POINT METHOD OF JOB EVALUATION

Steps in Point Method

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3. 4. 5.

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Select Benchmark Jobs Choose Compensable Factors Define Factor Degrees Determine Weight of each Factor Determine Point Values Verify Factor Degrees and Point Values Evaluate All Jobs

Steps in Point Method

Select Benchmark Jobs Generic jobs with similar and agreed upon characteristics Relatively stable Represent entire range of jobs in company Generally accepted in the labor market for purposes of setting pay levels

Steps in Point Method

Choose Compensable Factors Universal factors:
Skill Effort Responsibility Working Conditions

Steps in Point Method

Define Factor Degrees Provides levels within each factor or subfactor Best to define each level in job-specific terms Fewer degrees required if system only needs to cover a smaller range of jobs Determine Weight of each Factor

Steps in Point Method

Determine Point Values Set arbitrary maximum (1000 pts) Determine weighted maximum per factor
If responsibility was weighted 10%, it can have maximum score of 100

Divide factor maximum by number of degrees

If 4 factors, 25 pts per degree

Steps in Point Method

Verify Factor Degrees and Point Values Committee members score random set of jobs Review scores to determine logical consistency and fairness Make sure points are consistent with business strategy of your firm Adjust as necessary

Example

Merits
Merits - The points rating has several advantages. The

major merits of the method are: 1. It is the most comprehensive and accurate method of job evaluation 2. Prejudice and human judgement are minimised. The method can not be manipulated. 3. Being the systematic method, workers of the organization favour this method. 4. The scales developed in this method can be used for long time. 5. Jobs can be easily placed in distinct categories

Demerits
Demerits - The points rating method also has some

disadvantages. The major demerits of the method are: 1. It is both time-consuming and expensive method. 2. It is difficult to understand for an average worker. 3. A lot of clerical work is involved in recording rating scales. 4. it is not suitable for managerial jobs wherein the work content is not measurable in quantitative terms.