job evaluation methods are used for the measurement of the worth of employment. All forms of job evaluation are designed to enable management to determine how much one job should be paid as compared to others. All systems of job evaluation methods can be classified into two categories: non-quantitative and quantitative. Simple ranking and grading are placed in the non-quantitative category, while point system and factor comparison methods come under the quantitative category. The most widely used method is the point system and the least is the ranking system. One company can apply two methods for two different types of jobs. However, all the four methods are useful, and the real effectiveness of any method would depend on how best they are applied.
This method is widely used in small organizations. Being a straightforward and inexpensive way, it also consumes less time and promises enough potential in its usefulness. Before actual ranking, brief job descriptions of all the positions are taken. Then the job’s relative worth, without any other consideration is found. At the beginning of the process, the highest and lowest jobs are determined which serve as benchmarks for the ranking of the remainder. The second method is the paired comparison technique in which each position is compared with all other jobs. Once the comparison is made, jobs are arranged according to their worth. In this technique, the main idea is to rank jobs in order of their value. The simplicity of this method is rather deceptive.
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The defects of the simple ranking method are:
1. Simplicity is one of the disadvantages as it tends to make measurement somewhat crude. Analysis of the whole job, i.e., all the factors affecting the job are not considered.
2. The absence of predetermined yardstick leads to personal bias. The product of this method is a list of jobs in order of their worth.
In the Job Grading method, we do not have the pre-decided scale of values, but in job classification, there is one yardstick consisting of job classes. A scale of values consisting of grades and grade description is prepared. Job grades are determined fora category of jobs. From this, the grade descriptions are prepared which should be broad enough to include several jobs. Such grade descriptions cover job description as well. Two approaches are used in preparing grade report which helps to create a single scale of values for measuring the worth of a job. For example, in an enterprise jobs, A and B are similar in nature and jobs X, Y and Z are of similar nature. Another approach is to give some known key jobs. When the yardstick is established, the next step is to go through the job description and the grade description and allocate jobs to one particular class. The jobs falling under the same grade get the same wage scale. No doubt, it is an improvisation, yet inherently this method suffers from the following defects:
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1. Since there is a broad generalization of jobs, there are chances of dissatisfaction among particular group jobholders.
2. Grading systems require multiple systems because grading of clerical jobs may be quite different from that of operative jobs. However, besides these defects, this method is otherwise straightforward and inexpensive. One benefit of this system is that the grading arrives at a series of classes.
Factor Comparison System
An improved method of the ranking system, the factor comparison system compares job elements rather than the whole job. It consists of the following steps:
i. Selection of job characteristics.
ii. Selection of critical jobs.
iii. Determination of correct rates of critical jobs.
iv. Ranking key positions under each job factor.
v. Allocation of correct rate to each key job.
vi. Evaluation of all other jobs. vii. Designing, adjusting and operating the wage structure.
Point Rating System
This system is widely used in job evaluation methods. It is a quantifying, analytical and detailed system chalked out to derive a balanced wage structure with least dispute among employees. This method consists of the following steps:
a) Selection of job factor: The ranking system and grading system measure job as a whole. The point rating system is the first approach, which breaks down tasks into several essential or salient characteristics. The number of components varies with the organization. A job factor is defined as a specific requirement levied upon the jobholder, which he must endure. To say, if a person occupies the position of a supervisor, he is expected to work, to supervise, to motivate employees. Thus, he has to put some physical effort, besides mental. His responsibility is much more than that of a worker. Job factors are enumerated as follows:
• Working conditions
b) Construction of yardstick: The construction of the model is done by deciding the total points assigned or to be utilized in a system. The most important decision to be taken is what proportion of the total point is to be allocated to skill, effort, responsibility and working conditions.
c) Evaluation of the job: Evaluation of job demands the construction of reliable yardsticks and detailed job specification, after which the process of evaluation becomes very simple. The process consists of reading the job specification carefully and comparing the information with the degrees on yardsticks and placing it accordingly. The addition of all the points gives the points of the worth of that job. The more detailed the job specifications, the higher are the chances of accurate rating. Thus, job specifications are the preventive tools to check in case of any differences of opinions among the members of the rating committee.
d) Wage survey: Once the job has been summed up, the next step is placing all the evaluated jobs according to the points regarding money. This is the point when rated jobs are translated into monetary values. To conduct wage survey, the existing rates are taken for comparison.
e) Designing the wage structure: While constructing the wage structure, similar jobs are grouped and treated as a job class. All the jobs, which come to that job class are paid the same wage. In the point system, suppose 120 points to 150 points make a job class. In such a case, all the jobs, which fetch total points between 120 and 150, would carry the same monetary compensation. The purpose of the grouping of employment is to facilitate wage administration.
The above factors lead to the adjustment in the wage structure. All wages should be paid within limits, which are given by the standard set through a fee structure. A cardinal principle of wage and salary administration is that pay rate circle rates should be placed at proper place using appropriate measurements. Adjustments in the whole rate structure should also be according to the percentage increment to maintain equitable relationships.