JOB EVALUATION

CONCEPT, SCOPE,
METHODS & TECHNIQUES
PRESENTED BY :
ADITI MITRA
GUEST FACULTY IN HR
IMIT - CUTTACK
 SYSTEM FOR FIXING SALARY
 Salary is structured, fixed, adjusted on the basis of several
systems.
 The important among them are:
1. Wage Theories;
2. Job Evaluation;
3. Wage/Salary Survey;
4. Various Factors Affecting Wage and Salary Levels.
5. Wage Fixation Institutions in India
 JOB EVALUATION – INTRODUCTION
 The essence of compensation administration is job evaluation. By job
evaluation, we mean using the information in job analysis to
systematically determine the value of each job with all jobs within the
organization.
 Organizations consist of many jobs, and all jobs are important, but all
are not equally important. The relative importance of jobs is not the
same.
 Few jobs are more important than others in terms of relative worth. The
objective of job evaluation is to price the of rather than the man.
 Job evaluation is concerned with assessing the value of one job to
another to build a sound wage or salary structure.
 JOB EVALUATION
 Job evaluation is a systematic way of determining the value/worth of a job with other jobs in an organization.
 Job evaluation is a method for comparing jobs to provide a basis for grading and pay structure.
 Job evaluation has been defined as analyzing and assessing jobs to ascertain their relative worth reliably.
 It is the analysis and assessment of jobs to ascertain their relative worth reliably using the assessment as a basis for a balanced
wage structure.
 Without job evaluations, the HR department could not develop a rational approach to pay. All job evaluation systems depend
heavily on job analysis.
 Since job evaluation is subjective, specially trained personnel or job analysts should conduct it.
 When a group of managers is used for this purpose, the group is called a job evaluation committee—the committee reviews job
analysis information to learn about the duties, responsibilities, and working conditions.
 With this knowledge, jobs are put in a hierarchy according to their relative worth using a job evaluation method. The methods of
job evaluation are discussed next.
 In job evaluation, every job in an organization is examined and ultimately priced according to a few features: the relative
importance of the job, knowledge, skills, and abilities needed to perform the job, and difficulty of the job.
 Job evaluation needs to be differentiated from job analysis.
 Every job evaluation method requires basic job analysis to provide factual information about the jobs concerned.
 Thus, job evaluation begins with job analysis and ends where a job’s worth is ascertained for achieving pay equity between jobs.
 JOB EVALUATION – DEFINATION
 International Labor Organization (ILO) has defined a job evaluation as: “Job evaluation is an attempt
to determine and compare demands which the normal performance of a particular job makes on
normal workers without taking into account the individual performance of the workers concerned”.
 According to Alford and Beatty, “Job Evaluation is the application of the Job Analysis technique to
the qualitative measurement of relative job worth, for the purpose of establishing consistent wage rate
differentials by objective means. It measures the differences between jobs on the job requirements,
and establishes the differential numerically (job rating), so that it can be converted to wage rate after
the wage level is determined”.
 Wendell French defines Job evaluation as “a process of determining the relative worth of the various
jobs within the organization so that differential wages may be paid to jobs of different worth”.
 Kimball and Kimball define job evaluation “as an effort to determine the relative value of every job in a
plant to determine what the fair basic wage for such a job should be.”
 According to Bureau of Labor Statistics, “Job Evaluation is the evaluation or rating of job to
determine their position in job hierarchy. The evaluation may be achievement through assignment of
points or the use of some other systematic rating method for essential job requirements such as skill,
experience and responsibility”.
 CONDUCTING JOB ELAVUATION: GUIDELINES

 Rate the job-not the person or employee on the job.

 Strive to collect all the facts accurately.
 Look especially for distinguishing features of jobs and
relationship to other jobs.
 Job evaluation must be conducted systematically, based on
factual and accurate information.
 The result must be fair, rational and unbiased to the
individuals being affected.
 JOB EVALUATION SCHEMES
 There are two basic types of job evaluation schemes: analytical and non-analytical.

 Analytical Schemes

An analytical job evaluation scheme can defend against a claim of equal pay for work of equal value. Jobs
are broken down into components or demands, known as factors, and scores are awarded for each factor.
The final total gives the overall rank order of jobs.
 Non-analytical Schemes

Under this scheme, whole jobs are compared with each other. There is no attempt to break the jobs down
and analyze them under their various demands or components.
The rationale for non-analytical job evaluation is that it produces a hierarchy of jobs that approximate the
‘felt-fair’ ranking of these jobs in the minds of the people working in the organization.
Examples of non-analytical schemes include job ranking and paired comparisons. These represent different
ways of drawing up a list of jobs in rank order.
A non-analytical job evaluation scheme does not provide us with a defense against a claim of equal pay for
work of equal value.
 FEATURES OF JOB EVALUATION
Job evaluation aims to produce a ranking of jobs on which a rational and acceptable pay structure can be built.
The primary objective of job Evaluation is to find out the value of work, but this is a value which varies from time
to time and from place to place under the influence of certain economic pressure.
The main features of job evaluations are as follows:
 It attempts to assess jobs, not people.
 The standards of job evaluation are relative, not absolute.
 The basic information on which job evaluations are made is obtained from the job analysis.
 It provides bases for wage negotiation founded on facts.
 Job evaluation does not fix pay scales but merely provides a basis for evaluating a rational wage structure.
 Job Evaluation does not design wage structure, it helps in rationalizing the system by reducing number of
separate and different rates.
 Job evaluations are carried out by groups, not by individuals.
 Some degree of subjectivity is always present in job evaluation.
 Job Evaluation helps the management to maintain high levels of employee productivity and employee
satisfaction.
 OBJECTIVES OF JOB EVALUATION
 The primary objective is to determine the relative worth of different jobs
in the organization and provide the basis for the compensation
management system.
 The other objectives are:
o To determine the position and place of a job in the organizational
hierarchy.
o To clarify the responsibility and authority associated with the job.
o To manage internal and external consistency in the compensations.
o To maintain complete and accurate data regarding job description
and job satisfaction.
o To ensure employee satisfaction with respect to the compensation.
JOB EVALATION VS PERFORMANCE APPRAISAL

POINT JOB EVALUATION JOB APPAISAL

1. Meaning Finding the relative Finding the worth of a

worth of a job. job holder.

2. Aim Determine wage rates Determining incentives

of different jobs. and rewards for
superior performance.
3. Shows How much a job is How well an individual
worth is doing an assigned
work.
 JOB EVALUATION VS JOB ANALYSIS

JOB ANALYSIS : A systematic way of gathering

information about a job

JOB EVALUATION : Its begins with job analysis and

ends at the point of determination of worth of a job.
PROCESS OF JOB EVALUATION
 PROCESS OF JOB EVALUATION PROGRAM

The process of job evaluation involves the following steps:

1. Gaining acceptance

2. Creating job evaluation committee

3. Finding the jobs to be evaluated

4. Analyzing and preparing job description

5. Selecting the methods of evaluation

6. Classifying jobs
 PROCESS OF JOB EVALUATION PROGRAM
 Gaining Acceptance –
o Before undertaking job evaluation, top management must explain the aims and
uses of the program to the employees and unions.
o To elaborate on the program further, oral presentations could be made. Letters and
booklets could be used to classify all relevant aspects of the job evaluation program.
 Creating a Job Evaluation Committee –
o A single person can’t evaluate all the key jobs in an organization.
o Usually, a job evaluation committee consisting of experienced employees, union
representatives, and HR experts is created to set the ball rolling.
 Finding the Jobs to be Evaluated –
o Every job need not be evaluated. This may be too taxing and costly.
o Certain key jobs in each department may be identified. While picking up the jobs,
care must be taken to ensure that they represent the type of work performed in that
 PROCESS OF J/E PROGRAM
 Analyzing and Preparing a Job Description –
o This requires the preparation of a job description and also an analysis of job needs for
successful performance.
 Selecting the Method of Evaluation –
o The most important method of evaluating the jobs must be identified now, keeping the
job factors and organizational demands in mind.
 Classifying Jobs –
o The relative worth of various jobs in an organization may be found out after arranging
jobs in order of importance using criteria such as skill requirements, experience
needed under which conditions the job is performed, type of responsibilities to be
shouldered, degree of supervision needed, the amount of stress caused by the job, etc.
o Weights can be assigned to each such factor. A job’s worth is determined when we add
all the weights. The points may then be converted into monetary values.
 BENEFITS OF JOB EVALUATION
 It tries to link pay with the requirements of the job.
 It offers a systematic procedure for determining the relative worth of jobs. Jobs are
ranked on the basis of rational criteria viz., skill, education, experience, responsibilities, etc.
 An equitable wage structure is a natural outcome of job evaluation. An unbiased job
evaluation tends to eliminate salary inequities by placing jobs having similar requirements in
the same salary range.
 Employees as well as unions participate as members of job evaluation committees,
while determining rate grades for different jobs. This helps in solving wage related grievances
quickly. Employees & unions are also an active parts of J/E process.
 Job evaluation, when conducted properly and with care, helps in the evaluation of new
jobs.
 It points out possibilities of more appropriate use of the plant’s labour force by
indicating jobs that need more or less skilled workers than those who are manning these jobs
currently.
 METHODS & TECHNIQUES OF JOB EVALUATION
 Job evaluation is the process of determining the relative worth of different
categories of jobs by analyzing their responsibilities and, consequently,
fixation of their remuneration.
 The basic objective of job evaluation is to determine the relative
contributions that the performance of different jobs makes towards the
realization of organizational objectives.
 There are four basic methods of job evaluation: ranking method, job
grading method, point method and factor comparison method.
 Out of these, first two methods are non-quantitative and also known as
traditional, non-analytical or summary methods. The last two methods
of job evaluation are quantitative, also known as analytical methods,
and use various quantitative techniques in evaluating a job.
 METHODS & TECHNIQUES OF J/E
The basic difference between qualitative and
quantitative methods of job evaluation is in terms of;
1. Consideration of the job as a whole versus consideration
of different components of a job; and
2. Judging and comparing jobs with each other versus
assigning numerical scores on a rating scale.
Usually, in practice, a combination of different methods is
followed. Based on this concept, some other methods have
also been developed.
 RANKING METHOD
In the ranking method of job evaluation, a whole job is compared with
others and rank is provided on the basis of this comparison. The usual
process followed in this method is as under:
1. On the basis of job analysis, each member of the job evaluation
committee ranks each job independently either against the benchmark
job or against all other jobs. The ranking is provided to the job on the
basis of this comparison.
2. In order to increase the reliability of ranking, this exercise is
undertaken twice or thrice by the members.
3. If there are significant differences of opinions among the members
about the ranking of a particular job, the matter is settled by mutual
consultation, or by working out the average.
 RANKING METHOD (CONTD.)
Merits –
o The method is comparatively simple, easily understandable, and mostly acceptable by
labor unions. It is suitable for comparatively smaller organizations which may not like to
undertake more laborious exercises.
o The method is less costly to undertake and maintain as compared to other systems.

Demerits –
Since ranking method of job evaluation is qualitative and non-analytical. It suffers from the
following limitations:
o Ranking method is judgmental and, therefore, it is affected by personal preferences of job
evaluators.
o This method ranks various jobs in order of their relative worth. It does not specify the real
difference between two jobs. For example, the exact difference between job ranked at first and the
 JOB GRADING METHOD
Job grading method also known as job classification method establishes various
grades for different categories of jobs. For example, jobs of an operative may be
classified as unskilled, semi-skilled, skilled and highly-skilled. The process
followed in this method is as under:
1. At the initial stage. a number of job classes or grades is decided on the basis
of job analysis. Job grades can be determined on either of two bases. First,
all jobs may first be ranked and their natural classes may be determined.
The description of each job class is prepared covering all jobs falling in a
class. Second, the job evaluation committee may prepare a series of job class
description in advance on the basis of which various jobs may be graded.
2. Different characteristics of each job are matched with description of job class
and a job is placed in the class with which it matches best.
 JOB GRADING METHOD (CONTD.)
Merits –
Grading system of job evaluation particularly in government jobs is quite popular as this
has certain merits over the ranking method. These are as follows:
o It is quite simple to operate and understand as the relevant information is provided by job
analysis which serves other purposes too.
o Job evaluation done on grading method makes wage and salary determination easier as
these are fixed in terms of various grades of jobs.
Demerits –
o Job grade description is vague and personal biases may distort job grading as the method
is not based on any scientific analysis.
o There are chances of employees’ resistance when new clusters of jobs are prepared. This
is evident by the fad that government employees agitate when recommendations of a new
 POINT RANKING METHOD
 Point method of job evaluation is widely used in business organisations. It is an
analytical and quantitative method which determines the relative worth of a job on the
basis of points alloted to each specific factor of a job. The sum total to these points
allotted to various job factors is the worth of the job. This total is compared with that of
other jobs and relative worth of various jobs is determined.
 Under this method of job evaluation, jobs are broke down based on various identifiable
factors such as skill, effort, training, knowledge, hazards, responsibilities and so on.
Thereafter, points are allocated to each of these factors. Weights are given to factors
depending on their importance to perform the job. Points so allocated to various factors
of a job are then summed. Then, the jobs with similar total of points are placed in similar
pay grades. The sum of points gives an index of the relative significance of the jobs that
are rated.
 Point Rating System requires six steps and is usually implemented by a job evaluation
committee or by an individual analyst.
1. Determine critical factors; 2. Determine the levels of factors; 3. Allocate points to sub-factors;
 POINT RANKING METHOD (CONTD.)
Merits –
o It is the most comprehensive and accurate method of job evaluation.

o Prejudice and human judgement are minimized. The method can not be manipulated.

o Being the systematic method, workers of the organization favor this method.

o The scales developed in this method can be used for long time.

o Jobs can be easily placed in distinct categories.

Demerits –
o It is both time-consuming and expensive method.

o It is difficult to understand for an average worker.

o A lot of clerical work is involved in recording rating scales.

o It is not suitable for managerial jobs wherein the work content is not measurable in quantitative terms.
 FACTOR COMPARISON METHOD
This method, also known as key job method, was originally developed at the Philadelphia Rapid Transit Company,
USA by Eugene J. Benge in 1926 to overcome two major problems faced in point method of job evaluation. viz.
determining the relative importance of factors and describing their degrees. In this method, each factor of a job is
compared with the same factor of the other jobs or the key job either defined or existing one. When all factors are
compared, the final rating is arrived at by adding the value received at each comparison. For this purpose, Benge
identified five factors – mental effort, skill, physical effort, responsibility and working conditions. The procedure
for factor comparison method of job evaluation is as follows:
1. At the initial stage, some key jobs which are well recognized are selected. These jobs should be from a cross-section
of departments. These should represent all levels of wages and salaries which are considered fair, both internally
as well as externally.
2. Various factors of the jobs which are to be considered for comparison, should be identified. These factors may be
mental requirement. Skills, physical requirement, responsibility and working conditions.
3. Each factor of a job is compared with the same factor of the key job and rank is awarded. This exercise is repeated
for all other factors.
4. The relative worth of a job is determined by adding the ranks obtained by different factors of a job. Sometimes, the
rank is expressed in terms of monetary values and these values are added together to get the correct wage rate for
 FACTORS COMPARISION METHOD (CONTD.)
Merits –
The factor comparison method is more systematic and analytical as compared to any other method, they are:
o It provides more accurate information about the relative worth of a job as different comparable factors are compared
with key jobs.
o Since only limited number of factors relevant for the effective job performance are compared, there are reduced
chances of overlapping.
o Since the evaluation is more systematic and analytical, its logic can be accepted by trade unions and workers.
Demerits –
Factor rating method has its own operational problems which restrict its adaptability. The major problems are:
o This method is quite costly and time consuming to install and difficult to understand by those not fully conversant
with job evaluation process.
o If wage rates are adopted for making comparison, the system may become obsolete very soon as there may not be
proportionate increase in wages for all jobs.
o This system considers only limited factors of job for comparison. This may be a positive point so far as avoidance of
duplication and simplicity of procedure are concerned, but may ignore other factors which may be important for the
performance of the job.
THANK YOU