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Job Evaluation Is A Technique To Rank Jobs in An Organization On The Basis of The Duties and Responsibilities Assigned To The Job
Job Evaluation Is A Technique To Rank Jobs in An Organization On The Basis of The Duties and Responsibilities Assigned To The Job
and responsibilities assigned to the job. The job evaluation process results in a job
being assigned to a pay grade. The pay grade is associated with a pay range that is
defined by a minimum and a maximum pay rate.
Job evaluation plans have been in use for approximately 75 years in the public and
private sectors. There are many variations to the design a job evaluation plan.
However, they all basically follow the same approach, which is to value each job in a
defined group of jobs based on a common set of generic factors.
The first set of decisions that an organization is required to make when installing a
job evaluation plan is to determine which jobs in the organization will be covered by
the plan and what factors will be used in the job evaluation process.
The second step in the job evaluation process is to collect information about each job
to be evaluated. This can be done using a job analysis questionnaire, job
descriptions, observation and interviews with employees and supervisors.
Step three in the process is to systematically rate each job based on the job
evaluation factors selected. The points assigned for each of the factors are totaled for
each job. Table 2 illustrates how the factors are subdivided by degrees. The degrees
define the extent that the factor is found in the job. Table 3 illustrates the evaluation
of a job. Table 4 Market Pay Line of Benchmark Jobs0102030400100200300400Job Evaluation PointsRate
Per Hour
The forth step is to select the benchmark jobs from the jobs that have been
evaluated. The benchmark jobs are those jobs commonly found in most organizations
and are typically included in salary surveys. The benchmark jobs connect the internal
pay structure with the external labor market.
A technique to visualize the relationship between the internal structure and the
market (Exhibit 4) is to plot each of the benchmark jobs using the benchmark's total
job evaluation points as the X axis and the average market rate as the Y axis. A line
of best fit can be developed from the plot. This line can be used as a guide to
determine the number of grades, the midpoints for each pay grade, and which jobs
should be grouped in the same grade.
Related Topics
Jenss & Associates
By Susan M. Heathfield
Your employees want fair pay. Your employees want regular raises. You want to attract and retain talented
employees in your organization. Your employees need clarity about their roles and responsibilities as well as
about what's expected from them. Job evaluation, performed effectively and used to clarify and revise job
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 equitable,
understandable, legally defensible, approachable, and externally competitive. You can use job evaluations
to:
Clarify job descriptions so that employees understand the expectations of their roles and the
complexity, and value of each job in your organization. With a successful job evaluation system, you can
It is best to perform job evaluation after work analysis. Job evaluation, in conjunction with work analysis,
helps you develop a job description that is broad, descriptive, and flexible so that you can adapt the
Job evaluation helps you establish and qualify differences in employee contribution across jobs. These
differences provide a foundation for employee compensation decisions. The job evaluation process
measures the elements of a job and produces an overall score. In each case, you evaluate the job, not the
Typically, job evaluation assesses both the content of a job and the value of a job for your organization.
Job content refers to the type of work performed and the skills and knowledge necessary to
Job value refers to the job's degree of contribution in meeting your organization's goals and the
Complexity of tasks
Decision-making authority
Cross-training requirements
Working conditions
Employees might worry about losing their jobs, and pay might be decreased after job comparisons and
evaluations are completed. To help employees accept and understand your job evaluation system, approach
Create a team
To promote widespread support, understandings, and acceptance across your organization, create a cross-
functional team to work on job evaluation. The team should represent various levels and jobs within your
organization.
The team can work together to evaluate and select a job evaluation method. Train team members in the
requirements of the Fair Labor Standards Act and any other best practices for selecting a job evaluation
During the implementation of job evaluation, regularly communicate with employees throughout the process.
This helps employees feel a sense of ownership from the results of the job evaluation results.
7. Use the selected job evaluation method to rank jobs hierarchically or in groups.
8. Link the ranked jobs with your compensation system or develop a new system.
10. Periodically review your job evaluation system and the resulting compensation decisions.
Hundreds of job evaluation systems exist. Research the job evaluation methods and resources available
Ranking
Classification
Point evaluation
Factor comparison
Market comparison
Ranking
Ranking jobs is the easiest, fastest, and least expensive approach to job evaluation. It is also most effective
in smaller organizations with few job classifications. To rank positions, order jobs from highest to lowest
The process of job ranking typically assigns more value to jobs that require managerial or technical
competencies. More value is also assigned to jobs that supervise, exercise decision-making authority, or
rely on independent judgment. For example, a job-ranking system might rank the job of CEO as the most
valued job within the organization and the job of product assembler as the least valued.
Advantages Simplicity is the main advantage in using a ranking system. It is also easy to
are often assessed on the basis of opinion. Also, when creating a new job, existing jobs must be
Classification
The general purpose of job classification is to create and maintain pay grades for comparable work across
your organization.
To conduct a job classification: First, write descriptions for a category of jobs; next, 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 decision-making exercised, and the job's contribution to
Universities, government employers and agencies, and other large organizations with limited resources
typically use job classification systems. These types of organizations have many types of jobs at diverse
locations and must maintain equitable and fair standards across all work settings.
Advantage Job classification is simple once you establish your categories. You can assign
new jobs and jobs with changing responsibilities within the existing system.
Decisions 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
Point evaluation is the most widely used job evaluation method. In a point evaluation system, you express
the value of a particular job in monetary terms. You first identify compensable factors that a group of jobs
possess. Based on these factors, you assign points that numerically represent the description and range of
the job.
Examples of compensable factors are skills required, level of decision-making authority, number of reporting
evaluator assigns each job's total points before the compensable factors become part of the equation.
Disadvantages Subjective decisions about compensable factors and the associated points
assigned might be dominate. The 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. The evaluators then analyze jobs in the external 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.
Market comparison
Job evaluators compare compensation for your organization's jobs to the market rate for similar jobs. This
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
More information
Conduct an effective pay study
helps organizations strategically value and utilize people. Her company promotes business success and
strategies, human resources system and policy development, team building, customized training, and
writing.
http://office.microsoft.com/en-us/help/HA011895351033.aspx
Ranking Methods
1. Ordering Simply place job titles on 3x5 inch index cards then order the titles by
relative importance to the organization.
2. Weighting
3. Paired Comparison
Grouping
After ranking, the jobs should be grouped to determine the appropriate slary levels.
Software
http://www.hr-guide.com/data/G411.htm
Job Evaluation
The two most common methods of job evaluation that have been used
are first, whole job ranking, where jobs are taken as a whole and
ranked against each other. The second method is one of awarding
points for various aspects of the job. In the points system various
aspects or parts of the job such as education and experience required
to perform the job are assessed and a points value awarded - the
higher the educational requirements of the job the higher the points
scored. The most well known points scheme was introduced by Hay
management consultants in 1951. This scheme evaluates job
responsibilities in the light of three major factors - know how, problem
solving and accountability.
• Clearly defined and identifiable jobs must exist. These jobs will
be accurately described in an agreed job description.
Does this mean that we will see existing schemes abandoned or left to
fall into disrepute ? Will providers of job evaluation schemes examine
and, where necessary, modify them to ensure they are up to date and
relevant ? Simply sticking rigidly to what is already in place may not
be enough to ensure their survival.
Explanation:
Illustration:
References:
• Job Analysis
Further reading:
• Roger Edgell
There are three basic methods of job evaluation: (1) ranking, (2) classification, (3) factor
comparison. While many variations of these methods exist in practice, the three basic
approaches are described here.
Ranking Method
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.
The variation in payment of salaries depends on the variation of the nature of the job
performed by the employees. The ranking method is simple to understand and practice
and it is best suited for a small organization. Its simplicity, however, works to its
disadvantage in big organizations because rankings are difficult to develop in a large,
complex organization. Moreover, this kind of ranking is highly subjective in nature and
may offend many employees. Therefore, 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. This method places groups of
jobs into job classes or job grades. Separate classes may include office, clerical,
managerial, personnel, etc. Following is a brief description of such a classification in an
office.
(a) (a) Class I - Executives: Further classification under this category may be
Office manager, Deputy office manager, Office superintendent, Departmental
supervisor, etc.
(b) (b) Class II - Skilled workers: Under this category may come the
Purchasing assistant, Cashier, Receipts clerk, etc.
(c) (c) Class III - Semiskilled workers: Under this category may come
Stenotypists, Machine-operators, Switchboard operators, etc.
(d) (d) Class IV - Semiskilled workers: This category comprises Daftaris, File
clerks, Office boys, etc.
The job classification method is less subjective when compared to the earlier ranking
method. The system is very easy to understand and acceptable to almost all employees
without hesitation. One strong point in favor of the method is that it takes into account all
the factors that a job comprises. This system can be effectively used for a variety of jobs.
A more systematic and scientific method of job evaluation is the factor comparison
method. Though it is the most complex method of all, it is consistent and appreciable.
Under this method, instead of ranking complete jobs, each job is ranked according to a
series of factors. These factors include mental effort, physical effort, skill needed,
supervisory responsibility, working conditions and other relevant factors (for instance,
know-how, problem solving abilities, accountability, etc.). Pay will be assigned in this
method by comparing the weights of the factors required for each job, i.e., the present
wages paid for key jobs may be divided among the factors weighed by importance (the
most important factor, for instance, mental effort, receives the highest weight). In other
words, wages are assigned to the job in comparison to its ranking on each job factor.
The steps involved in factor comparison method may be briefly stated thus:
Select key jobs (say 15 to 20), representing wage/salary levels across the
organization. The selected jobs must represent as many departments as possible.
Find the factors in terms of which the jobs are evaluated (such as skill, mental
effort, responsibility, physical effort, working conditions, etc.).
Rank the selected jobs under each factor (by each and every member of the job
evaluation committee) independently.
Assign money value to each factor and determine the wage rates for each key job.
The 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.
Demerits
Merits
Point method
This method is widely used currently. Here, jobs are expressed in terms of key factors.
Points are assigned to each factor after prioritizing each factor in the order of importance.
The points are summed up to determine the wage rate for the job. Jobs with similar point
totals are placed in similar pay grades. The procedure involved may be explained thus:
(a) Select key jobs. Identify the factors common to all the identified jobs such as
skill, effort, responsibility, etc.
(b) Divide each major factor into a number of sub factors. Each sub factor is defined
and expressed clearly in the order of importance, preferably along a scale.
The most frequent factors employed in point systems are:
I. I. 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;
II. II. 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;
III. III. 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.
DegreeDefine
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.
The point method is a superior and widely used method of evaluating jobs. It forces raters
to look into all keys factors and sub-factors of a job. Point 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. “The methodology
underlying the approach contributes to a minimum of rating error” (Robbins, p.361). 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.
On the negative side, the point method is complex. Preparing a manual for various jobs,
fixing values for key and sub-factors, establishing wage rates for different grades, etc., is
a time consuming process. According to Decenzo and Robbins, “the 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 degrees”. This may be too taxing, especially while evaluating
managerial jobs where the nature of work (varied, complex, novel) is such that it cannot
be expressed in quantifiable numbers.
http://www.openlearningworld.com/olw/courses/books/Job%20Analysis%20and
%20Evaluation/Job%20Analysis%20and%20Evaluation/Job%20Evaluation
%20Methods.html
The standards do not attempt to describe every work assignment of each position in the
occupation covered. The standards identify and describe those key characteristics of
occupations which are significant for distinguishing different levels of work. They define
these key characteristics in such a way as to provide a basis for assigning the appropriate
grade level to all positions in the occupation to which the standards apply.
Advantages Disadvantages
Tips
Use Well Defined Grades/Categories Attempt to define the grades/categories so that they
do not overlap one another. Overlaps in the descriptions and factors used to identify the
grade would lead to problems when assigning jobs to the grades where there is overlap
between them.
Biases Examine the Grades/Categories for inherent biases against females and minorities.
Government Classification
1. Position Classification
Re-evaluation of a position
To initiate the re-evaluation of a position, please provide the following information:
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
Each factor is then divided into levels or degrees which are then assigned points. Each
job is rated using the job evaluation instrument. The points for each factor are summed to
form a total point score for the job.
Jobs are then grouped by total point score and assigned to wage/salary grades so that
similarly rated jobs would be placed in the same wage/salary grade.
Advantages Disadvantages
• The value of the job is expressed in • The pay for each factor is based on
monetary terms. judgments that are subjective.
• Can be applied to a wide range of
jobs. • The standard used for determining the
pay for each factor may have built-in
• Can be applied to newly created jobs. biases that would affect certain
groups of employees (females or
minorities).
http://www.hr-guide.com/data/G414.htm
Contributor
By Heidi Cardenas, eHow Contributing Writer
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Job evaluation determines the worth of the jobs in a company relative to one
another. Evaluation analyzes the value of jobs and is the source of targeted job
descriptions. Job evaluation assesses the differences in contributions between
jobs, job content and value and provides the basis for compensation decisions.
Four common techniques---ranking, classification, point method and factor
comparison--- are often used by many job evaluation systems.