Reward Management

Job Evaluation

Job Evaluation: Processes and

Learning Objectives:
Schemes
Define job evaluation and understand the

purpose, aims and basic features of job

evaluation;
Describe the different types of job
evaluation schemes;
Understand the design and process criteria
for job evaluation.

JOB EVALUATION DEFINED

Job evaluation is a systematic process for

evaluating jobs in an organization.

The systematic comparison helps in

establishing a rational pay structure.

Job evaluation can be analytical or non-

analytical.

Features of Job Evaluation

1. JE assess jobs not people;
2. JE is relative not absolute;
3. JE is based on job analysis;
4. Carried out by groups not individuals;
5. Degree of subjectivity is always present in
the process.

Difference b/w Job Analysis and

Job Evaluation
Job Analysis is the systematic way of

gathering information about the jobs, using

different tools.
Job Evaluation follows JA and it aims at

finding the worth of different jobs in an

organization.

Analytical Job Evaluation

Approach
Analytical job evaluation is the process of making

decisions about the value or size of jobs, which are

based on the analysis of various defined factors or
elements that are present in a job.
The different levels at which these factors are
present in the jobs indicate their relative worth.
The two common methods of analytical JE
approach are: the Factor Comparison Method and
the Point Factor Rating Method.

Non-Analytical Job Evaluation

Approach

Non-analytical job evaluation approach compares

the whole job to other whole jobs in an

organization to place them in a grade or a rank
order hierarchy.
The jobs are not analysed by reference to their
elements or factors.
The two most common methods included in nonanalytical approach are: Job Ranking and Job
Classification.

Ranking Method
Whole job is compared against other whole jobs in

the organization on some general notion/ job

content.
The 'worth' of a job is usually based on
judgements of some factor, such as skill, effort
(physical and mental), responsibility (supervisory
and fiscal), and working conditions, according to
their contribution towards the organizational goal.

Continued
Jobs are arranged in a hierarchy from highest

to lowest, in order to their value to the

organization.
Jobs can also be arranged according to their
relative difficulty in performing them.
Jobs are arranged in each department and
then department rankings are combined to
develop an organizational ranking.

Ranking of Jobs in a Department

Rank

Job

Monthly Salary

Accountant

$ 2000

Accounts Clerk

$1800

Purchase Assistant

$1400

Typist

$900

Office boy

$600

Advantages and Disadvantages

of
Ranking
Method

Advantages
o Simple;
o Very effective when there are relatively few jobs to be
evaluated (less than 30).

Disadvantages
o Difficult to administer as the number of jobs increases;
o Rank judgements are subjective;
o Since there is no standard used for comparison, the ranking

process would have to be repeated each time a new job is

added to the organization.

Job Classification Method

A series of classes and grades are defined.
Each class will describe a group of jobs.
Each grade in a class will represent different levels

of difficulty and responsibility.

Jobs are then matched with the class and grade
descriptions and assigned to the class and grade
that best matches.

Example of Job Classification

Method
Class/Grade
Rank
Employees
Class 1/ Grade 10 to 12

Executives

Office Manager, Deputy

Office Manager, Office
Superintendent, etc.

Class 2/ Grade 7 to 9

Skilled-Workers

Stenographers, machine
operators, Accounts clerk
etc.

Class 3/ Grade 4 to 6

Semi-Skilled Workers

Purchasing Assistant,
Cashier, Receipts Clerk,
etc.

Class 4/ Grade 1 to 3

Less-Skilled or Unskilled
Workers

Office Boys, Gardner,

Janitor, etc.

Advantages and Disadvantages

of Job Classification Method
Advantages
o Less subjective as compared to Ranking Method;
o Easily understandable.
Disadvantages
o Job requirements are not taken into account;
o Difficult to write all-inclusive description of a grade;
o The evaluator uses subjective judgements to place a job in

a class and grade;

o Some jobs may appear to fit within more than one
grade/category.

Factor Comparison Method

A scientific method designed to rank job roles

based on a breakdown of factors rather than the

role as a whole.
The ultimate goal of factor comparison is to assign
the relative parts of each job role a financial value
i.e. the amount of compensation offered for that
part of the role.

Process of Factor Comparison

Method
Steps:
o Select key jobs (say 15 to 20), representing

wage/salary across the organization,

representing as many departments as
possible;
o Select 4 or 5 factors that are common to all
jobs, i.e., skill, effort, responsibility, and
working conditions, etc.;

Continued
o Rank the selected jobs under each factor;
o Assign monetary value to each factor;
o Price all the jobs.

Factor Comparison Method

Job

Skill

Effort

Responsibility Working
Conditions

Hourly
Rate

Secretary

4.50

2.00

2.00

0.50

$9

Admin
Asst.

5.50

2.50

2.50

0.50

$11

Supervisor

6.00

3.50

4.00

1.50

$15

Manager

9.00

3.50

7.00

1.50

$21

Advantages and Disadvantages

of Factor Comparison Method
Advantages

o More sophisticated than the previous two methods;

o Simple and less subjective;
o This method can be applied to a wide range of jobs;
o It can also be applied to newly created jobs.
Disadvantages
o The pay for each factor is based on judgements that

are subjective.

Point Factor Rating Method

Compensable factors are identified and jobs

are broken down into a set of factors and

sub-factors to determine the worth of all
jobs in an organization.
It is assumed that each of the factors and
sub-factors will be common to all the jobs,
but present in different degrees.

Process of Point Factor Rating

Select key jobs in the organization;
Identify the common compensable factors (critical

factors) of all the key job;

Divide each critical factor into sub-factors;
Develop levels with respect the factors and subfactors;
Each factor is then divided into levels or degrees;
Define each level with respect to its factor;

Continued
Develop point manual/matrix and allocate points to a

job under each factor heading according to the extent

to which it is present in the job;
The separate factor scores are then added together to
give a total score that represents job size;
The process is repeated for all the jobs.

Point Factor Matrix

Compensable Factors
Skill
Total Points = 400
40 (400)
Education
Experience
Effort
Total Points = 300
30 (300)
Physical
Mental
Responsibility
Total Points = 200
20 (200)
Supervisory
Fiscal
Working Conditions
Total Points = 100
10 (100)
Location
Hazardous

Grand Total Points =

Weights

Degrees
4

20

25

30

35

40

12
8

16
9

20
10

24
11

28
12

10

15

20

25

30

4
6

6
9

8
12

10
15

12
18

12

14

16

18

20

10
2

11
3

12
4

13
5

14
6

10

1
1

2
2

3
3

4
4

5
5

40%=400

30%=300

20%=200

10%=100

87 (87 x 10) = 870

Defining Degrees for Factors

Degree
1

Define
Work requiring the following of specific verbal or written instructions which are readily
understandable without a prior knowledge of the job in order to carry out tasks which are
repetitive and simple in nature, or are performed under very close supervision on short work
assignments.

Work requiring from detailed instructions and making minor decisions to some judgment. The
method of work is specified and the equipment provided, but the involve making
comparisons, recognizing errors, and exercising care in the performance of the job rather than
planning and selecting a course of action.

Work requiring planning and performing of work of some complexity, involving a sequence
of operations, and the analysis of facts to determine what action should be taken within the
limits of standard practices or recognized methods.

Work requiring planning and performing of unusual and difficult work where only general
operation methods are available and the making of decisions involving the use of considerable
ingenuity, initiative, and judgment.

Work requiring independent planning, originality, and imagination to devise and develop
tools, equipment, and methods for performing involved and complicated jobs, using or
modifying not only known methods but contriving new techniques as needed.

Merits and Demerits of Point

Factor Rating
Advantages
o Widely used and superior method of JE;
o Forces rates to look into all the key factors and sub-

factors of a job;
o The methodology underlying this method
contributes to a minimum rating error.
Disadvantages
o Complex and time consuming;
o May be taxing while evaluating managerial jobs,
where everything cannot be quantifiable.

Features of Analytical Job

Evaluation
The main features of analytical job
o
o
o
o

evaluation are:
systematic;
judgemental;
concerned with the job not the person; and
deals with internal relativities.

Continued
Systematic

Job evaluation is systematic in that the relative value or

size of jobs is determined on the basis of factual
evidence on the characteristics of the jobs, which has
been analysed within a structured framework of
criteria or factors.
Judgemental
Human judgement has to be exercised at some points in
the job evaluation process. Although job evaluations
are based on factual evidence, this has to

Continued
be interpreted; especially the levels at which
demands are present in a job. Judgement is required
in making decisions on the level, and therefore, in a
point-factor or factor comparison scheme, the score.
The aim is to maximize objectivity but it is difficult
to eliminate a degree of subjectivity.

Concerned with the job not the person:

when evaluating a job the only concern is the content
of that job in terms of the demands made on the job
holder not performance of the incumbent.

Continued
Concerned with internal relativities:

It is not concerned with external relativities, that is,

the relationship between the rates of pay of jobs in
the organization and the rates of pay of
comparable jobs elsewhere (market rates).

Techniques for Designing Jobs

Basically, there are four techniques used in

the design of jobs. These include Job

Simplification, Job Enlargement, Job
Enrichment, and Job Rotation.

Job Simplification
A technique, whereby jobs are divided into

smaller components and subsequently

assigned to workers as whole jobs.
Simplification of work requires that jobs be
broken down into their smallest units and
then analysed. Each resulting sub-unit
typically consists of relatively few
operations. These subunits are then assigned
to the workers as their total job.

Example of Job Simplification

Many fast food restaurants such as McDonalds,

Burger King etc., use simplification because

employees can learn tasks rapidly; short work
cycles allow task performance with little or no
mental effort and low-skilled and low-paid
employees can be hired and trained easily.
On the negative side, job simplification results in
workers experiencing boredom, frustration,
alienation, lack of motivation and low job
satisfaction. This, in turn, leads to lower
productivity and increased cost.

Job Enlargement-Horizontal
Loading

This technique expands a job horizontally.

It increases job scope; that is, it increases

the number of different operations required
in a job and the frequency with which the
job cycle is repeated. By increasing the
number of tasks an individual performs, job
enlargement increases the job scope, or job
diversity.

Example of Job Enlargement

Instead of only sorting the incoming mail

by department, for instance, a mail sorter's

job could be enlarged to include physically
delivering the mail to the various
departments or running outgoing letters
through the postage meter.

Job Rotation
It refers to the movement of an employee from one

job to another. Jobs themselves are not actually

changed, only the employees are rotated among
various jobs. An employee who works on a routine
job moves to work on another job for some
hours/days/months and returns to the first job.
This measure relieves the employee from the
boredom and monotony, improves the employee's
skills regarding various jobs and enhances an
employees self-image and provides personal
growth.

Job Enrichment- Vertical

In order to motivate employees, the job itself must
Loading
provide opportunities for achievement recognition,
responsibility, increased competence,
advancement and growth.
The basic idea is to restore to jobs the elements of
interest that were taken away under intensive
specialisation.
The technique attempts to build into jobs a higher
sense of challenge and achievement, through
vertical job loading.

Unique Aspects of Job

Enrichment
It has four unique aspects:
It changes the basic relationship between

employees and their work. Interesting and

challenging work, as studies have proved, can be a
source of employee satisfaction;
It changes employee behaviours in ways that
gradually lead to more positive attitudes about the
organisation and a better self-image. Feeling of
autonomy and personal freedom help employees
view their jobs in a favourable way;

Continued
It helps the employer to bring about

organisational change easily, securing

employee cooperation and commitment;
Job enrichment can humanise an
organisation. Individuals can experience the
psychological satisfaction that comes from
developing new competencies and doing a
job well. Individuals are encouraged to
grow and push themselves.