Introduction to Job Evaluation

Introduction: Once a right candidate is placed on a right

job, the person needs to be duly compensated for the job
he/she performs. In the pursuit of equal payment, there
should be established a consistent and systematic
relationship among base compensation rates for all the
jobs within the organizations. The process of such
establishment is termed “job evaluation”.
Concept and related terminologies of job evaluation: In the area of job
evaluation study, a certain amount of technical terminology is used in order
to facilitate communication. It is therefore desirable to list and understand
allied terms in the job evaluation, as well as some terms that are related to
and often confused with job evaluation.
Position: A position is a group of tasks assigned to one individual. There are
as many positions in a firm as there are personnel.
Job: Edwin B.Flippo describes job as a group of positions that are similar as
to kind and level of work. In some instances only one position may be
involved, simply because no other similar position exists. For example, in
the typical firm the position of human resource manager also constitute a job
since there is only one human resource manager in the organizing.
Job Analysis: It is the process of studying and collecting information
relating to the operations and responsibilities of a specific job. The
immediate products of this analysis are job descriptions and job
specifications.
Motion study: This also involves study of the job. Motions study is one
of the ways of studying job. It is a process of analyzing a job to find the
easiest, most effective, and most economical method of doing it. As
such, motion study is a part of the job design function.
Job description: It is an organized, factual statement of the duties and
responsibilities of a specific job. In brief, it should tell what is to be
done, how it is to be done, and why. It is a standard of function, in that it
defines the appropriate and authorized content of a job.
Job specification: It is a statement of the minimum acceptable human
qualities necessary to perform a job properly. It is a standard of personnel
and designates the qualities required for acceptable performance.
Evaluation: Wigley explains evaluation as a data reduction process that
involves the collection of large amounts of data which are analyzed and
synthesized into an overall judgment of worth or merit. The implication here
is that the judgment of worth can be supported by the data. In her review,
Foxon found similar definitions referring to judgments of value or worth.
Job Evaluation: It is a systematic and orderly process of determining the
worth of a job in relation to other jobs. The objective of this process is to
determine the correct rate of pay. It is therefore not the same as job analysis.
Rather it follows the job analysis process, which provides the basic data to
be evaluated.
In simple worlds, job evaluation is the rating of jobs in an organization. This
is the process establishing the value or worth of jobs in a job hierarchy and
compares the relative intrinsic value or worth of jobs within an organization.
Some renounced definitions of job evaluation are described below.
Scott, Clothier and Priegel defines job evaluation as “the operation of
evaluating a particular job in relation to other jobs either within or outside
the organization”.
Dale Yoder described job evaluation as “a practice which seeks to provide a
degree of objectivity in measuring the comparative value of jobs within an
organization and among similar organizations”.
Edwin B.Flippo defines job evaluation as “a systematic and orderly process
of determining the worth of a job in relation to other jobs”.
Arthur A. Sloane described job evaluation as “any formalized system that
attempts to determine the relative worth of different jobs in the organization
so that jobs of greater value can be rewarded by greater pay”.
According to the International Labor Organization (ILO), “job
evaluation is an attempt to determine and compare the demands which the
normal performance of a particular job makes on normal workers, without
taking into account the individual abilities or performance of the workers
concerned”.
The British Institute of Management defines “job evaluation as the
process of analysis and assessment of jobs to ascertain reliably their
negative worth using the assessment as the basis for a balanced wages
structure”.
 Objectives of job evaluation
1.Establish a standard procedure for determining the relative worth

of each job in an organization;

2.Ensure equitable wage for a job and reasonable wage differentials

between different jobs in a hierarchical organization;

3.Determine the rate of pay for each job which is fair and equitable

with relation to other jobs in the plant, community or industry;

4.Eliminate wage inequalities;

5.Use as a basis for fixing incentives and different bonus plans;

 Cont..
6. Promote a fair and accurate consideration of all

employees for advancement and transfer;

7. Provide information for work organization, employees‟

selection, placement, training and other similar purposes;

8. Provide a benchmark for making career planning for the

employees in the organization and;

9. Ensure that like wages are paid to all qualified

employees for like work.

 Job Evaluation Method
A number of job evaluation methods have been developed since the 1920‟s, and

many, if not most, of them are still used. They all have the same final objective –

ranking jobs in terms of their relative worth to the organization so that an equitable

rate of pay can be determined for each job. As the job evaluation is mostly a

judgmental process that would probably use one of the job evaluation methods,

which are commonly grouped into two major categories: quantitative and non-

quantitative. The basic difference between these two methods lies in the sense that,

under non-quantitative methods, a job is compared as a whole with other jobs in the

organization, whereas in case of quantitative methods, the key factors of a job are

selected and, then measured. The most commonly used non-quantitative methods

are ranking and job classification or grading method, while the most common

quantitative methods are factor comparison and point rating.

 Non-quantitative methods
Non-quantitative methods call for the evaluation of a whole job
relative tot other jobs or to general descriptions of jobs within an
organization. For instance, a job description of a customer service
representative may be compared to the job description of a word
processing specialist. The main role of the evaluator is to determine
which of the jobs is more important or worth more to the
organization. The major types of non-quantitative job evaluation
procedures are ranking and job classification.
Ranking Method of job evaluation: This is simplest form of job
evaluation method. The method involves ranking each job relative to all
other jobs, usually based on some overall factor like „job difficulty‟. Each
job as a whole is compared with other and this comparison of jobs goes on
until all the jobs have been evaluated and ranked. All jobs are ranked in the
order of their importance from the simplest to the hardest or from the highest
the lowest. The importance of order of job is judged in terms of duties,
responsibilities sand demands on the job holder. The following steps are
involved in ranking jobs.
1. Obtain job information - The first step is job analysis. Job descriptions
for each job are prepared and these are the basis on which the ranking s are
made. The job ranking method usually ranks jobs according to „the whole
job‟ rather than a number of compensable factors.
 Cont…
2. Select raters and jobs to be rated - Ranking all the jobs, at a time, is

usually not possible. The more usual procedure involves ranking jobs by

department or in „clusters‟ i.e. factory workers, clerical workers and so on.

This eliminates the need for having to compare directly, say, factory jobs

and clerical jobs.

3. Select Compensable factors – In the ranking method, it is common to

use just one factor, for instance job difficulty, and to rank jobs on the basis

of „the whole job‟. Regardless of the number of factors you choose, it is

advisable to carefully explain the definition of the factor(s) to the

evaluators so that they evaluate the jobs consistently

 Cont..
4. Rank jobs - Next, the jobs are ranked. The simplest way to do this

involves giving each rater a set of index cards, each of which contains a

brief descript of a job. These cards are then ranked from lowest to highest.

5. Combine Rating - It is usually to have several raters rank the jobs

independently. Finally, divide all the ranked jobs into appropriate groups or

classifications by considering the common features of jobs such as similar

duties, skills, or knowledge required. All the jobs within a particular group

or classification receive the same wage or range of raters. Then, once this

is accomplished, the rating committee can simply average the ranking.

Merits: The job classification method has several advantages. The
major merits of the method are:
1.This method is easy to understand and simple to operate.
2.It is economical and , therefore, suitable for small organizations.
3. The grouping of jobs into classifications makes pay determination
problems easy to administer.
4. This method is useful for Government jobs.
Demerits: The job classification method also has some
disadvantages. The major demerits of the method are:
1.The method suffers form personal bias of the committee members.
2.It cannot deal with complex jobs which will not fit neatly into one
grade.
3. This method is rarely used in industries.
4. It is difficult to know how much of a job’s rank is influenced by the
man on the job.
5. The system is rather rigid and unsuitable for a large organizations
or for very varied work.
Quantitative Methods: Quantitative methods divide jobs into component parts
and require absolute or relative value judgments about how much of a
component part a particular job requires. The two most popular types of
quantitative systems are the point rating and factor comparison methods.
Point Rating Method: This is most widely used system of job evaluation. The
method evaluates the compensable factors of each job. It involves a more
detailed, quantitative and analytical approach to the measurement of job work.
Under this method 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.
Factors Comparison Method - This is a combination of both rating
and point rating methods. It means rates jobs by comparing them and
makes analysis by breaking jobs into compensable factors. This
system is usually used to evaluate white collar, professional and
managerial positions. The mechanism for evaluating jobs under this
method involves the flowing steps.
1. Determine the compnesible factors – Analysts must first decide
which factors are common and important in a broad range of jobs.
The critical factors like responsibility, skill, mental efforts, physical
effort and working conditions are most commonly used. Some
organizations use different factors for managerial, professional, sales,
and other types of jobs.
2. Determine key jobs: Key jobs are those that are commonly found
throughout the organization and are common in the employer‟s
market. Common jobs re sleeted because it is easier to discover the
market rate for them. Ideally, these benchmark jobs should be
accepted by employee as key jobs and should encompass a wide
variety of critical factors to be evaluated. Typically, 10-25 key jobs
are selected by the committee.
3. Allocation present wages for key jobs: The job evaluation
committee then allocates a part of each key job‟s current wage rate to
each critical factor. The proportion wage assigned to each of the
different compensable factors depends on the importance of the
factor. The base rate agreed upon by the company.