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Performance appraisal must convey to employees how well they
have performed on established goals. It¶s also desirable to have these
goals and performance measures mutually se between the employees and
supervisor. Without proper two-way feedback about one¶s affords and it¶s
effect on performance we run the risk of decreasing an employee¶s
motivation. However, equally important to feed back Is the issues
development. By development, we are referring to those areas in which
employees has a deficiency or weakness, or an area that simply could be
better if some effort was expended to enhance performance.

^
 suppose a college professor demonstrates extensive

knowledge in his or her field and conveys this knowledge to student in an
adequate way. Although this individual¶s performance may be regarded as
satisfactory, his or her peers may indicate that some improvement could be
made. In this case, then development may include exposure to different
method teaching , such as bringing into the classroom more experiential.
Real-world applications, internet applications case analyses and so forth.

Finally comes the issues of documentation. A performance evolution

system would be remiss if it did not concern itself with the legal aspect of
employee performance. Those jobs related measures must be performance
supported when and HRM decision to terminate an employee. Although the
supervisor cities performance matters as the reason for the discharge, a
review of recent performance appraisal of this employee indicate that
performance was emulated as satisfactory for the last two review periods.

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Accordingly, unless this employee¶s performance significantly decreased,

personnel record does not support the supervisor¶s decision. This critique
by HRM is absolutely critical-to ensure that employees are fairly treated
and that the organizational ³protected´.

Because documentation issues are prevalent in today¶s organization,

HRM must make the effort to ensure that the evaluation systems used
support the legal needs of the organization. However, even though the
performance appraisal process is greeted to serve the organization, we
should also recognize two other important players in the process:
employees and their appraisers. Though timely and accurate feedback and
development we can better serve employee needs. In doing so, we may
also be in a better position to show the effort-performance linkage.

Next we should keep in mind the needs of the appraiser. If feedback,

development and documentation are to faction effectively, appraisers must
have a performance system that is appropriate for their needs- a system
that facilities giving feedback and development information to their
employees, and one that allows for employees input.mm

^
 if appraisers are required to evaluate their employees

using inappropriate measures , or answer question about employees that
have little bearing on the job, then the system may no provide the same
benefit as one where such negative are removed. In contras to evolutions
used decades ago, it¶s acceptable, and absolutely necessary, for the
evolution criteria used to be different foe same jobs. Tailoring the evolution
process to the job analysis and the evaluation system that is satisfactory
and one that is an integral part of the HRM process. m

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To create the performance management system we desire, however,

we must recognize that difficulty in the process may exist. We must luck for
ways to either overcome this difficulty or deal with them more effectively.
Let¶s turn our attention to these challenges.

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m m m ³Performance appraisal means systematic evaluation
of the personality and performance of each employee by his
supervisor or some other person trained in the techniques of merit
rating.´

m m Performance appraisal, employee appraisal, performance

review, or (career) development discussion is a method by which the
job performance of an employee is evaluated (generally in terms of
quality, quantity, cost, and time) typically by the corresponding
manager or supervisor. A performance appraisal is a part of guiding
and managing career development. It is the process of obtaining,
analyzing, and recording information about the relative worth of an
employee to the organization. Performance appraisal is an analysis of
an employee's recent successes and failures, personal strengths and
weaknesses, and suitability for promotion or further training. It is also
the judgement of an employee's performance in a job based on
considerations other than productivity alone.m

m

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The performance appraisal process is a process that evaluates

employee performance. Normally it compares quality, quantity, cost,
and time. Some of the things that performance appraisal are used to
do would be.

[ Give something tangible to the employee regarding their work

performance.
[ Shows what training employees need.
[ Determines what the employees raise might be.

There are some other things that performance appraisals do, these
are just some of them. There are some procedures that you should put
in work at your work place. This will help the employees know what you
are expecting of them, and also establish a standard within your work
that everyone will be able to understand and follow.

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The first step in the process of performance appraisal is the
setting up of the standards which will be used to as the base to
compare the actual performance of the employees. This step requires
setting the criteria to judge the performance of the employees as
successful or unsuccessful and the degrees of their contribution to the
organizational goals and objectives. The standards set should be clear,
m

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easily understandable and in measurable terms. In case the

performance of the employee cannot be measured, great care should
be taken to describe the standards.

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 •

Once set, it is the responsibility of the management to communicate the

standards to all the employees of the organization. The employees
should be informed and the standards should be clearly explained to
the. This will help them to understand their roles and to know what
exactly is expected from them. The standards should also be
communicated to the appraisers or the evaluators and if required, the
standards can also be modified at this stage itself according to the
relevant feedback from the employees or the evaluators.

›    m

m
The most difficult part of the Performance Appraisal process is
measuring the actual performance of the employees that is the work
done by the employees during the specified period of time. It is a
continuous process which involves monitoring the performance
throughout the year. This stage requires the careful selection of the
appropriate techniques of measurement, taking care that personal bias
does not affect the outcome of the process and providing assistance
rather than interfering in an employees work.

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The actual performance is compared with the desired or the
standard performance. The comparison tells the deviations in the
performance of the employees from the standards set. The result can
show the actual performance being more than the desired performance
or, the actual performance being less than the desired performance
depicting a negative deviation in the organizational performance. It
includes recalling, evaluating and analysis of data related to the
employees¶ performance.

mm   

The result of the appraisal is communicated and discussed with

the employees on one-to-one basis. The focus of this discussion is on
communication and listening. The results, the problems and the
possible solutions are discussed with the aim of problem solving and
reaching consensus. The feedback should be given with a positive
attitude as this can have an effect on the employees¶ future
performance. The purpose of the meeting should be to solve the
problems faced and motivate the employees to perform better.

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The last step of the process is to take decisions which can be
taken either to improve the performance of the employees, take the
m

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required corrective actions, or the related HR decisions like rewards,

promotions, demotions, transfers etc.

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m m The performance appraisal process and technique that we have
suggested present systems in which evaluator is free from personal
bases, prejudices, and idiosyncrasies.

It would be native to assume, however, that all evaluators

impartially interpret and standardize the criteria upon which their
employees will be appraised. This is particularly true of those jobs that
are not easily programmable and for which developing hard
performance standard is most difficult ± if not impossible, Such, jobs as
researcher, teacher, engineer and consultant. In the place of such
standard, we can expert appraisers to use non-performance or
subjective criteria against which to evaluate individual.

1. ©
m^m
m m Every evaluator has his or her own value system that acts as a
standard against which appraisal are made. Relative to the true or
actual performance an individual exhibits, some evaluators mark high,
while other mark low. The former is referred to as positive leniency
error, and the latter as negative leniency performance, giving the
individual a lower appraisal.

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^
 assume a situation where both jones and smith performing

the same job for a different supervisor, with absolutely identical job
performance. If jones¶s supervisor tends to err toward positive leniency
while Smith¶s supervisor errs toward negative leniency, we might be
confronted with two dramatically different evaluations.

m m m  mmm
m m The halo error or effect is a ³tendency to rate high or low on all
factors due to the impression of a high or low rating on low rating on
some specific factored.
^
mif an employee¶s tends to be conscientious and dependable,
we might become biased toward that individual to the extent that we will
rate him or her positively many desirable attribute.m
m m
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When evaluators rate other people in the same way that the
evaluators perception themselves, they are 

m . Based on
the perception that evaluators have of themselves, they project those
perceptions onto others.m
m
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m m m What are the consequences of the appraisal? If the
evaluator knows that a poor appraisal could significantly hurt the
employee¶s future-particularly opportunities for promotion or a salary
increase- the evaluator may be reluctant to give a realistic appraisal.
There is evidence that it is more difficult to obtain accurate appraisal
when important rewards depend on the result. m m

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m
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m m m It is possible that regardless of who the appraiser
evaluates and what traits are used, the pattern of evaluation remains
the same. It is also possible that the evaluator¶s ability to appraise
objectively and accurately has been impeded by a failure to use the
extremes of the scale. When this happens, we call the action central
tendency. Central tendency is´the reluctance to make extreme ratings;
the inability to distinguish between and among rates; a form of range
restriction.
^
mif a supervisor rates all employees as 3, on a scale of 1 to 5,
then no differentiation among the employees exists. Failure to rate
employees as 5, for those who deserve that rating, and as 1 , if the
case warrants it will only create problems, especially if this information
is used pays increase.mmm
m
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  m   m
m m mA middle manager in a large Georgia-based company could
not understand why he had been passed over for promotion. He had
seen his file and knew that his average rate in by supervisor was 88 .
given his knowledge that the appraisal system defined ³ outstanding
performance´ at 90 at above ,´good´ as 80 or above , ³average´ a 70 or
above, and ³inadequate performance´ as anything below 70, he was at
loss to understand why he had not been promoted ±considering his
near-outstanding performance Appraisal.
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mmm
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m m mIt is the unusual job where the definition of performance is
absolutely clear and direct measures are available for appraising the
incumbent. In many jobs it is difficult to get consensus on what is ³a
good job´, and it is even more difficult to get consensus on what criteria
will determine performance. For a salesperson the criteria are affected
by factors such as economic and action of competitors- factors outside
the salesperson¶s control. As a result, the appraisal is frequently made
by using substitutes for performance ±criteria that, it is believed, closely
approximate performance and act in its place.
^
mto find organization using criteria such as effort enthusiasm,
neatness, positive attitude, conscientiousness, promptness and
congenially as substitutes for performance.
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m When you consider that three constituencies coexist in this process-
employees appraisal and organizational-coordinating the need of each may
cause problems.

1. The focus on the individual,

2. The focus on the process.

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Do you remember the last time you received a graded test from
a professor and felt that something was marked in correct that wasn¶t
wrong, or that your answer was too harshly penalized? How did you feel
about that? Did you accept the score and leave it at that, or did you
question the instructor? Whenever performance evaluation is
administered, we run into the issue of having people seeing ³eye-to-
eye´ on the evaluation. Appraising individuals is probably one of the
more difficulty aspects of a supervisor¶s jobs.m
When that occurs, it may lead to a situation in which emotions
over come both parties. This is not the way for evaluations to be
handled. Accordingly, our first concern in the process is to remove the
emotion difficulty from the process. When emotion do not run high in
this meetings, employee satisfaction of the process increases, and
additionally, this satisfaction carries into future jobs activities, where
both the employee and supervisor have opportunities to have ongoing
feedback in an effort to fulfill job expectations.

 m    


Whenever performance evaluation are conducted, there is a
particular structure that must be follow this structure exists to facilitated
the documentation process often allows for some of a quantifiable
evaluation. Additionally, HRM polices often exist that dictate
performance outcome.
Because difficulties may arise, we should begin to develop our
performance appraisal process so that we can achieve maximum
benefit from it. This maximum benefit can be translated in to employee
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satisfaction with the process. Such satisfaction is achieved by creating

an understanding of the evaluation criteria used, permitting employee
participation in the process, and a allowing for development need to be
addressed. To begin doing so requires us to initially understand the
appraisal process.

m

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m
m
m The fact that evaluators frequently encounter problems with
performance appraisals should not lead us to throw up our hands
and give up on the concepts. There are things that can be done to
make performance appraisals more effective. In this section, we
offer some suggestions that can be considered individually or in
combination.

„ m3" # 

mm
m m As we have pointed output, the evidence favours behaviour-
based measures over that development around traits. Many traits
considered to be related to good performance many, in fact, little or no
performance relationship. Traits like loyalty, initiative, courage,
reliability, and self-expression are intuitively appealing as desirable
characteristics in employee. We know that there are employees who
rate high on these characteristics and poor performance. Our
conclusion is that traits like loyalty and initiative may be prized by
appraisers, but there is no evidence to support the notion that certain

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traits will be adequate synonyms for performance in a large cross

section of jobs.
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m m A major drawback to individual or absolute slandered is that
theym tend to be based by positive leniency; that is, evaluators lean
toward packing their subject into the high part of the ranking. On the
other hand, relative standards. When there is little actual variability

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among the subject. The obvious solution is to consider using appraisal

methods that combine both absolute and relative standards.
m^
 This dual method of appraisal incidentally has been
instituted at some universities to deal with the problems of grade
inflation. Student gets an absolute grade A-B-C-D or F-and next to it is
relative showing how this student ranked in the class. A prospective
employer or graduated student admission committee can look at two
student who each got B in their international finance course and draw
considerably different conclusions about each when next to one grade it
say ³ ranked 4th out of 33´ while other says ³ ranked 17th out of 21 ³
clearly the latter instructor gave a lot more high grades.
m
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! m m
m m Several years back, a nationwide motel chain advertised, ¶¶The
best surprise is no surprise.¶¶ This phrase clearly applies to performance
appraisals. Employees like to know how they are doing. The ¶¶annul
review µwhere the appraiser shares the employees¶ evaluation with
them, can become a problem. In some shares the employees merely
because appraisal is negative. This creates an extremely trying
experience for both the evaluator and employee. m
m
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m m
mm
m m m As the number of ratters increases, the probability of
attaining more accurate information increases. If ratter error tends to
follow a normal curve, an increase in the number of ratters will tend to
find the majority clustering about the middle. If a parson has had 10
supervisors, nine of whom rated him or her excellent and one poor, thenm

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m m It has been suggested that appraisers should rate only in those
area in which they have signification job knowledge. If ratters make
evaluations on only those dimensions for which they are in good
position to rate, we can interest the inter-ratter agreement and make the
evaluation a more valid process.m
The specific application of this concept result in having immediate
supervisors or coworkers as the major input into the appraisal and
having them evaluate those factors that they are best qualified to judge.
^
 it has been suggested that when professors are evaluating
secretaries within a university, they use such criteria as judgement,
technical competence and conscientiousness, where peers use such
criteria as job knowledge, organization, and corporation with coworkers,
and responsibility. Such an approach appears both logical and more
reliable, since people are appraising only that dimension of which they
are in a good position to make judgment.
m
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m m If you cannot find good ratters the alternative is to make good
ratters. Evidence indicates that the training of appraisers can make
them more ratters. Common errors such as halo and leniency can be
minimized or eliminated in workshops where supervisors can practice
observing and rating behaviour. Why should we bother to train these
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m

individual? Because a poor appraisal is worse than no appraisal at all.

These negative effects can manifest themselves as demoralizing
employees, decreasing, productivity, and making the company.´ Liable
for wrongful termination damages. m
mm

m
½
^"  
m For fixing compensation to different jobs, it is essential that there is
internal equity and consistency among different job holders. Job evaluation
aims to provide this equity and consistency by refinancing the relative worth
of different jobs in an organization. Job evaluation is the process of
determining the relative worth of different categories of jobs by analyzing
their responsibilities and consequently, fixation of their remuneration.
International labour Organization has defined job evaluation as follows:

The I.L.O. defines job evaluation as ¡§an attempt to determine and

compare demands which the normal performance of a particular job makes
on normal workers without taking into accounts the individual abilities or
performance of the workers concerned.¨

The definition of job evaluation provided by ILO has been adopted by

others. For example, According to Wendell French has defined job
evaluation as follows:

³Job evaluation is a process of determining the relative worth of the

various jobs within the organization, so that differential wages may be paid
to jobs of different worth. The relative worth of a job means relative value
produced. The variables which are assumed to be related to value

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produced are such factors as responsibilities, skills, efforts and working

conditions.¨

The Bureau of Labour Statistics, U.S.A., says that ³job evaluation is

the evaluation or rating of jobs to determine. Their position in the job
hierarchy. The evaluation may be achieved through the assignment of
points or the use of some other systematic method for essential job
requirements, such as skills, experience and responsibility.¨

In the words of the Netherlands Committee of Experts on Job

Evaluation, ³job evaluation is a method which helps to establish a justified
rank order of jobs as a whole being a foundation for the setting of wages.
Job evaluation is the only one of the starting reestablishing the relative
differentiation of base wage rates.¨

  ½
^"  !

m m

m Organizations usually begin the process of designing a wave

structure by determining their job structure. Two often-cited principles of
compensation are

(1) Equal pay for equal work and

(2) More pay for more important work. Both imply that organizations pay
employees for contributions required by jobs.

Most organizations utilize job assignment as a major determinant of

employee contributions. A formal wage structure, defined as a rate or range
of rates established for job classifications, seems to be standard
organization practice, except in very small organizations. Formal job
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evaluation or informal comparison of job content is the almost universal

base of pay rates.

Job evaluation is concerned with jobs, not people. A job is a grouping

of work tasks. It is an arbitrary concept requiring careful definition in the
organization. Job evaluation determines the relative position of the job in
the organization hierarchy. It is assumed that as long as job content
remains unchanged, it may be performed by individuals of varying ability
and proficiency.

g
$" ½
^"  

m The basic objective of job evaluation is to determine the relative

contribution that the performance of different job makes towards the
realization of organizational objectives. The basic objective of job
evaluation serves a number of purposes which may be grouped into three
categories: wage and salary fixation, restructing job hierarchy and
overcoming anomalies.

„ m 
m
m



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:
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 worth of a job in terms of its contributions to the achievement of
organizational effectiveness. From equity point of view, this method is
more appropriate.

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:
Job evaluation helps in restructuring job hierarchy. Job hierarchy
refers to arranging various types of jobs in the order of their importance
either on ascending basis or descending basis. Sometimes, job
hierarchy becomes too lengthy creating administrative problem 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. For example, successive Pay Commissions appointed by
Government of India have recommended reduction in number of pay
scales by merging two or more scales into one in order to reduce their
number in job hierarchy.

› m  m

:
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 skills, efforts and responsibility;
[ Paying beginners less than that they are entitled to receive in
terms of what is required of them;

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[ 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.

½
^"   

Sometimes, a misplaced perception arises in which a job evaluation

is equated with performance appraisal. This happens because of the
contribution of both in wage/salary determination. However, both
are quite different concepts, use different methods and have
different objectives as shown below:

½m^

 
 m




It evaluates the job and not the job It evaluates the job holder on the
holder. basis of his job performance.

The job is evaluated before the job Evaluation is done after the
holder is appointed to perform the employee has performed the job.
job
Once the job evaluation is done, it is Appraisal is a continuous process
applicable over a number of years. and is undertaken every year.

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Evaluation is done by a committee Appraisal is done by the

consisting of specialists in a relevant concerned superiors and other
area persons who know about the
employees concerned.

Job evaluation is not adopted by all Appraisal is undertaken by all

organizations, even the large ones. organizations on regular basis,
They may follow the generally either formally or informally.
accepted prevailing practices.

m   ½
^"  

Job evaluation is a process consisting of several steps. National Institute of
Personnel management has prescribed the following steps in Job
evaluation process:

1. Analyze and prepare job description,

2. Select and prepare a job evaluation plan,

3. Classify jobs into different categories,

4. Install the job evaluation programme, and

5. Maintain the programme.

[  mmm

m

„ m½m


m
Job evaluation process starts with the base provided by job analysis.
Job analysis identifies various dimensions of a job in two forms: Job
Description and Job Specification. Job description provides
responsibilities involved in the performance of the job while job

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specification provides attributes required in the job performer. Both

these taken together provide information about various factors involved
in different jobs.

2.
  mm mmm^



As we know that job evaluation is a specialized function and is carried

on by a committee consisting of members drawn from different line
departments of the organization, outside experts, besides HR
personnel. HR person generally acts as committee convener or
chairman of the committee. The committee should include several
people who are familiar with the jobs in question, each of whom may
have different perspective regarding the nature of the jobs. And also if
the committee is composed at least partly of employees, the committee
approach can ensure greater employee acceptance of the job
evaluation results. An evaluation committee performs three important
functions: it identifies key jobs, it selects compensable factors and it
actually evaluates the worth of each job.
m
› m 
mm½m

m
m
mSince members of the job evaluation committee are drawn from
different fields, they should be provided brief training for job evaluation.
Armstrong observes that the training should be given through a series of
meetings in which the following issues are generally discussed and
doubts cleared
a. What is job evaluation?
b. Why does this company need job evaluation?

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c. How will it work?

d. How does it affect promotion policy?
e. How will the system be kept up to date?
f. Does job evaluation mean that everyone whose job is in the same
grade gets the same rate of pay?
g. How does the publication of job grades and salary bands affect
confidentially?
h. How does the system cater to additions or alterations in jobs?
I. What happens if an individual disagrees with his grading?
j. How quickly will appeals on grading be dealt with?
k. How will the company go about grading new jobs created as the
result of change or expansion?

" m m  
mmm

m

m
mm m ^valuation of a job or any other element, within or without
organisational context, is always comparative and for comparison,
some evaluative criteria must exist. For job evaluation, defining of
criteria involves two aspects. umthere should be identification
of critical factors involved in a job which must be evaluated. These
factors are 
mm
m mOthers factors which are
relevant for considerations are working conditions, difficulty
subordinates to be supervised etc. • mafter identifying various
factors, criteria in respect of these have to be fixed. For fixing
criteria some benchmarks has to be established either by taking
various jobs within the organisation or the benchmark being used by
the industry sector.

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m

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m

m
mAfter fixing the criteria, the next step is the determination of methods
through which various criteria can be applied in job evaluation. There
are both quantitative and qualitative methods which can be used. Since
a particular method emphases on some specific aspects and is
completed in itself, usually a combination of different methods has to be
followed.
 m ½m

m

Based on the results obtained by different methods used for

evaluating different factors in the job or the evaluation of the whole job
as such, various jobs are classified into different grades. This
classification may produce a large number of jobs, e.g. class three
clerks, class two clerks, etc., senior clerk and so on. These numbers are
merged into one to have a grade. From wage and salary administration
point of view there may be internal classification of a grade. The job
classification is used to build the hierarchy which shows the relative
worth of different jobs within the orgainsation. A job at a higher level of
hierarchy is more worthwhile as compared to that at the lower level.
Wages and salaries are fixed according to this ordering.

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There are four basic methods of job evaluation:
1. Ranking method
2. Job grading method
3. Point method
4. Factor compensation method

Out of these first two are non-quantitative and also known as

traditional, non analytical or summary methods. The last two are
quantitative techniques in evaluating a job.
The basic difference between quantitative and qualitative methods is
in terms of
1. Consideration of the job as a whole versus consideration of different
components of a job.
2. Judging and comparing jobs with each other versus assigning
numerical scores on rating scale.

Usually in practice, a combination of different methods is followed.

Based on this concept some other methods have also been
developed.

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In the ranking method, a whole job is compared with others and rank
is provided on the basis of this comparison. There are several steps
in job ranking method:

1. 
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 Job analysis is the first step: job description

for each job is prepared and the information they contain about the
job¶s duties is usually the basis for ranking jobs.

2.
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ranking for all jobs in an organisation. The usual procedure is to rank
jobs by department or in clusters (such as factory workers or clerical
workers). This eliminates the need for direct comparison of, say,
factory jobs and clerical jobs.

3.
 m 
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: In a ranking method it is common to

use just one factor (such as job difficulty) and to rank jobs based on
the whole job. Regardless of the number of factors you choose, it is
advisable to explain the definition of the factor(s) to the evaluator
carefully so that they evaluate the job consistently.

4. 
m For example, give each rater a set of index cards, each of
which contains a brief description of the job. Then they rank these
cards from the lowest to the highest. Some managers use ³alteration
ranking method´ for making the procedure more accurate. After
ranking, it is possible to slot additional jobs between those already
ranked and to assign an appropriate wage rate.
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 Usually several raters rank the job independently.

Then the ranking committee simply averages the rankings.

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Ranking method has certain facial merits. Some of these merits are
as follows:
1. The method is comparatively simple, easy understandable, and
mostly acceptable by labour unions. It is suitable for comparatively
smaller organizations which may not like to undertake more
labourious exercises.
2. The method is less costly to undertake and maintain as compare to
other systems.

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m Since ranking methods of job evaluation is qualitative and non-
analytical, it suffers from the following limitations:
1. Ranking method is judgmental and therefore, it is affected by
personal preferences of job evaluators.
2. This method ranks various jobs in order of their relative worth. It does
not specify the real difference between two jobs. For example, the
exact difference between job ranked at first and the job ranked at
second cannot be specified.

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Job grading method is also known as Job Classification method
establishes various grades for different categories of jobs. For example,

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jobs of an operative may be classified as unskilled, semi skilled, skilled

and highly skilled. The process followed in this method is as under:

1. At the initial stage, a number of job classes or grades are decided on

the basis of job analysis. Job grades can be determined on either of
two bases. First, all jobs may be first be ranked and their natural
classes may be determined. The description of each job class is
prepared covering all jobs falling in a class. Second, the job
evaluation committee is prepared a series of job class description in
advance on the basis of which various jobs may be graded.
2. Different characteristics of each job are matched with description of
job class and a job is placed in the class with which it matches best.

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Grading system of job evaluation particularly in government jobs
is quite popular as this has certain merits over the ranking method.
These are as follows:

1. The job classification method is less subjective when compared to the

earlier ranking method.
2. The system is very easy to understand and acceptable to almost all
employees without hesitation.
3. One strong point in favor of the method is that it takes into account all
the factors that a job comprises.
4. This system can be effectively used for a variety of jobs.

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The weaknesses of the job classification method are:
1. Even when the requirements of different jobs differ, they may be
combined into a single category, depending on the status a job
carries.
2. It is difficult to write all-inclusive descriptions of a grade.
3. The method oversimplifies sharp differences between different jobs
and different grades.

When individual job descriptions and grade descriptions do not

match well, the evaluators have the tendency to classify the job using
their subjective judgments.

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Following is a brief description of such a classification in an office.

1. r
  - Executives: Further classification under this category may

be Office manager, Deputy Office manager, Office superintendent,
Departmental supervisor, etc.

2. r
  - Skilled workers: Under this category may come the

Purchasing assistant, Cashier, Receipts clerk, etc.

3. r
 - Semiskilled workers: Under this category may come Steno

typists, Machine-operators, Switchboard operators, etc.

4. r
  - Semiskilled workers: This category comprises Daftaris,

File clerks, Office boys, etc.
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This method is widely used currently. 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.

The most frequent factors employed in point systems are:

1.
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 Education and training required, Breadth/depth of
experience required, Social skills required, Problem-solving skills,
Degree of discretion/use of judgment, Creative thinking;

2. 



 Breadth of responsibility, specialized
responsibility, Complexity of the work, Degree of freedom to act,
Number and nature of subordinate staff, Extent of accountability for
equipment/plant, Extent of accountability for product/materials;

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3. ^  Mental demands of a job, Physical demands of a job, Degree

of potential stress.

The educational requirements (sub factor) under the skill (key factor)
may be expressed thus in the order of importance.

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1. Able to carry out simple calculations; High School educated

2. Does all the clerical operations; computer literate; graduate
3 Handles mail, develops contacts, takes initiative and does work
independently; post graduate.

Assign point values to degrees after fixing a relative value for each
key factor.
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Skillm 10 20 30 40 50 150
Physical effortm 8 16 24 32 40 120
Mental effortm 5 10 15 20 25 75
Responsibilitym 7 14 21 28 35 105
Working 6 12 18 24 30 90
conditions
Total 540

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Maximum total points of all factors depending on their importance to

job = 540

4. Find the maximum number of points assigned to each job (after

adding up the point values of all sub-factors of such a job). This
would help in finding the relative worth of a job. For instance, the
maximum points assigned to an officer¶s job in a bank come to 540.
The manager¶s job, after adding up key factors + sub factors¶ points,
may be getting a point value of, say 650 from the job evaluation
committee. This job is now priced at a higher level.

5. Once the worth of a job in terms of total points is expressed, the

points are converted into money values keeping in view the
hourly/daily wage rates. A wage survey, usually, is undertaken to
collect wage rates of certain key jobs in the organization.

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The point method is a superior and widely used method of evaluating
jobs. It forces raters to look into all keys factors and sub-factors of a
job. Point values are assigned to all factors in a systematic way,
eliminating bias at every stage. It is reliable because raters using
similar criteria would get more or less similar answers. ³The
methodology underlying the approach contributes to a minimum of rating
error´ (Robbins, p.361). It accounts for differences in wage rates for
various jobs on the strength of job factors. Jobs may change over time,
but the rating scales established under the point method remain
unaffected.
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On the negative side, the point method is complex. Preparing a
manual for various jobs, fixing values for key and sub-factors,
establishing wage rates for different grades, etc., is a time consuming
process. According to Decenzo and Robbins, ³the key criteria must be
carefully and clearly identified, degrees of factors have to be agreed
upon in terms that mean the same to all rates, the weight of each
criterion has to be established and point values must be assigned to
degrees´. This may be too taxing, especially while evaluating managerial
jobs where the nature of work.

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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

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assigned to the job in comparison to its ranking on each job factor. The
steps involved in factor comparison method may be briefly stated thus:

1. Select key jobs (say 15 to 20), representing wage/salary levels

across the organization. The selected jobs must represent as many
departments as possible.
2. Find the factors in terms of which the jobs are evaluated (such as
skill, mental effort, responsibility, physical effort, working conditions,
etc.).
3. Rank the selected jobs under each factor (by each and every
member of the job evaluation committee) independently.
4. Assign money value to each factor and determine the wage rates for
each key job.
5. The wage rate for a job is apportioned along the identified factors.
6. All other jobs are compared with the list of key jobs and wage rates
are determined.

An example of how the factor comparison method works is given

below:


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Merits  m

Analytical and objective. Difficult to understand, explain

and operate.

Reliable and valid as each job is Its use of the same criteria to
compared with all other jobs in assess all jobs is questionable as

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terms of key factors. jobs differ across and within

organizations.

Money values are assigned in a fair Time consuming and costly.

way based on an agreed rank order
fixed by the job evaluation
committee.

Flexible as there is no upper

limitation on the rating of a factor.

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