Job Evaluation:

A sound wage & salary structure is one of the prerequisites of good

employer employee relations. In order to develop such a structure it is
essential that pay is related with the nature and worth of the job. It is
also essential to maintain proper differentials between compensation for
various jobs.
Job evaluation is an orderly and systematic technique of
determining the relative worth of the various jobs within the organization
so as to develop an equitable wage & salary structure.
The British institute of management has defined job evaluation as
the process of analysis & assessment of jobs to ascertain reliably their
relative worth using the assessment as the basis for a balanced wage
structure.
Job evaluation needs to be differentiated from job analysis. S
analysis is the process of collecting information relating to a job in terms
of duties, working conditions, supervision etc. it provides the information
for evaluating a job; Job evaluation is something more than job analysis.
Job evaluation begins with the job analysis & ends up with the
classification of job according to their worth.
Merit rating is done basically for reward, award & other incentives
measures.
Purpose of Job Evaluation:
1.
To determine equitable wage differentials between different jobs in
the organization.
2.
To eliminate wage inequalities.
3.
To develop a consistent wage policy.
4.
To establish rational basis for incentives & bonus Schemes.
5.
To provide a framework for periodic reviews & revision of wage
rates.
6.
To provide a basis for wage negotiations with trade unions.
7.
To minimise wage discriminations on the basis of age, sex, caste,
region, religion etc.
8.
To enable management to control the payroll costs.
Methods of Job Evaluation:
Various methods of job evaluation may be grouped as under.
1.
Non-quantitative method.
a)
Ranking method:-

In this method, each job as a whole is compared with other jobs.

After comparison, all jobs are arranged from the highest to the
lowest in order of their importance as judged by duties,
responsibilities, and demands on the job holder 3 techniques can
be used for ranking jobs. These techniques are as follows.
i] Job description. In this technique, a written jobs
description is prepared for every job. The job descriptions are then
studied & analysed. The differences between them in terms of
duties, responsibilities, skill requirement etc are noted down. Each
job is assigned a rank depending upon its relative significance.
Several raters may independently rank each job. The average of
these ratings is calculated to determine the final rankings. The
following illustrates the procedures
Job
Rater x
R.Y
RZ
Average
A
B
C
D
In this method, the rater is required to keep in mind all the jobs
being ranked.
ii)
Paired comparison: In this technique, each Job is
paired with every other job in the series. The more difficult job in
each pair is identified. Rank is then assigned on the basis of the
no. of times a job is rated more difficult eg. The pairs & ratings in
an organization may be as follows.
Pair
More difficult job
Rank
Assistant-Upper division clerk Assistant
1
Upper division clerk-Lower division Clerk
U.D
clerk
2
Lower division Clerk-Peon
LD
clerk
3
Assistant-Lower division clerk Assistant
Assistant-Peon
Assistant
Upper division Clerk-Peon
UD Clerk
Peon
4
b) Job Classification or Grading Method:

In this method, the procedure is as follows:

i)
Job classes or grades are established. A job grade is a group of
different job of similar difficulty or requiring similar knowledge
& skills to perform
ii)
Each job grade is defined in the form of a written description.
iii)
Each job is classified into an appropriate grade depending on
how well its characteristics match the grade definitions. For this
job descriptions are carefully analysed. In this way, a series of
job grades is developed & a different wage rate is fixed for each
job grade.
Grade
Description
Unskilled:
jobs in this grade involve manual
work little mental ability is required
No. formal education is essential
Skilled:
Jobs in this grade are clerical in
nature. Little physical effort is
involved as desk work is performed.
High school certificate is essential.
Supervisory:
Require ability to apply established
procedure & to guide others.
Graduate degree is essential.
Executives:
Involves
decision
making
&
administrative work. Professional
qualification is necessary
Policy:
involves policy making & control.
Considerable work experience at
policy maker level is required.
2. Quantitative Methods:
a) Factor Comparison Method
Under this method, a few key jobs are selected & compared in
terms of common factors. In this methods 1st of all the factors common
to all jobs are selected & defined clearly. Skill, physical & mental effort,
responsibility & working condition are the main factors used job
description r carefully analysed & the key jobs r rated in terms of the
selected factors. After that a fair & equitable wage rate is determined for
each key job in this similar way the wage rate for a job is allocated among
the identified & ranked factor. The remaining jobs are compared with the
key jobs in terms of each factor & wage rate is fixed similarly.

In this method key jobs serve as standards against which other

jobs can be compared a key job is one having standardized content &
accepted pay role.
Sector/ job
Wag Skill
Physical Mental
Mental
working
e rate
effort
requirement requirement conditions
Toolmakers
Welder
Machinist
Painter
Laborer
b. Point Method: It is the most widely used method of job evaluation. Under
it, jobs are divided into component factors. Points or weights r assigned to
each factors depending on the degree of its importance in a particular job.
the total points for a job indicate its relative worth or value.
In this method 1st of all representative jobs are to be selected and
analysed to find out the common factors. The selected factor may be divided
into sub-factor as.
Skill- education, experience, training, judgement
Efforts- mental & physical
Responsibility- quality of output, safety of owns & others.
After defining factor & sub-factor, the points are allocated as per their
importance to the particular job. Once the worth of the job in terms of total
points is known these are connected to money value keeping in view the
prevailing wage rates. A standard unit of money may be assigned to each
point so as to convert point scores into monetary values.
Eg.
Point range
Daily wage rate
101.200
Rs 50-65
201.300
55-75
301.400
75-100
401.600
100-150
601.1000
200-250