Job Evaluation: Objectives, Principles and Methods of Job Evaluation!
Job evaluation is an orderly and systematic technique of determining the relative worth of the various jobs within the organisation so as to develop an equitable wage and salary structure.
According to International Labour Organisation (ILO) “Job evaluation may be defined as an attempt to determine and compare the demands which the normal performance of particular jobs makes on normal workers without taking into account of the individual abilities or performance of the workers concerned”.
“The aim of the majority of systems of job evaluation is to establish, on an agreed logical basis, the relative value of different jobs in a plant/industry.”
(ii) To eliminate wage inequities.
(iii) To develop a consistent wage policy.
(iv) To establish a rational basis for incentive and bonus schemes.
(v) To provide a frame work for periodic review and revision of wage rates.
(vi) To provide a basis for wage negotiation with Trade Unions.
(vii) To minimize wage discrimination on the basis of age, sex, caste, region etc.
(viii) To enable management to gauge and control the pay roll costs.
(a) Job evaluation must attempt to rate the job and not the man.
(b) Elements of job selected for the job must be common to most of the jobs, few in number and simple to identify and easy to understand.
(c) Clean definition of elements and consistency of degrees of such elements, improve accuracy of job evaluation.
(d) Secure willing co-operation and support of supervisors on job evaluation. This is obtained by selling this idea among them and obtains this participation in the process.
(e) Secure co-operation and participation from employees.
(f) Minimise number of wage rate within each grade.
They can be classified as:
1. Non-Quantitative Methods:
(a) Ranking or job comparison
(b) Grading or job classification.
2. Quantitative Methods:
(a) Point rating
(b) Factor comparison.
(a) Ranking or Job Comparison:
Ranking of job is normally done by an “expert committee” formed by the organisation. This committee consists of representatives from management and employees.
This committee may also consist of a certain number of experts either as permanent members or co-opted members on as required basis. Here the jobs are ranked as a “whole job” instead of breaking them into parts.
Three techniques can be used for ranking jobs.
They are as follows:
(i) Job Description:
In this technique a written jobs description is prepared for every job. The job descriptions are then studied and analysed. The differences between them in terms of duties, responsibilities, skill requirements etc, are noted.
Each job is assigned a rank depending upon its relative significance. Several raters may independently rank each job. The average of these ratings is calculated to determine the final rankings.
The following table illustrates the procedure:
In
this method, the rate is required to keep in mind all the jobs being
ranked. This may not be possible when the number of jobs is large. To
overcome this paired comparison method can be used.
(ii) Paired Comparison:
In this technique each job is paired with every other job in the series. The more difficult job in each pair is identified. Rank is then assigned on the basis of the number of times a job is rated more difficult.
This method can be understood by the following example:
(iii) Ranking along a Number Line:
In this technique ranks obtained through job descriptions and paired comparisons are spread along a number line. Each job is then placed along the line on the basis of its closeness to the highest ranked job.
For example, in the following number line, A is the highest ranked job; E is the lowest ranked job. Other jobs are spaced according to their closeness to the highest ranked job.
Advantages of Ranking Method Are:
1. Simple and easy to understand.
2. Faster and inexpensive.
Disadvantages:
1. Subjective and influenced by personal bias.
2. Specific job requirements are not taken into account.
3. Ranking does not give indications of actual differences between jobs; in terms of difficulties or responsibilities.
(b) Grading Method:
This method is made popular by civil services used mostly for administrative jobs. Here different “grades” or “classes” of jobs are predetermined based on certain criteria such as skill, knowledge, responsibility etc. Even though, initially grading method is envisaged by civil service for administrative and clerical jobs, later this concept became popular and extended to defence services, marketing, sales and managerial cadre jobs.
This method is applicable for workers, supervisors and managerial jobs. In India, the following classification methods are used.
Government Departments:
Class I, II, III… for officers in descending order.
Public Sector Units (Psu):
Grade 1, 2, 3… for officers in ascending orders.
Civil Services:
Group A, B, C… non-officers.
The steps involved in this method are as follows:
(i) Prefix the grade/classification.
(ii) Prepare job description.
(iii) Identify key jobs in each grade/class
(iv) Allocate all jobs in each grade/class based on criteria.
Advantages:
(i) This method is easy to understand and simple to operate.
(ii) It is more accurate and systematic than the ranking method.
(iii) It is economical and therefore suitable for small concerns.
(iv) It provides an opportunity to develop a systematic organisation structure.
(v) This method is used in government offices.
Disadvantages:
(i) It is very difficult to write accurate and precise description of job grades.
(ii) Some job may involve tasks which overlap more than one grade. It is difficult to classify such jobs in a particular grade.
(iii) The system is rigid and personal judgment is involved in deciding job classes and assigning jobs to specific classes.
(a) Point Rating:
It is the most widely used method of job evaluation. Under it, jobs are divided into component factors. Points or weightage are assigned to each factor depending on the degree of its importance in a particular job. The total points for a job indicate its relative worth or value. The procedure involved is as follows:
Steps 1:
Job Cluster:
Group jobs into similar families having common nature and characteristics. This arrangement assists realistic assessment of factors and comparison of jobs.
Steps 2:
Identification of Factors:
Based on the cluster of jobs, identify relevant factors which are common to these jobs. Unlike factors comparison, there is no restriction on the number of factors. Normally number of factors does not exceed 15.
Step 3:
Assigning Degrees to Factors:
For the purpose of fine tuning the edifices between jobs, each factor is subdivided into various degrees like, “illiterate”, “High school level”, “graduate”, “Post-graduate” etc.
Step 4:
Fixing Relative Weightages:
All factors will not carry same weightages. This weightage varies from cluster to cluster, committee of experts assign weightages. For e.g., a manual job carry higher weightage of “physical ability” compared to “mental ability” and so on.
These weightages are then converted to percentages. These percentages are counted as points for first degree. Points for higher degrees for the same factor are obtained by multiplying the first degree points by the corresponding number 2, 3, 4 etc.
Step 5:
Assign Money Value to Points:
Expert committee work out money values in terms of rupees per hour for a range of points having grouped them into different classes/grades.
Step 6:
Prepare Job Evaluation Manual:
Job evaluation manual is prepared by selecting a number of “key jobs” in each Department/cluster. For each key job, identify the relevant factors, their degrees and points.
Key jobs in job-evaluation manual serve an example for future evaluation of all other jobs. Job evaluation manual become more effective if “Job description” and Job specification can be redrafted in terms of factors identified for each cluster.
Step 7:
Rating Jobs:
With the help of job-evaluation manual and formula pre-determined for conversion of points to money value, we can now prepare the rating for all jobs by comparing term with key jobs.
Advantages:
(i) This method is the most comprehensive and accurate method of job evaluation. Factors are divided into sub factors and different degrees of a factor are considered.
Wage and Salary Administration 137
(ii) Assignment of point scores and money values is consistent thereby minimizing bias and human judgment.
(iii) Systematic wage differentials according to content of the job can be determined.
Disadvantages:
(i) It is expensive and time consuming.
(ii) Point method is complicated and an average worker cannot understand it easily.
(iii) Errors may occur if assigned point values are not realistic. It is difficult to determine factor levels and assigns point values.
(iv) It is difficult to apply this method to managerial jobs wherein the work content is not measurable in quantitative terms.
(b) Factor Comparison:
Under this method, a few key jobs are selected and compared in terms of common factors. The procedure involved is as follows.
(i) Select And Define The Factors:
The factors common to all jobs are selected and defined clearly. Skill, physical and mental effort, responsibility and working conditions are the main factors used.
(ii) Select Key Jobs:
Key jobs serve as standards against which other jobs can be compared. A key job is one having standardised contents and well accepted pay rate, key jobs should be a cross-section of all jobs in the organisation representing all levels of pay.
(iii) Rank Key Jobs by Factors:
Job descriptions are carefully analysed and the key jobs are rated in terms of the selected factors.
(iv) Decide Rates For Key Job:
A fair and equitable wage rate (hourly and daily) is dimensioned for each key job.
(v) Apportion the Wage Rate:
The wage rate for a job is allocated among the identified and ranked factors. A specimen rating and allocation scheme is given below.
(vi) Evaluate The Remaining Jobs:
The remaining jobs are compared with the key jobs in terms of each factor. Suppose, ‘carpenter job is to be similar to tool maker in skill (Rs. 25), machinist in physical effort (Rs. -7), welder in mental requirements (Rs. 14), painter in responsibility (Rs. 12), and painters in working condition (Rs. 18). Then, the wage rate for this job would be Rs.76.
Advantages:
1. Method is scientific being analytical and quantifiable.
2. Limited of factors makes this method simple and easy.
3. Jobs are compared with each other to obtain relative value.
4. Job pricing is directly obtained without intermediary point’s weightage.
Disadvantages:
1. Using just five factors are not realistic.
2. Direct determination of rating shift the focus of job evaluation from “job worth” to “job wage” in money value. This creates bias.
3. Requires expertise.
Job evaluation is an orderly and systematic technique of determining the relative worth of the various jobs within the organisation so as to develop an equitable wage and salary structure.
According to International Labour Organisation (ILO) “Job evaluation may be defined as an attempt to determine and compare the demands which the normal performance of particular jobs makes on normal workers without taking into account of the individual abilities or performance of the workers concerned”.
“The aim of the majority of systems of job evaluation is to establish, on an agreed logical basis, the relative value of different jobs in a plant/industry.”
Objectives of Job Evaluation:
(i) To determine equitable wage differentials between different jobs in the organisation.(ii) To eliminate wage inequities.
(iii) To develop a consistent wage policy.
(iv) To establish a rational basis for incentive and bonus schemes.
(v) To provide a frame work for periodic review and revision of wage rates.
(vi) To provide a basis for wage negotiation with Trade Unions.
(vii) To minimize wage discrimination on the basis of age, sex, caste, region etc.
(viii) To enable management to gauge and control the pay roll costs.
Principles of Job Evaluation:
The principles of job evaluation are as follows:(a) Job evaluation must attempt to rate the job and not the man.
(b) Elements of job selected for the job must be common to most of the jobs, few in number and simple to identify and easy to understand.
(c) Clean definition of elements and consistency of degrees of such elements, improve accuracy of job evaluation.
(d) Secure willing co-operation and support of supervisors on job evaluation. This is obtained by selling this idea among them and obtains this participation in the process.
(e) Secure co-operation and participation from employees.
(f) Minimise number of wage rate within each grade.
Methods of the Evaluation:
There are different methods of job evaluation.They can be classified as:
1. Non-Quantitative Methods:
(a) Ranking or job comparison
(b) Grading or job classification.
2. Quantitative Methods:
(a) Point rating
(b) Factor comparison.
1. Non-Quantitative Methods:
Here a job is compared as a whole with other jobs.(a) Ranking or Job Comparison:
Ranking of job is normally done by an “expert committee” formed by the organisation. This committee consists of representatives from management and employees.
This committee may also consist of a certain number of experts either as permanent members or co-opted members on as required basis. Here the jobs are ranked as a “whole job” instead of breaking them into parts.
Three techniques can be used for ranking jobs.
They are as follows:
(i) Job Description:
In this technique a written jobs description is prepared for every job. The job descriptions are then studied and analysed. The differences between them in terms of duties, responsibilities, skill requirements etc, are noted.
Each job is assigned a rank depending upon its relative significance. Several raters may independently rank each job. The average of these ratings is calculated to determine the final rankings.
The following table illustrates the procedure:
| Job | Rates X Rates Y Rates Z | Average |
| A BC |
(ii) Paired Comparison:
In this technique each job is paired with every other job in the series. The more difficult job in each pair is identified. Rank is then assigned on the basis of the number of times a job is rated more difficult.
This method can be understood by the following example:
| Pair | More difficult job | Rank |
| Assistant-upper division clerk | Assistant | 1 |
| Upper division clerk lower | Upper division clerk | 2 |
| Lower division clerk peon | Lower division clerk | 3 |
| Assistant – lower division clerk | Assistant | |
| Assistant peon | Assistant | |
| Upper Division clerk – Peon | Upper division clerk Peon |
In this technique ranks obtained through job descriptions and paired comparisons are spread along a number line. Each job is then placed along the line on the basis of its closeness to the highest ranked job.
For example, in the following number line, A is the highest ranked job; E is the lowest ranked job. Other jobs are spaced according to their closeness to the highest ranked job.
Advantages of Ranking Method Are:
1. Simple and easy to understand.
2. Faster and inexpensive.
Disadvantages:
1. Subjective and influenced by personal bias.
2. Specific job requirements are not taken into account.
3. Ranking does not give indications of actual differences between jobs; in terms of difficulties or responsibilities.
(b) Grading Method:
This method is made popular by civil services used mostly for administrative jobs. Here different “grades” or “classes” of jobs are predetermined based on certain criteria such as skill, knowledge, responsibility etc. Even though, initially grading method is envisaged by civil service for administrative and clerical jobs, later this concept became popular and extended to defence services, marketing, sales and managerial cadre jobs.
This method is applicable for workers, supervisors and managerial jobs. In India, the following classification methods are used.
Government Departments:
Class I, II, III… for officers in descending order.
Public Sector Units (Psu):
Grade 1, 2, 3… for officers in ascending orders.
Civil Services:
Group A, B, C… non-officers.
The steps involved in this method are as follows:
(i) Prefix the grade/classification.
(ii) Prepare job description.
(iii) Identify key jobs in each grade/class
(iv) Allocate all jobs in each grade/class based on criteria.
Advantages:
(i) This method is easy to understand and simple to operate.
(ii) It is more accurate and systematic than the ranking method.
(iii) It is economical and therefore suitable for small concerns.
(iv) It provides an opportunity to develop a systematic organisation structure.
(v) This method is used in government offices.
Disadvantages:
(i) It is very difficult to write accurate and precise description of job grades.
(ii) Some job may involve tasks which overlap more than one grade. It is difficult to classify such jobs in a particular grade.
(iii) The system is rigid and personal judgment is involved in deciding job classes and assigning jobs to specific classes.
2. Quantitative Methods:
In quantitative methods key factors of the job are selected and measured.(a) Point Rating:
It is the most widely used method of job evaluation. Under it, jobs are divided into component factors. Points or weightage are assigned to each factor depending on the degree of its importance in a particular job. The total points for a job indicate its relative worth or value. The procedure involved is as follows:
Steps 1:
Job Cluster:
Group jobs into similar families having common nature and characteristics. This arrangement assists realistic assessment of factors and comparison of jobs.
Steps 2:
Identification of Factors:
Based on the cluster of jobs, identify relevant factors which are common to these jobs. Unlike factors comparison, there is no restriction on the number of factors. Normally number of factors does not exceed 15.
Step 3:
Assigning Degrees to Factors:
For the purpose of fine tuning the edifices between jobs, each factor is subdivided into various degrees like, “illiterate”, “High school level”, “graduate”, “Post-graduate” etc.
Step 4:
Fixing Relative Weightages:
All factors will not carry same weightages. This weightage varies from cluster to cluster, committee of experts assign weightages. For e.g., a manual job carry higher weightage of “physical ability” compared to “mental ability” and so on.
These weightages are then converted to percentages. These percentages are counted as points for first degree. Points for higher degrees for the same factor are obtained by multiplying the first degree points by the corresponding number 2, 3, 4 etc.
Step 5:
Assign Money Value to Points:
Expert committee work out money values in terms of rupees per hour for a range of points having grouped them into different classes/grades.
Step 6:
Prepare Job Evaluation Manual:
Job evaluation manual is prepared by selecting a number of “key jobs” in each Department/cluster. For each key job, identify the relevant factors, their degrees and points.
Key jobs in job-evaluation manual serve an example for future evaluation of all other jobs. Job evaluation manual become more effective if “Job description” and Job specification can be redrafted in terms of factors identified for each cluster.
Step 7:
Rating Jobs:
With the help of job-evaluation manual and formula pre-determined for conversion of points to money value, we can now prepare the rating for all jobs by comparing term with key jobs.
Advantages:
(i) This method is the most comprehensive and accurate method of job evaluation. Factors are divided into sub factors and different degrees of a factor are considered.
Wage and Salary Administration 137
(ii) Assignment of point scores and money values is consistent thereby minimizing bias and human judgment.
(iii) Systematic wage differentials according to content of the job can be determined.
Disadvantages:
(i) It is expensive and time consuming.
(ii) Point method is complicated and an average worker cannot understand it easily.
(iii) Errors may occur if assigned point values are not realistic. It is difficult to determine factor levels and assigns point values.
(iv) It is difficult to apply this method to managerial jobs wherein the work content is not measurable in quantitative terms.
(b) Factor Comparison:
Under this method, a few key jobs are selected and compared in terms of common factors. The procedure involved is as follows.
(i) Select And Define The Factors:
The factors common to all jobs are selected and defined clearly. Skill, physical and mental effort, responsibility and working conditions are the main factors used.
(ii) Select Key Jobs:
Key jobs serve as standards against which other jobs can be compared. A key job is one having standardised contents and well accepted pay rate, key jobs should be a cross-section of all jobs in the organisation representing all levels of pay.
(iii) Rank Key Jobs by Factors:
Job descriptions are carefully analysed and the key jobs are rated in terms of the selected factors.
(iv) Decide Rates For Key Job:
A fair and equitable wage rate (hourly and daily) is dimensioned for each key job.
(v) Apportion the Wage Rate:
The wage rate for a job is allocated among the identified and ranked factors. A specimen rating and allocation scheme is given below.
| Key job | Wage rate | Skill | Physical effort | Mental requirement | Responsibility | Working condition |
| Tool maker | 80 | 25(1) | 5(5) | 23(1) | 24(1) | 3(5) |
| Welder | 75 | 20(3) | 15(2) | 14(3) | 11(4) | 15(2) |
| Machinist | 70 | 22(2) | 7(4) | 17(2) | 20(2) | 4(4) |
| Painter | 65 | 13(4) | 12(3) | 10(4) | 12(3) | 18(1) |
| Labourer | 50 | 10(5) | 19(1) | 5(5) | 4(5) | 12(3) |
The remaining jobs are compared with the key jobs in terms of each factor. Suppose, ‘carpenter job is to be similar to tool maker in skill (Rs. 25), machinist in physical effort (Rs. -7), welder in mental requirements (Rs. 14), painter in responsibility (Rs. 12), and painters in working condition (Rs. 18). Then, the wage rate for this job would be Rs.76.
Advantages:
1. Method is scientific being analytical and quantifiable.
2. Limited of factors makes this method simple and easy.
3. Jobs are compared with each other to obtain relative value.
4. Job pricing is directly obtained without intermediary point’s weightage.
Disadvantages:
1. Using just five factors are not realistic.
2. Direct determination of rating shift the focus of job evaluation from “job worth” to “job wage” in money value. This creates bias.
3. Requires expertise.
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