Job Evaluation (Human Resource Management)

Job evaluation is the process to assess the relative value of a job

in an organisation by comparing it with other jobs within the
organisation and with job market outside. It attempts to make a
methodical comparison between jobs to assess their relative worth
for the purpose of establishing a rational pay structure. Job
evaluation is different from job analysis. Job analysis is a
systematic way to accumulate information about a job. Every job
evaluation method requires some basic job analysis in order to
provide accurate information about the jobs concerned.
Therefore, job evaluation begins with job analysis and ends at that
point where the value of a job is determined for achieving pay
equity between jobs. Basically, Job evaluation is the application
of a process to identify, analyse and measure each job against
established criteria and weigh the relative value of jobs in a
uniform and consistent manner. It is not used to obtain a salary
increase for the incumbent.
Major objectives of job evaluation is to establish logical &
accurate relationship of each job to other jobs within
organisation, to regulate the wage rate for each job in relation to
other job in the organisation, to select employees accurately and
train, promote or transfer them impartially, to encourage
employee goodwill, strengthen morale and provide an incentive
and to provide management with a basis for proper control.

 International Labor Organization (ILO) has defined a job

evaluation as: “Job evaluation is an attempt to determine and
compare demands which the normal performance of a particular
 job makes on normal workers without taking into account the
individual performance of the workers concerned”.
 According to Alford and Beatty, “Job Evaluation is the application
of the Job Analysis technique to the qualitative measurement of
relative job worth, for the purpose of establishing consistent wage
rate differentials by objective means. It measures the differences
between jobs on the job requirements, and establishes the
differential numerically (job rating), so that it can be converted to
wage rate after the wage level is determined”.
 According to Kimball and Kimball Jr., “Job Evaluation represents
an effort to determine the relative value of every job in a plant and
to determine what the fair basic wage for such a job should be.”

Features of Job Evaluation

The primary objective of job Evaluation is to find out the value of work, but this is a value
which varies from time to time and from place to place under the influence of certain
economic pressure. The main features of job Evaluations are as follows:

 It attempts to assess jobs, not people.

 Job Evaluation is the output provided by job Analysis.
 It provides bases for wage negotiation founded on facts.
 Job Evaluation does not design wage structure, it helps in rationalizing the system by
reducing number of separate and different rates.
 Job Evaluation is done by group of experts.
 Job Evaluation determines the value of job and the value of each of the aspects of job
such as skill and responsibility levels are also related and studied in connection with the
job.
 Job Evaluation helps the management to maintain high levels of employee productivity
and employee satisfaction.

Objectives of Job Evaluation

The basic objective of job evaluation is to determine the relative contributions that the
performance of different jobs makes towards the realization of organizational objectives.
This basic objective of job evaluation serves a number of purposes which may be
grouped into three categories: wage and salary fixation, restructuring job hierarchy and
overcoming anomalies.

1. Wage and Salary Fixation: The basic principle of wage and salary fixation is that it
should be based on the relative contributions of different jobs and not on the basis of who
 the job holders are. If this principle is adopted, the first requirement is to identify the likely
contributions of different jobs. This is what job evaluation precisely does. It provides the
information about what is the worth of a job in terms of its contributions to the achievement
of the organizational effectiveness. From equity point of view, this method is more
appropriate.
2. Restructuring Job Hierarchy: Job evaluation helps in restructuring job hierarchy. Job
hierarchy refers to arranging various types of jobs in the order of their importance wither
on ascending basis or descending basis. Sometimes, job hierarchy becomes too lengthy
creating administrative problems and creating organizational problems by increasing the
number of levels in the organization. In today’s context, more emphasis is being put on
flat structure instead of tall one. Job evaluation exercise can be undertaken to reduce the
number of job levels by merging closely related jobs together.
3. Overcoming Anomalies: Job evaluation, if carried on periodically and objectively, helps
in overcoming various anomalies which may develop in an organization over the period
of time with regard to compensation management. Knowles and Thompson have
identified that there are following anomalies and evils which may develop in an
organization and may be overcome by job evaluation.
 Payment of high wages and salaries to persons who hold jobs and positions not requiring
great skill, effort and responsibility;
 Paying beginners less than that they are entitled to receive in terms of what is required of
them;
 Giving a raise to persons whose performance does not justify the raise;
 Deciding rates of pay on the basis of seniority rather than ability;
 Payment of widely varied wages and salaries for the same or closely related jobs and
positions; and
 Payment of unequal wages and salaries on the basis of race, sex, religion, or political
differences.

Methods of Job Evaluation

llowing are the methods of job-evaluation:
(A) Non-Quantitative Methods:
(1) Ranking Method.
(2) Job classification or Grading System.
(B) Quantitative Methods:
(1) Factor Comparison Method.
(2) Point Method.
The non-quantitative or non-analytical or summary methods utilise non-
quantitative methods of listing jobs in order of difficulty. They are simple
methods. The job is treated as a whole and job descriptions rather to job
specifications are often utilised. On the other hand, quantitative or analytical
methods use quantitative techniques in listing the jobs. They are more complex
and are time consuming. Let us discuss these methods in detail.

(1) Ranking Method—Under this system, all the jobs are arranged or ranked in the
order of importance from the simplest to the hardest, or in the reverse order each
successive job being higher or lower than the previous one in the sequence. It is
not necessary to have job descriptions, although they are useful. A common
practice is to arrange all the jobs according to their requirements by rating them
and then to establish the group or classification. In this method, jobs are not split
up into their component parts, however comparison is made on the basis of
whole jobs.

Three techniques are generally used for ranking purposes:

1. Utilizing job descriptions.
2. Making paired comparisons.
3. Ranking along a number line.
.

(2) Job classification or grading method—Job classification or job grading is a

process of scientific study of all the facts about a job, so as to reveal the content of it.
Job-grading refers to the classification and analysis of jobs which are performed in an
organisation and to their relative levels. According to Denyer "Job-grading consists of a
scientific study of all jobs (job evaluation) and then placing of these jobs into broad
categories called job-grades. It is fundamentally a technique of determining the
differences between jobs, and of rationalising rates of pay in large organisations." Job-
grading is done by studying the essential characteristics of each job. These
characteristics are:
(a) the experience required,
(b) the skill required,
© the initiative required,
(d) the level of responsibility entailed, and
(e) the level of supervision needed for the job.

(3) Point Method—This method is most widely used system of job evaluation. It
involves a more detailed, quantitative and analytical evaluation of jobs. It requires
identifying a number of compensable factors i.e. various characteristics of jobs and the
determining degree to which each of these factors is present in the job. A different
number of points is usually assigned for each degree, of each factor. According to Dale
S. Beads— "Every point plan consists of a number of compensable job factors or
characteristics. This can be classified under four headings of skill, effort, responsibility,
and job conditions."
Following are the steps involved in point method:
(i) Determination of Type of Job-
(ii) Selection of Factors—precisely. It would ensure consistency in evaluation by
different job evaluators.
(iii) Construction of Factor Scales—
(iv) Evaluation of jobs—
(v) Conducting the wage survey-
(vi) Design the wage structure
(vii) Adjusting the existing wage structure—

(4) Factor Comparison Method—Thomas E. Hitten was the first to originate factor
comparison -method of job-evaluation. This method determines the relative rank
of the jobs to be evaluated in relation to monetary scale. It is often used in
evaluating, the managing administrative and white-collared jobs. It is essentially a
combination of the ranking and point systems. Like the rank order method it rates
jobs by comparing one with another. Like the point system, it is more analytical in
the sense of sub-dividing jobs into compensable factors and finds ratings one
expressed in terms of numbers. These factors are not predetermined and chosen
on the basis of job-analysis. The most widely used factors are (a) mental
requirements (b) skill requirements, © physical requirements (d) responsibilities
and (e) working conditions.
Under this system, a few jobs arc selected as key jobs which serve as standard
against which all other jobs are compared. Key job is one whose contents has
been stabilised over a period of time and whose wage rate is considered to be
presently correct by the management and the union. The steps in evaluating the
job under this method can be enumerated as under:
(a) first, various factors (as given above) are selected and defined clearly.
(b) Secondly, key jobs are selected.
(c.) Thirdly, wages are fixed for different factors of each key job.
(d) Fourthly, a comparison scale is developed. Each key job should be fitted to it,
when all the key jobs have been evaluated and wages allocated in this manner, a
job comparison scale is constructed.
(e) Fifthly, jobs are evaluated factor by factor, in relation to key jobs on job
comparison scale. Then each job is to be evaluated and compared to other jobs
in terms of each factor, and
(f) Lastly, a wage structure is designed, adjusted and operated.
The system is usually used to evaluate white collar, professional and managerial
positions.
Procedure of job evaluation:
Though the common objective of job evaluation is to
establish the relative worth of jobs in a job hierarchy, there
is no common procedure of job evaluation followed by all
organisations. As such, the procedure of job evaluation
varies from organisation to organisation. For example, a
job e valuation procedure may consist of the eight stages
as delineated in Figure 14.1.

1. Preliminary Stage:
This is the stage setting for job evaluation programme. In
this stage, the required information’s obtained about
present arrangements, decisions are made on the need for
a new programme or revision of an existing one and a clear
cut choice is made of the type of programme is to be used
by the organisation.

2. Planning Stage:
In this stage, the evaluation programme is drawn up and
the job holders to be affected are informed. Due
arrangements are made for setting up joint working
parties and the sample of jobs to be evaluated is selected.

3. Analysis Stage:
This is the stage when required information about the
sample of jobs is collected. This information serves as a
basis for the internal and external evaluation of jobs.

4. Internal Evaluation Stage:

Next to analysis stage is internal evaluation stage. In the
internal evaluation stage, the sample of bench-mark jobs
are ranked by means of the chosen evaluation scheme as
drawn up at the planning stage. Jobs are then graded on
the basis of data pending the collection of market rate
data. Relative worth of jobs is ascertained by comparing
grades between the jobs.

5. External Evaluation Stage:

In this stage, information is collected on market rates at
that time.

6. Design Stage:
Having ascertained grades for jobs, salary structure is
designed in this stage.

7. Grading Stage:
This is the stage in which different jobs are slotted into the
salary structure as designed in the preceding stage 6.

8. Developing and Maintaining Stage:

This is the final stage in a job evaluation programme. In
this stage, procedures for maintaining the salary structure
are developed with a view to accommodate inflationary
pressures in the salary levels, grading new jobs into the
structure and regarding the existing jobs in the light of
changes in their responsibilities and market rates.