factors common to all the identified jobs such as skill" effort" responsibility"
etc.
0# =ivide each major factor into a number of sub factors. Each sub factor is defined and e0pressed clearly
in the order of importance" preferably along a scale.
!he most fre3uent factors employed in point systems are 9i3 S%ill 9key factor3; *ducation and training
reuired" "readth4depth of e'perience reuired" Social s%ills reuired" Problem)solving s%ills"
5egree of discretion4use of judgment" Creative thin%ing 9ii3 esponsibility4Accountability. "readth
of responsibility& Speciali(ed responsibility" Comple'ity of the !or%" 5egree of freedom to act"
6umber and nature of subordinate staff" *'tent of accountability for e3uipment/plant" *'tent of
accountability for product4materials; 9iii3 *ffort. ,ental demands of a job" Physical demands of a job"
5egree of potential stress
!he educational reuirements 9sub factor3 under the skill 9key factor3 may be e0pressed thus in the order
of importance.
7# )ind the ma0imum number of points assigned to each job 9after adding up the point values of all sub2
factors of such a job3.
!his would help in finding the relative worth of a job. )or instance" the ma0imum points assigned to an
officer<s job in a bank come to +#@. !he manager<s job" after adding up key factors C sub factors points"
may be getting a point value of say B+@ from the job evaluation committee. !his job is now priced at a
higher level.
8& 8nce the worth of a job in terms of total points is e0pressed" the points are converted into money
values keeping in view the hourly/daily wage rates. A wage survey is usually undertaken to collect wage
rates of certain key jobs in the organization. 4et<s e0plain this.
9ar%et Pricing
,arket pricing is the process for determining the e0ternal value of jobs" allowing you to establish wage
and salary structures and pay rates that are market sensitive. Job matching session is conducted.
9erits and demerits
!he point method is a superior and widely used method of evaluating jobs. It forces raters to look into all
key factors and sub2factors of a job. *oint values are assigned to all factors in a systematic way"
eliminating bias at every stage. It is reliable because raters using similar criteria would get more or less
similar answers. !he methodology underlying the approach contributes to a minimum of rating error
9%obbins p. (B$3. It accounts for differences in wage rates for various jobs on the strength of job factors.
Jobs may change over time" but the rating scales established under the point method remain unaffected.
8n the negative side" the point method is comple0. *reparing a manual for various jobs" fi0ing values for
key and sub2factors" establishing !age rates for different grades& etc#& is a time consuming process&
According to =ecenzo and %obbins" Ethe key criteria must be carefully and clearly identified" degrees of
factors have to be agreed upon in terms that mean the same to all rates" the weight of each criterion has
to be established and point values must be assigned to degreesE. !his may be too ta0ing" especially while
evaluating managerial jobs where the nature of work 9varied" comple0" novel3 is such that it cannot be
e0pressed in uantifiable numbers.
:imitations of job evaluation
$. Job evaluation is not e0actly scientific.
&. !he most of the techniues are difficult to understand" even for the supervisors.
(. !he factors taken by the programme are not e0haustive.
#. !here may be wide fluctuations in compensable factors in view of changes in technology" values
and aspirations of employers" etc.
+. Employees" trade union leaders" management and the programme operators may assign different
weight to different factors" thus creating grounds for dispute.
Conduct a job evaluation
"y Susan 9# ;eathfield
Four employees want fair pay. Four employees want regular raises. Fou want to attract and retain
talented employees in your organization. Four employees need clarity about their roles and
responsibilities as well as about what<s e0pected from them. Job evaluation" performed effectively and
used to clarify and revise job descriptions and position responsibilities" is your solution to all of these
issues.
As a compensation and benefits specialist" you are responsible for developing a fair compensation plan.
Job evaluation is a tool used to evaluate the worth of each job in your organization and in today<s labor
market. A successful job evaluation system can help you make your organization<s pay system euitable"
understandable" legally defensible" approachable" and e0ternally competitive. Fou can use job
evaluations to.
'larify job descriptions so that employees understand the e0pectations of their roles and the
relationship of their roles to other jobs within the organization.
Attract desirable job candidates.
%etain high2potential employees.
<hat is job evaluation=
Job evaluation is a systematic process that you can use to determine the relative level" importance"
comple'ity" and value of each job in your organization. 7ith a successful job evaluation system" you
can compare each job to other jobs within your organization.
It is best to perform job evaluation after !or% analysis. Job evaluation" in conjunction with work analysis"
helps you develop a job description that is broad" descriptive" and fle0ible so that you can adapt the
description to your organization<s changing needs.
Assess employee contribution
Job evaluation helps you establish and ualify differences in employee contribution across jobs. !hese
differences provide a foundation for employee compensation decisions. !he job evaluation process
measures the elements of a job and produces an overall score. In each case" you evaluate the job" not
the employee who performs the job.
Assess job content and value
!ypically" job evaluation assesses both the content of a job and the value of a job for your organization.
$ob content refers to the type of work performed and the skills and knowledge necessary to
perform the work.
$ob value refers to the job<s degree of contribution in meeting your organization<s goals and the
degree of difficulty in filling the job.
Factors in job evaluation
Job evaluators often assess jobs based on these factors.
!raining level or ualifications reuirements
Gnowledge and skills reuirements
'omple0ity of tasks
Interaction with various levels of the organization
*roblem2solving and independent judgment
Accountability and responsibility
=ecision2making authority
=egree of supervision reuired
'ross2training reuirements
7orking conditions
=egree of difficulty in filling job
Create a team
!o promote widespread support" understanding" and acceptance across your organization" create a
cross2functional team to work on job evaluation. !he team should represent various levels and jobs within
your organization.
/elect the job evaluation method
'ommunicate with employees
Steps in job evaluation
!he standard steps in job evaluation include.
$. Introduce the concept of job evaluation.
&. 8btain management approval for the evaluation.
(. !rain the job evaluation selection team.
#. %eview and select the job evaluation method.
+. Hather information on all internal jobs.
B. 5se information to fully e0pand job descriptions.
D. 5se the selected job evaluation method to rank jobs hierarchically or in groups.
-. 4ink the ranked jobs with your compensation system or develop a new system.
I. Implement the job evaluation and compensation systems.
$@. *eriodically review your job evaluation system and the resulting compensation decisions.
Analyze job evaluation methods
Five job evaluation systems are most commonly used.
%anking
'lassification
*oint evaluation
)actor comparison
,arket comparison
an%ing
%anking jobs is the easiest" fastest" and least e0pensive approach to job evaluation. It is also most
effective in smaller organi(ations with few job classifications. !o rank positions" order jobs from highest
to lowest based on their relative value to your organization.
!he process of job ranking typically assigns more value to jobs that reuire managerial or technical
competencies. ,ore value is also assigned to jobs that supervise" e0ercise decision2making authority" or
rely on independent judgment. )or e0ample" a job2ranking system might rank the job of 'E8 as the most
valued job within the organization and the job of product assembler as the least valued.
Advantages /implicity is the main advantage in using a ranking system. It is also easy to
communicate the results to employees" and it is easy to understand.
5isadvantages %anking jobs is subjective. Jobs are evaluated" and their value and comple0ity
are often assessed on the basis of opinion. Also" when creating a new job" e0isting jobs must be reranked to
accommodate the the new position.
Classification
!he general purpose of job classification is to create and maintain pay grades for comparable work
across your organization.
!o conduct a job classification. )irst" write descriptions for a category of jobs; ne0t" develop standards for
each job category by describing the key characteristics of those jobs in the category; finally" match all jobs
to the categories based on the similarity of tasks" the decision2making e0ercised" and the job<s
contribution to the organization<s overall goals.
5niversities" government employers and agencies" and other large organizations with limited resources
typically use job classification systems. !hese types of organizations have many types of jobs at diverse
locations and must maintain euitable and fair standards across all work settings.
Advantage Job classification is simple once you establish your categories. Fou can assign
new jobs and jobs with changing responsibilities within the e0isting system.
5isadvantages Job classification is subjective" so jobs mightfall into several categories.
=ecisions rely on the judgment of the job evaluator. Job evaluators must evaluate jobs carefully because
similar titles might describe different jobs from different work sites.
Point evaluation
*oint evaluation is the most widely used job evaluation method. In a point evaluation system" you e0press
the value of a particular job in monetary terms. Fou first identify compensable factors that a group of jobs
possess. 1ased on these factors" you assign points that numerically represent the description and range
of the job.
E0amples of compensable factors are skills reuired" level of decision2making authority" number of
reporting staff members" and working conditions.
Advantage !his method is often viewed as less biased than other methods because the job
evaluator assigns each job<s total points before the compensable factors become part of the euation.
5isadvantages /ubjective decisions about compensable factors and the associated points
assigned might be dominate. !he job evaluator must be aware of biases and ensure that they are not
represented in points assigned to jobs that are traditionally held by minority and female employees.
Factor comparison
Job evaluators rank jobs that have similar responsibilities and tasks according to points assigned to
compensable factors. !he evaluators then analyze jobs in the e0ternal labor market to establish the
market rate for such factors. Jobs across the organization are then compared to the benchmark jobs
according to the market rate of each job<s compensable factors to determine job salaries.
Advantage !his method results in customized job2ranking.
5isadvantage 'ompensable factor comparison is a time2consuming and subjective process.
,arket comparison
Job evaluators compare compensation for your organization<s jobs to the market rate for similar jobs. !his
method reuires accurate market2pricing surveys.
!he value of job evaluation
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. 1y implementing a successful job evaluation" you can develop an euitable compensation
plan and attract and retain high2performing and talented employees.
,ore information
'onduct an effective pay study
5se market pay data to develop appropriate pay scales
=evelop a pay structure that reflects your company values
What is job evaluation?
!here are two basic types of job evaluation schemes" <analytical< and <non2analytical<.
Analytical schemes
Jobs are broken down into components or demands" known as factors" and scores are awarded for each
factor. !he final total gives the overall rank order of jobs.
An analytical job evaluation scheme can provide a defence against a claim of eual pay for work of eual
value" but only if you can demonstrate that the scheme is free of se0 bias. Fou need to ensure that you
can do this. !he chec%lists will help you to do so.
6on)analytical schemes
7hole jobs are compared with each other. !here is no attempt to break the jobs down and analyse them
under their various demands or components.
:on2analytical schemes are particularly prone to se0 discrimination because comparative judgements
about jobs made by the evaluators will have little objective basis" other than the traditional value of the
job.
E0amples of non2analytical schemes include job ranking and paired comparisons. !hese represent
different ways of drawing up a list of jobs in rank order.
!he rationale for non2analytical job evaluation is that it produces a hierarchy of jobs that appro0imates to
the <felt2fair< ranking of these jobs in the minds of the people working in the organisation. 1ut" in many
cases"whether the jobholders are predominantly male or predominantly female influences the placing of
that job within the overall rank order. :on2analytical job evaluation can thus perpetuate a situation in
which the jobs most freuently performed by women are regarded as being of less value than the jobs
mostly performed by men.
A non)analytical job evaluation scheme does not provide you !ith a defence against a claim of
e3ual pay for !or% of e3ual value#
job evaluation
Definition
An assessment of the relative worth of various jobs on the basis of a consistent set of job
and personal factors, such as qualifications and skills required.
The objective of job evaluation is to determine which jobs should get more pay than others.
Several methods such as job ranking, job grading, and factor comparison are employed in job
evaluation. Research indicates, however, that each method is nearly as accurate and reliable as
the other in ranking and pricing different jobs. Job evaluation forms the basis
for wage and salary negotiations.