Job evaluation means systematically determining relative worth of jobs to create job structure.

An attempt to identify inputs that are most valuable to the organization & to develop job hierarchy based on which jobs have more or less of those dimensions Job Evaluation Methods: The essence of compensation administration is job evaluation and the establishment of the pay structure. Lets now turn our attention to the topic of job evaluation. By job evaluation we mean using the information in job analysis to systematically determine the value of each job in relation to all jobs with in the organization. In short, job evaluation seeks to rank all the jobs in the organization and place them in a hierarchy that will reflect the relative worth of each. There are four general job evaluation methods. a. Ranking method: Raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company. This method requires a committee typically composed of both management and employee representative to arrange job in a simple rank order from highest to lowest. No attempts are made to break down the jobs by specific weighted criteria. The committee members merely compare two jobs and judge which one is more important, or more difficult to perform. Then they compare the other job with the first two, and so on until all the jobs have been evaluated and ranked. The most obvious limitation to the ranking method is its sheer inability to be managed when there are a large number of jobs. Other drawbacks to be considered are the subjectivity of the method- there are no definite or consistent standards by which to justify the rankings- and the fact that because jobs are only ranked in terms of order, we have no knowledge of the distance between the ranks. b. Classification method: A job evaluation method by which a number of classes or grades are defined to describe a group of jobs is known as Classification method. The classifications are created by identifying some

common denominator skills, knowledge, responsibilities with the desired goal being the criterion of a number of distinct classes or grades of jobs. Once the classifications are established, they are ranked in an overall order of importance according to the criteria chosen, and each job is placed in its appropriate classification. This later action is generally done by comparing each positions job description against the classification description and benchmarked jobs. The classification method shares most of the disadvantages of the ranking approach, plus the difficulty of writing classification descriptions, judging which jobs go where, and dealing with jobs that appear to fall into more than one classification. c. Factor comparison method: Raters need not keep the entire job in mind as they evaluate; instead, they make decisions on separate aspects, or factors, of the job. A basic underlying assumption is that there are five universal job factors: (1) Mental Requirements, (2) Skills, (3) Physical Requirements, (4) Responsibilities, and (5) Working Conditions. The committee first rank each of the selected benchmark jobs on the relative degree of difficulty for each of the five factors. Then, the committee allocates the total pay rates for each job to each factor based on the importance of the respective factor to the job. A job comparison scale, reflecting rankings and money allocations, is developed next. The raters compare each job, factor by factor, with those appearing on the job comparison scale. Then, they place the jobs on the chart in an appropriate position. d. Point method: Raters assign numerical values to specific job components, and the sum of these values provides a quantitative assessment of a jobs relative worth. The point method requires selection of job factors according to the nature of the specific group of jobs being evaluated. After determining the group of jobs to be studied, analysts conduct job analysis and write job descriptions. Next, the analysts select and define the factors to be used in measuring job value and which become the standards used for the evaluation of jobs. Education, experience, job knowledge, mental effort, physical effort, responsibility, and working conditions are examples of factors typically used. The committee establishes factor weights according to their relative importance in the jobs being evaluated, and then determines the total number of points to be used in the plan. A

distribution of the point values to job factor degrees is made, with the next step being the preparation of a job evaluation manual. Hay guide chart-profile method: A highly refined version of the point method that uses the factors of know-how, problem solving, accountability, and, where appropriate, working conditions.

What is job evaluation? what are the different ways in which a job evaluation can be carried out? Job evaluation is a systematic assessment of job content. It establishes the worth of a job in terms of salary or wage compared to other jobs. Many elaborate schemes have been developed and applied with varying degrees of success. While some structure is necessary on a project, pay is more likely to be governed by market conditions, scarcity, individual knowledge, performance or trade agreements. Job evaluation is the method of ordering jobs or positions with respect to their value or worth to the organization, and placing them into job families and zones. Job evaluation is the A formal process by which management creates a job worth hierarchy within an organization. The two basic approaches are the market data approach and the job content approach. The different ways in which a job evaluation can be carried out is i) Ranking - This method is one of the simplest to administer. Jobs are compared to each other based on the overall worth of the job to the organization. The 'worth' of a job is usually based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal), and working conditions. Advantages : * Simple. * Very effective when there are relatively few jobs to be evaluated (less than 30). Disadvantages : * Difficult to administer as the number of jobs increases. * Rank judgements are subjective. * Since there is no standard used for comparison, new jobs would have to be compared with the existing jobs to determine its appropriate rank. In essence, the ranking process would have to be repeated each time a new job is added to the organization. Ranking Methods * Ordering Simply place job titles on 3x5 inch index cards then order the titles by relative importance to the organization.

* Weighting * Paired Comparison ii) Classification - Jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. The classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used. Because of differences in duties, skills and knowledge, and other aspects of trades and labor jobs, job grading standards are developed mainly along occupational lines. The standards do not attempt to describe every work assignment of each position in the occupation covered. The standards identify and describe those key characteristics of occupations which are significant for distinguishing different levels of work. They define these key characteristics in such a way as to provide a basis for assigning the appropriate grade level to all positions in the occupation to which the standards apply. Advantages * Simple. * The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method. Disadvantages * Classification judgments are subjective. * The standard used for comparison (the grade/category structure) may have built in biases that would affect certain groups of employees (females or minorities). * Some jobs may appear to fit within more than one grade/category. iii)Factor Comparison - A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are: o Skill o Responsibilities o Effort o Working Conditions Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics. o equitable pay (not overpaid or underpaid) o range of the factors (for each factor, some jobs would be at the low end of the factor while others would be at the high end of the factor). This process establishes the rate of pay for each factor for each benchmark job. Slight adjustments may need o be made to the matrix to ensure equitable dollar weighting of the factors. The other jobs in the organization are then compared with the benchmark jobs and rates of pay for each factor are summed to determine the rates of pay for each of the other jobs. Advantages o The value of the job is expressed in monetary terms. o Can be applied to a wide range of jobs. o Can be applied to newly created jobs. Disadvantages o The pay for each factor is based on judgements that are subjective.

o The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities). iv) Point Method - A set of compensable factors are identified as determining the worth of jobs. Typically the compensable factors include the major categories of: * Skill * Responsibilities * Effort * Working Conditions These factors can then be further defined. * Skill * Experience * Education * Ability * Responsibilities * Fiscal * Supervisory * Effort * Mental * Physical * Working Conditions * Location * Hazards * Extremes in Environment The point method is an extension of the factor comparison method. Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job. Jobs are then grouped by total point scores and assigned to wage/salary grades so that similarly rated jobs would be placed in the same wage/salary grade. Advantages + The value of the job is expressed in monetary terms. + Can be applied to a wide range of jobs. + Can be applied to newly created jobs. Disadvantages + The pay for each factor is based on judgements that are subjective. + The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities).