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Job Evaluation Methods Chap.13


Job Evaluation Methods

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.

Job Ranking

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.

Jobs According to the Ranking Method
Rank Monthly salaries
1. Accounting Manager $ 3,000
2. General Accounting Manager $ 1,800
3. Cost Accounting Manager $ 1,700
4. EDP Manager $ 1,400
5. Purchasing Supervisor $ 900
6. Cashier, Collection & Billing Supervisor $ 600

Job Grading

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         Class I -Executives: Further classification under this category may be Office manager, Deputy office manager, Office superintendent, Departmental supervisor, etc.
b        Class II -Skilled workers: Under this category may come the Purchasing assistant, Cashier, Receipts clerk, etc.
c         Class III -Semiskilled workers: Under this category may come Stenotypists, Machine-operators, Switchboard operators, etc.
d        Class IV -Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.
e         Class V -Semiskilled workers: This category may come Machine operator II, tool and die specialist, etc.

Factor Comparison Method

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:

Step 1. Determine the critical factors

Step 2. Determine key jobs.

Step 3. Apportion current wages for key job

Step 4. Plays key job

Compensable Or Critical Factors Senior Accountant

Responsibility               $ 3.20
Skill                                          $ 4.00
Mental Effort                            $ 3.00
Physical Effort              $ 2.00
Working Condition                   $ 0.70
Total                                        $ 12.9
Wage Rate                               $ 12.9

Table: Merits and Demerits of Factor Comparison Method

MeritsDemerits

Analytical and objective. Reliable and valid as each job is compared with all other jobs in terms of key factors. Money values are assigned in a fair way based on an agreed rank order fixed by the job evaluation committee. Flexible as there is no upper limitation on the rating of a factor. Difficult to understand, explain and operate. Its use of the same criteria to assess all jobs is questionable as jobs differ across and within organizations. Time consuming and costly.
Point System

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:

  1. 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;
  2. 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;
  3. 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.

Degree Define

1. Able to carry out simple calculations; High School educated
2. Does all the clerical operations; computer literate; graduate
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.

Table: Point Values to Factors along a Scale
Point values for Degrees Total

Factor 12345

Skill                                          10        20        30        40       50        150

Physical effort               8          16        24        32        40        120

Mental effort                             5          10       15        20        25        75

Responsibility               7          14        21       28        35        105

Working conditions                   6          12        18        24        30        90

Maximum total points of all factors depending on their importance to job = 540

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