Job Evaluation

Job Evaluation
Job evaluation is the process of systematically determining a relative internal value of a job in an
organization. In all cases the idea is to evaluate the job, not the person doing it. Job evaluation is the
process of determining the worth of one job in relation to that of the other jobs in a company so that a fair
and equitable wage and salary system can be established.
Various methods of Job Evaluation
 Ranking Method
Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are
arranged from highest to lowest, in order of their value or merit to the organization. Jobs also can be
arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather
than on the basis of important factors in the job; and the job at the top of the list has the highest value and
obviously the job at the bottom of the list will have the lowest value.
Example: This type of concept is in frequent use in group discussions. A group of 10-14 persons is
selected and a common topic is given for discussion. The person performing well is given a higher
ranking in comparison to person with inferior performance.
 Classification Method
According to this method, a predetermined number of job groups or job classes are established and jobs
are assigned to these classifications. This method places groups of jobs into job classes or job grades.
Separate classes may include office, clerical, managerial, personnel, etc.
Example: In IT companies, all the new level entrants are given same classification in terms of
compensation, job responsibility, designation, etc. Similarly, in government organization, people on the
same designation share have a common responsibility, profile and salary.
 Factor Comparison Method
A more systematic and scientific method of job evaluation is the factor comparison method. Though it is
the most complex method of all, it is consistent and appreciable. Under this method, instead of ranking
complete jobs, each job is ranked according to a series of factors. These factors include mental effort,
physical effort, skill needed, supervisory responsibility, working conditions and other relevant factors (for
instance, know-how, problem solving abilities, accountability, etc.). Pay will be assigned in this method
by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs
may be divided among the factors weighed by importance (the most important factor, for instance, mental
effort, receives the highest weight). In other words, wages are assigned to the job in comparison to its
ranking on each job factor.
Example: This type of method is prevalent in Army and other armed forces which require tough skill set.
 Point method
Here, jobs are expressed in terms of key factors. Points are assigned to each factor after prioritizing each
factor in the order of importance. The points are summed up to determine the wage rate for the job. Jobs
with similar point totals are placed in similar pay grades. The procedure involved may be explained thus:
(a) Select key jobs. Identify the factors common to all the identified jobs such as skill, effort,
responsibility, etc.
(b) Divide each major factor into a number of sub factors. Each sub factor is defined and expressed
clearly in the order of importance, preferably along a scale.
Example: In many companies, employees only with an MBA degree can reach managerial level position.
The job is factored in terms of education and other factors.
Importance of Job Evaluation
Job Position
Job position refers to the designation of the job and employee in the organization. Job position forms an
important part of the compensation strategy as it determines the level of the job in the organization. For
example management level employees receive greater pay scale than non-managerial employees. The
non-monetary benefits offered to two different levels in the organization also vary.
Job Description
Job description refers the requirements an organization looks for a particular job position. It states the key
skill requirements, the level of experience needed, level of education required, etc. It also describes the
roles and responsibilities attached with the job position. The roles and responsibilities are key determinant
factor in estimating the level of experience, education, skill, etc required for the job. It also helps in
benchmarking the performance standards.
Job Worth
Job Worth refers to estimating the job worthiness i.e. how much the job contributes to the organization. It
is also known as job evaluation. Job description is used to analyze the job worthiness. It is also known as
job evaluation. Roles and responsibilities helps in determining the outcome from the job profile. Once it
is determined that how much the job is worth, it becomes easy to define the compensation strategy for the
position.
The analysis of the above factors leads to:
 Increased productivity of the employee and organization as a whole

 Higher job satisfaction
 Effective and transparent wage system
 Right person for the right job
 Planning and optimizing internal process

Job Evaluation

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Job Evaluation

Various methods of Job Evaluation

 Factor Comparison Method

Importance of Job Evaluation

The analysis of the above factors leads to:

 Increased productivity of the employee and organization as a whole

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