Job evaluation is a formal and systematic comparison, technique of jobs to determine the worth of one job relative to another. Job evaluation aims to determine a job s relative worth. Job evaluation eventually results in a wage or salary structure or hierarchy (this shows the pay rate for various jobs or groups of jobs). The basic principle of job evaluation is this Jobs that require greater qualifications, more responsibilities, and more complex job duties should receive more pay than jobs with lesser requirements
Importance of Job Evaluation:
- Job descriptions often do not adequately describe the full range of competencies required to perform job related duties.
- The process can support a pay system that is fair and equal, because there is a transparent way to compare job demands. Job evaluation does not determine actual pay, but is the basis for these decisions, normally the subject of negotiation between management and employees or their representatives. Only the job is evaluated, not the person in the position.
- It enables comparison of remuneration rates against the overall market, to inform effective responses to recruitment & retention, and turnover issues.
- It can usefully support career management and succession planning.
- After large-scale change, job evaluation can be particularly useful when many roles have changed in the process.
Job evaluation can have many uses, but it is equally important to remember what it is not. It is not concerned with the total volume of work, the number of people required to do it, the scheduling of work, or the ability of the position holder. It is not a performance appraisal system.
Preparing for the Job Evaluation:
Job evaluation is a judgmental process and demands close cooperation among supervisors, HR specialists, and employees and union representatives. The main steps include identifying the need for the program, getting cooperation, and then choosing an evaluation committee. The committee then performs the actual evaluation.
Identifying the need for job evaluation should not be difficult. For example, dissatisfaction reflected in high turnover, work stoppages, or arguments may result from paying employees different rates for similar jobs.
Employees may fear that a systematic evaluation of their jobs may reduce their pay rates, so getting employees to cooperate in the evaluation is important and he should know the actual aims of job evaluation.
Third, choose a job evaluation committee. The committee usually consists of about five members, most of whom are employees. Management has the right to serve on such committees, but employees may view this with suspicion.
Each committee member should receive a manual explaining the job evaluation process, and how to conduct the job evaluation.
Methods of Job Evaluations
Several techniques of job evaluation have been developed. Each has its advantages and disadvantages, costs and risks.
- Job Ranking
This method is one of the simplest to administer. Jobs are compared (in rank order) to each other on the basis of skill, effort (physical and mental), responsibility (supervisory and budgetary), which collectively are deemed to determined the overall worth of a job to the organization. Working conditions can also be taken into account in assessing the difficulty of the job.
Job Ranking Steps:
- Obtain job information:
Job description (duties) but not the job specifications (skills, decision making or problem solving).
- Select and group jobs:
Usually we rank jobs per department (not the whole organization) and this eliminates the need for direct comparison.
- Select compensable factors:
It’s common to use one factor (e.g. job difficulty) and to rank jobs based on that.
- Rank jobs:
Each rater is given a set of cards with brief job descriptions, and they are asked to rank these cards from lowest to highest.
They may also use “alternation ranking method” to be more accurate, and we can then slot additional jobs between those already ranked.
- Combine ratings:
The rating committee (or employer) then takes averages.
Usage of Job Ranking Method:
Small companies with less than 20 job to rank.
Advantages:
- Simple
- Low cost
- Time saving and effective when using with small org.scale
Disadvantages:
- More difficult to administer as the number of jobs increases.
- Rank order judgments can be relatively subjective.
- Tells you more about relationship between the jobs within the organization than about jobs relative to others in the sector so is less effective at providing an evidence base for pay determination.
Job classification:
With this method jobs are classified into a pre-existing hierarchy of grades/categories. So some work already has to have been completed to identify and describe layers of competency and responsibility throughout the organization. Each level in the grade/category structure would typically have a detailed description associated with a particular level in the organization and associated job. The classification of an individual position is decided by comparing the ‘whole job’ against the corresponding grade providing the closest match to the job. To ensure equity in job grading and remuneration, a common set of job grading standards and instructions are often used.
The standards do not attempt to describe every aspect of each position in the jobs covered, but to identify and describe those key characteristics that are significant for distinguishing different levels of competency and responsibility. 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 organization
Steps:
- Write grade description (see below) similar to job description (predetermined standard
- Jobs into grades based upon how well they fit those descriptions.
Usage of Job classification Method:
Governmental companies
Advantages:
- Simple to apply if job grading standards and instructions are developed and understood.
- End up with grouping jobs into classes or grades.
Disadvantages:
- Classification judgments can be relatively subjective.
- The standard used for comparison (the grade/category structure) may have built in biases that would negatively affect certain groups of employees (e.g. females or minorities).
- Anomalies will occur where jobs appear to fit within more than one grade/category, and may require negotiation.
Factor Comparison Method:
This is a more sophisticated version of classification, but is considered by many to be the most robust job evaluation method. Typically a small number of compensable factors such as skill, responsibilities, effort, working conditions, expertise, judgment, accountability are identified. Then each of these is defined and described.
Usage of factor comparison method:
Widely used more than the previous methods.
Advantages:
- Accurate and systematic.
- Quantitative (ends up with numerical values).
- Fairly easy to explain.
Disadvantages:
- Difficult to build one.
- The compensable factors may differ from one organization to another.
The point methods:
Overall aim is to determine the degree to which the jobs you are evaluating contain selected compensable factors. It involves identifying several compensable factors for the jobs, as well as the degree to which each factor is present in each job.
A quantitative job-to-predetermined standard comparison technique that involves:
- Identifying several compensable factors, each with several degrees.
- Identifying the degree to which each compensable factor is present in the job.
- Awarding points for each degree of each factor.
- Calculating a total point value for the job by adding up the corresponding points for each factor.
Usage of point method:
Widely used
Advantage:
- Accurate and systematic.
- Quantitative (ends up with numerical values).
- Fairly easy to explain.
Disadvantage:
- Complexity –expensive
- Difficult to build one –time consuming
- Compensable factors may differ from one organization to another