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, and performance or trade agreements. Job evaluation is
the method of ordering jobs or positions with respect to their value or worth
to the organisation, 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 organisation. The two basic approaches are the market data
approach and the job content approach
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 organisation. The 'worth' of a job is usually based on
judgments of skill, effort (physical and mental), responsibility (supervisory
and fiscal), and working conditions.
Advantages
o
Simple.
o
Very effective when there are relatively few jobs to be evaluated
(less than 30).
Disadvantages
o
Difficult to administer as the number of jobs increases.
o
Rank judgments are subjective.
o
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 organisation.
Ranking Methods
o
Ordering: Simply place job titles on 3x5 inch index cards then
order the titles by relative importance to the organisation.
o
Weighting
o
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
o
Simple.
o
The grade/category structure exists independent of the jobs.
Therefore, new jobs can be classified more easily than the Ranking Method.
Disadvantages
o
Classification judgments are subjective.
o
The standard used for comparison (the grade/category structure)
may have built in biases that would affect certain groups of employees (females
or minorities).
o
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 organisation 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 judgments 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:
o
Skill
o
Responsibilities
o
Effort
o
Working Conditions
These factors can then be
further defined.
o Skill :
§ Experience
§ Education
§ Ability
o Responsibilities
§ Fiscal
§ Supervisory
o Effort
§ Mental
§ Physical
o 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
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 judgments 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).
