Four Frequently used methods of job evaluation are:
1) Job Ranking method ,
2) Job Classification method
3) Point System method , and
4) Factor Comparison method.
1. Ranking method: Jobs in an organization are ranked highest to lowest subjectively by a committee of raters in terms of total job or task complexity and working conditions. It is a non-quantitative judgmental system. No attempt is made to determine the critical factors in each job. Instead, an overall judgement is made of the relative worth of each job and the job is ranked accordingly. Decisions are made about the relative worth of only two jobs at a time.
This ranking or slotting is an intuitive judgement and thus, its accuracy depends on the knowledge and skill of the individual doing the slotting or ranking. The raking method has got merits and demerits like below-
a) Relatively easy and simple to do. It takes less time to accomplish task. Suitable for a less- job firm.
b) There is no agreed upon yardstick, thus leads to erroneous measures. Unmanageable when there are a large number of jobs. Because of these problems, ranking is probably the least frequently used method of job evaluation.
2. Classification Method
This method categorizes a job into groups. The groups are called classes if they contain similar jobs or grades if they contain jobs that are similar in difficulty but otherwise different. Each class or grade is defined and jobs are assigned to a grade classification according to their respective level of compensable factors.
Merits
1. Job classification method can handle more jobs than the ranking method
2. It provides specific standard for compensation and accommodates any
changes in the value of individual jobs.
3. It can be constructed quickly, simply and cheaply.
4. It is easy to understand and communicate to employees.
De-merits
1. Job classification method is subject to the limitations like ranking method.
2. It assumes a rigid relationship between job factors and value that force the jobs to fit into categories for which feeling of inequity can result.
3) Point Factor Method
The point factor method or point system of job evaluation quantifies the value of the elements of a job by allocating points to each factor and the sum of those values provides a quantitative assessment of a job’s relative worth or pay. The system requires a few steps to end-up with pay of a job. The steps are stated below:
Step 1: Determine cluster of jobs to be evaluated. The job evaluation starts with determining cluster of jobs to be evaluated for setting pay. Job All jobs will not be selected for evaluation, only a sample jobs with homogeneous characteristics will be chosen for this purpose.
Step 2: Collect job information. Job information regarding activities to be done in each job, responsibilities to be undertaken, working conditions of the job etc information are needed for job evaluation.
Step 3 : Determine critical factors with their definitions. At his stage, the job factors and its subfactors will be determined and the definition of each factor will be made clearly. These are critical factors for which compensation will be given to the employees. The factors may be skill, responsibility, effort, and working conditions.
Step 4: Determine factor degrees/levels. The depth of each factor varies over jobs. So, the point system creates several levels /degrees associated with each factor. Each degree/level will have definite description so that it could be identified distinctively. Suppose, education may have 4 (four) different levels-MBA.
Step 5: Determine relative value of factors. Each critical factor now should be given relative value in percentage denoting the weight of each factor. It will reflect the relative significance of factors to the overall job performance.
Step 6: Assign point value to factors and degrees/levels. Now, each critical factor will be assigned total point value. The job evaluation committee subjectively assigns the maximum possible points to each factor, its sub factors and degrees. Such as skill assigns 500 points. Then, these 500 points will be assigned to each sub factors.
Step 7: Develop the point manual. Job evaluation analyst will now develop a point manual that contains a written explanation of each job element. It also defines what is expected for the four levels of each sub factor. This information is needed to assign jobs to the appropriate level.
Step 8: Determine the rank of each job. The points assigned to each critical factor and its associated levels would be set for a particular job now. Then the all points assigned to each factor are added to find out the total number of points for the job. After the total points of each job are known, the jobs are ranked on that basis of descending order- from highest to lowest.
Step 9: Determine the money value of job. Now, money value of each point in each critical factor would be assigned to determine the total money value of each critical factor. Then, money value of all factors would be sum up. The result would be the total worth of the job. That amount would be the pay/compensation /remuneration/salary of that particular job.
4. Factor Comparison Method
The factor comparison method of job evaluation was originated by Eugene Benge. It permits job evaluation process to be factor by factor. Here, jobs are evaluated or compared against a common ‘benchmark’ of key points. A factor comparison scale, instead of a point scale, is used to compare five universal job factors/compensable factors given below:
i) Responsibility – Money, human resource, records, and supervisor responsibilities of the job.
ii) Skill –Facilities in muscular coordination and training in the interpretation of sensory requirements.
iii) Physical effort – Sitting, standing, walking, lifting, moving, and so on.
iv) Mental effort – Intelligence, problem solving, reasoning, and imagination.
v) Working conditions – Environmental factors such as noise, ventilation, hours, heat, hazards, fumes, and cleanliness.
The job evaluation committee compares critical or compensable job factors stated above. A factor-by-factor comparison is performed after key jobs are initially rated and judged. The key jobs serve as standards for other jobs. The involved steps are:
1. Determine the critical factors. The critical factors taken in this method are mentioned above.
2. Determine key jobs. Key jobs are jobs that are commonly found throughout the organization and in the employer’s labour market (Werther and Davis, 1996:385). It is taken because market prices of common jobs are easy to discover.
3. Apportion current wages for key jobs. The job evaluation committee then allocates a part of each key job’s current wage rate to each critical factor.
4. Place key jobs on a factor comparison chart. Once the compensable factors of each key job have been assigned a proportion of the wage rate, this information is transferred to a factor comparison chart. Key jobs are placed in the columns according to the amount of wages assigned to each critical factor.
5. Evaluate other jobs. : The wage rate in each compensable factor to a job placed in the chart is added to set the wage rate per hour of a particular job. Same process is applied to determine per hour wage rate of other jobs. Then, the committee ranks every job according to its relative worth as indicated by its wage rate.
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