Chapter

Chapter 13
13

Job
Job Evaluation
Evaluation

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by Zane Quible Pearson Prentice Hall
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 Job Evaluation

Is used by organizations to provide information

about the relative worth of jobs.
In, turn, this helps determine the monetary
worth of jobs.
Job evaluation uses information collected
through job analysis.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
2 Upper Saddle River, NJ 07458
 Benefits
Benefits of
of Job
Job Evaluation
Evaluation
(1
(1 of
of 2)
2)
It provides an objective determination of the
value of each job.
Employees are more likely to accept the
relative values of their jobs when job worth is
determined by job evaluation.
It provides employees greater appreciation and
understanding of the relationships between the
demands of their jobs and their compensation.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
3 Upper Saddle River, NJ 07458
 Benefits
Benefits of
of Job
Job Evaluation
Evaluation
(2
(2 of
of 2)
2)
It reduces the number of complaints about wage
inequities.
It helps identify the lines of authority and patterns
of advancement.
It helps identify areas appropriate for new
employee orientation and training as well as to
facilitate employee transfer.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
4 Upper Saddle River, NJ 07458
 Job Evaluation Methods

Nonquantitative
Nonquantitative Quantitative
Quantitative

Involves evaluating Involves evaluating

jobs as whole jobs jobs on the basis of
rather than on the their parts.
basis of their parts.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Compensable Are often used in the
Factors evaluation process.

These are factors that jobs

share in common.

Examples
Examples

Working Conditions
Physical Effort
Skill Requirements
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
6 Upper Saddle River, NJ 07458
 Ranking Technique

Is the simplest and oldest of the job evaluation

methods.
Uses the job description and the job specification
for each job.
Involves determining relative importance of each
job and then assigning each job to a specific
job level.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
7 Upper Saddle River, NJ 07458
 Steps in Using the
Ranking Technique

1. Determine the number of different levels to be

used in the job evaluation process.
2. By means of a ranking device, rank the various
jobs from the most important to the least
important.
3. Assign each job to one of the predetermined
levels.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
8 Upper Saddle River, NJ 07458
 Situations in which the Ranking
Technique is Used

1. When the number of jobs to be evaluated is

fairly small.
25-30 jobs are maximum.

2. When the process needs to be completed fairly

quickly and economically.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
9 Upper Saddle River, NJ 07458
 Advantages of the Ranking
Technique

1. It is readily understood by employees.

2. It is fairly quick and simple to use.
3. It is inexpensive to install.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
10 Upper Saddle River, NJ 07458
 Disadvantages of the Ranking
Technique

1. It does not provide a highly refined index of

job worth because comparisons are made on
the basis of whole jobs rather than on the basis
of its parts.
2. Importance of job may be influenced by job
holder.
3. It may be influenced by going wage and salary
rates rather than by actual importance.
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by Zane Quible Pearson Prentice Hall
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 Job Grading

Is also known as job classification.

Is used in the federal civil service system.
Involves evaluating jobs on the basis of a number
of predetermined classes or grades.
Uses standard job descriptions.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
12 Upper Saddle River, NJ 07458
 Steps in Using the
Job Grading Technique

1. Predetermined classes of jobs are designated.

2. Standard job description is prepared for each
of the predetermined classes.
3. Jobs are placed into the various predetermined
classes.
4. Each job is compared with the various levels
outlined on the standard job description to
determine the level into which the job should
be placed.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
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 Situations in which the Job
Grading Technique is Used

1. When the organization has too many jobs for

the ranking method to be used.
2. When the organization consists of several
different family groupings of jobs.
3. When time and cost are of some consideration.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Advantages of the Job
Grading Technique

1. It is rather inexpensive to use.

2. It is an easy method to explain to employees.
3. Employees tend to accept the results quite
readily.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Disadvantages of the Job
Grading Technique

1. Possibility exists for overlap between two levels

in the standard job description.
2. Importance of a particular job may be somewhat
biased by current rates of pay for certain job
holders.
3. Requires the use of standard job descriptions to
facilitate the process.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
16 Upper Saddle River, NJ 07458
 Factor Comparison

Determines the relative worth of jobs on the basis

of their parts (compensable factors) rather than
on the basis of whole jobs.

Compensable
Compensable Factors
Factors
1. Skill Requirements
2. Mental Requirements
3. Physical Requirements
4. Responsibility Requirements
5. Environmental Requirements
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 Steps in Using the Factor
Comparison Technique

1. Key jobs are identified.

2. Key jobs are ranked compensable factor by
compensable factor.
3. Salary is apportioned among each compensable
factor, and key jobs are ranked accordingly.
4. Factor ranking of each job is compared with
its monetary ranking.
5. Monetary comparison scale is developed.
6. Non-key jobs are evaluated using the monetary
comparison scale as a basis.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
18 Upper Saddle River, NJ 07458
 Situations in which the Factor
Comparison Technique is Used

1. Job factors vary too much to use one of the

whole-job evaluation methods.
2. Is appropriately used in organizations with
a large variety of jobs to be evaluated.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
19 Upper Saddle River, NJ 07458
 Advantages of the Factor
Comparison Technique

1. Provides more accurate results than either the

ranking or job grading techniques.
2. Factors to be evaluated can be tailored to meet
the needs of the organization.
3. Actual worth of each compensable factor is
easily determined.
4. Evaluation of non-key jobs is simplified greatly
by using the monetary comparison scale.
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 Disadvantages of the Factor
Comparison Technique

1. Periodic adjustment of salary rates may result

in the development of inequities in the
organization’s salary structure.
2. Inequities in salary rates of key jobs will affect
the evaluated worth of non-key jobs.
3. An incorrect interpretation of the importance of
any one of the factors can cause a serious error
in the evaluated worth of a job.
4. Because of the complicated nature of the method,
employees may not understand the system.
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 Point Evaluation Technique

Is the most commonly used technique.

Jobs are evaluated on the basis of compensable
factors.
Compensable factors are divided into degrees.
Degrees are assigned a specific number of points.
Requires the use of a point manual, which lists the
number of points allocated to each of the degrees.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
22 Upper Saddle River, NJ 07458
 Steps in Using the Point
Evaluation Technique

1. Compensable factors and their relative worth are

determined.
2. Factors are then divided into subfactors.
3. Point manual is developed, specifying the number
of points assigned to each degree.
4. Job specification is compared subfactor by
subfactor with the degree descriptions in the point
manual.
5. Job worth is determined by adding the number of
points for each subfactor.
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by Zane Quible Pearson Prentice Hall
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 Advantages of the Point
Evaluation Technique

1. Is a difficult technique to manipulate.

2. Provides a high degree of objectivity and
consistency of results.
3. Salary increases do not affect evaluated worth of
jobs as they do with other techniques.
4. Provides a significant amount of flexibility in
selecting subfactors, degrees, and points.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
24 Upper Saddle River, NJ 07458
 Disadvantages of the Point
Evaluation Technique

1. Developing a manual can be a difficult, time-

consuming process.
2. Hiring specially trained personnel to install the
system may be necessary.
3. Selecting and writing definitions is not an easy
process.
4. Allocating points among each of the subfactors
may be somewhat arbitrary.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
25 Upper Saddle River, NJ 07458
 Computer-Aided Job Evaluation

Employees being evaluated complete a

computerized questionnaire regarding their job
duties.
The technique facilitates the preparation of a
variety of statistical reports.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
26 Upper Saddle River, NJ 07458
 Job Often uses the services of
Evaluation a committee.

Benefits
Benefits
1. Results of the program are likely to be more
objective.
2. Employees are more likely to accept the program
developed by broad-based representation.
3. Results tend to be more accurate.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
27 Upper Saddle River, NJ 07458