Chapter 9

Definition of Job Evaluation

Job evaluation is the systematic process of determining the relative value of different jobs in an
organization. The goal of job evaluation is to compare jobs with each other in order to create a
pay structure that is fair, equitable, and consistent for everyone. It tries to make a systematic
comparison between jobs to assess their relative worth for the purpose of establishing a rational
pay structure.
It is an attempt to assess and compare the demands which the normal performance of a particular
job makes on normal workers without taking into account the individual abilities or performance
of the workers concerned. Individual abilities or efforts are reflected in the workers’ earnings,
but this is something entirely different from the ratings of the job. Job evaluation rates the job,
not the man.
It is a complex of job analysis, the study of jobs, job description, the statements of the results of
the analysis upon which follows job grading, the placing of jobs in a sequence or ranking which
is the basis of job assessment and the establishment of fair play based on job grading.
There are two essential features or characteristics of job evaluation.
First, the focus of job evaluation is upon the job itself, its content or its demands upon the normal
average or standard worker performing it rather than upon the person doing it and what he/she
may choose to put into it.
Second, the reliance of job evaluation is upon the exercise of human judgment as the method by
which ranking of relative work or value of the different jobs in the family or population is
arrived at. Together, these distinguish job evaluation as a category of wages and salary
determination.
Job evaluation may be defined as the process of determining the demands in terms of efforts and
abilities which the normal performance of a job makes on normal workers. The demand made on
the workers by a particular job is the worth of that job. Job evaluation rates the job and not the
job-holder.
It takes into account the demands of the job in terms of efforts and abilities, but it does not take
into account the individual abilities and efforts, which may of course be taken into consideration
and reflected in the worker’s earnings under a system of payment by results or of merit rating or
performance appraisal.
 Job Evaluation Process
Job evaluation is the rating of jobs in an organization. Job evaluation explains the duties of a job,
authority relationships, skills required conditions of work, and additional relevant information
and uses the information in job analysis to evaluate each job- valuing its components and
ascertaining relative job worth.
The job evaluation process begins with defining objectives of evaluation and finishes with
establishing wage and salary differentials. The main objective of job evaluation is to establish
satisfactory wage and salary differentials. Job analysis should precede the actual program of
evaluation.
 Job evaluation involves five steps:
i. Preparation of job description;
ii. Selection and Preparation of a job evaluation plan;
iii. Manual evaluation and classification of the jobs
iv. Installation of the Job Evaluation Program
v. Maintenance of the program
1. Preparation of Job Description:
Job description relates to a written record of the duties, responsibilities and conditions of the job
to be prepared by a trained, qualified individual with a view to providing the rater or evaluating
committee with all significant information regarding the job under review.
An effective procedure for preparing job description involves the following steps:
(i) Preparation of a list of all jobs under purview;
(ii) Initial announcement of the program to all individuals concerned;
(iii) Discussion with the departmental head and immediate supervisor;
(iv) Interview with the job occupants;
(v) Tentative preparation of a written job description;
(vi) Review discussions with departmental heads and supervisors to ensure full coverage of
relevant information;
(vii) Preparation of the final job descriptions with the approval of the plant manager.
2. Selection and Preparation of a Job Evaluation Plan:
At the time of selecting a job evaluation plan, effort should be done at the beginning to determine
as to whether to use a quantitative or qualitative type of evaluation.
The quantitative evaluation plan necessitate that jobs are broken into elements and include factor
comparison method and point method. The qualitative systems necessitate comparison of the job
as a whole with other jobs and include ranking method and grading method. Then it is necessary
to prepare a job evaluation manual which provides consistency in wage and salary
administration.
The preparation of a manual for a quantitative system is highly complex and requires enough
care. The preparation of job evaluation manual for qualitative system requires outlining the
methods to be used indicating detailed instructions about grade definition, procedure for
selection of key jobs, and classification of rated or graded jobs and a period review of the
program.
The job evaluation manual should contain procedure to update and review the program in view
of changing job situations Jobs that have experienced change should be re-evaluated in terms of
factors which have changed.
3. Manual Evaluation and Classification of the Jobs:
As a next step, a committee consisting of management and union representatives should evaluate
and classify the jobs. Evaluation meetings should be held to review the manual factor by factor
and determine the numbers jobs to be evaluated during the evaluation session. Effort should be
made to evaluate all jobs for the same factor before moving to the next factor stressing the factor
and its relationship to the job.
Each committee member should evaluate each factor privately, and thereafter the values assigned
should be compared and differences should be removed by discussions. After the completion of
the evaluation session total points for all jobs should be completed. Generally, the total evaluated
points for different jobs are indicated on a chart divided in terms of department, section or plant.
After that, the number of wage classifications ranging from nine to 14 and the difference
between the minimum and maximum point value for different job under review are determined.
Then, job classification is obtained by assigning the same range for each job category, assigning
increasing ranges to each job category and assigning values by observing the chart visually
irrespective of job titles. After the classification is over, review of each job and its relation to
other jobs in the same group is done.
4. Installation of the Job Evaluation Program:
At the time of installing the job evaluation program, it is necessary to convince the employees of
the impartiality of the job evaluation principles and inform them about the program adequately.
It should also be recognized that job evaluation is not a remedy for all wage problems. Care
should also be taken to ensure that no employee suffers loss of wages because of the program.
5. Maintenance of the Program:
Proper operation and maintenance of a job evaluation program requires periodic review and
adjust changes. Clearly, job evaluation programs are likely to fail in view of changed job
situations. This requires that a permanent job evaluation committee is established to review
annually all job descriptions, conduct quarterly meetings to review old jobs as well as newly
created job. Indeed, even the most technically 100 percent plan cannot survive if proper care is
not taken to maintain it.

Methods of job evaluation

In the point method (also called point factor) of job evaluation, the organization identifies the
compensable factors and breaks them down into degrees. The organization must also weight the
factors, determine the number of complexity levels or degrees for each factor, and assign points.
The result is that the evaluator assigns a numeric score to a job for each factor based on how
much of that factor appears in the job. The job's total worth is then determined by adding up the
numeric scores across all factors. This procedure, when conducted across all jobs, will result in a
relative ordering of jobs based on the number of points that each job earns. Although the point
method allows an organization to develop one job evaluation scheme for all jobs in the
organization, this is rarely done for several pragmatic reasons. First, it is difficult to identify one
set of compensable factors that is applicable for all jobs. For example, the use of working
conditions may distinguish among shop jobs, but there is not likely to be any variance among
office jobs on that compensable factor. Second, creating single definitions of factors in language
easily understood by all employees would be nearly impossible. Different operational definitions
would be needed for the same compensable factor for different clusters of jobs. Third, the fact
that different job groups are often anchored to different labor markets cannot be ignored. In an
equity sense, comparison with job families within an organization may be less relevant than
comparison with a job family in the relevant labor market. With point methods of job evaluation,
organizations usually have a series of job evaluation plans. For example, there may be one plan
for skilled shop jobs, another plan for unskilled assembly work, and still a third plan for office
and clerical. The point method carnival ate all jobs simultaneously, rather than limiting
evaluation to only key jobs. The steps for implementing the point method of job evaluation are
summarized: below:

Step 1: Select the job cluster and the jobs to be evaluated: This is the same as in other
methods of job evaluation.
Step 2 Input job information: AS with all job evaluation approaches, the jobs must be analyzed
and job descriptions/specifications prepared.
Step 3 Select compensable factors: Just as with other methods or other job evaluation methods,
the point method generally uses a set of factors that has been developed by others. It has long
been accepted that three to five factors are sufficient to capture a desired criterion structure.
Additional factors may be merely redundant and do not explain unique variation in the job
structure However, it is also important to remember that job evaluation plans are rationalizations
for job relationships and the pay structure. The job evaluation committee should select those
factors that are viewed within the organization as most important in rewarding work and
distinguishing among jobs.
Step 4 Define compensable factors: In this step, once factors are chosen, the committee must
clearly define what each factor will mean in the context of the job evaluation plan. The more
specific a factor is, the narrower the definition tends to be, and frequently, the easier the factor is
to use. One of the important criteria in determining whether factors are broadly or narrowly
defined is related to the types of jobs covered. If the jobs are from a narrow job cluster, the factor
might be correspondingly narrow.
Step 5 Define factor degrees: The committee must decide how many degrees should be on the
scale for a given factor or sub factor. There should be adequate degrees to make meaningful
distinctions among jobs. If there are too many degrees, the distinctions may be meaningless.
Also, if no job falls within the degree, the steps are probably too narrowly defined. one method
of defining factor degrees. All factors or sub factors do not have to use the same number of
degrees.
Step 6 Determine total points in plan: The process for assigning point values to factors begins
with a decision as to how many total points the job evaluation plan will have. There is no magic
number of points that a plan should have. A general rule is to have enough total points in the plan
to differentiate adequately among the jobs to be evaluated. Under normal conditions, there
should be enough points to adequately distinguish among the jobs in the organization.
Step 7 Assign points to degree within factors or sub factors: once the total number of points
and the weight of a factor or sub factor are established, the next step is to assign points to the
degrees within the factors. Illustrates one procedure for assigning points to sub factor degrees.
First, the highest degree of a sub factor is assigned the maximum points for the sub factor.
STEP 8 Evaluate jobs: When key jobs are known, key jobs are evaluated first and then the
unique jobs are evaluated and fit between the key jobs. When key jobs are not known, each job is
evaluated using the newly designed point method and then the validity of job evaluation is
determined by whether the resulting job structure mirrors the pay structure ordering of key jobs
in the labor market. Key jobs are identified by comparing all job definitions within the
organization with the definitions of jobs in the survey.
Steps 9 write the job evaluation manual: The results of the committee's activities must be
written up in a job evaluation manual. Without a well-documented job evaluation plan, the plan
is not usable except by the original committee. Documentation of the committee's work should
include the rationale for the factors chosen, the rationale for weighting the factors, the rationale
and procedures for assigning points to factor degrees, and, finally, a description of the factors,
sub factors, and the degrees assigned to each.
 Pitfalls or problems of Job Evaluation
The major pitfalls or problems of job evaluation are as follows:
1. Lack of Complete Accuracy: The accuracy claimed by it is not in fact accurate. The system
considers the key factors independent of others which is not so in reality. Consequently, the
weights assigned to the factors are also less accurate. This is particularly so if the factors are of
highly technical in nature.
2. Unrealistic Assumptions: Job evaluation is based on the assumption that wage rates can be
related to the work of a given job. It completely ignores the fact that conditions in the labour
market exercise greater influence in the determination of wage rates.
3. Formation of the Committee: The formation of the job evaluation committee itself creates a
serious problem. Only persons who are capable of evaluating the jobs should be appointed as
committee members. Besides, there is also difference of opinion regarding the number of
members. Authorities suggest 5 to 20 members. All these factors make the installation of a job
evaluation program more costly.
4. Selection of a Suitable Method: The selection of a suitable method also processes a serious
problem to the management. There are four methods and each method has its own merits and
demerits.
5. Equal Pay for Equal Job: This system presumes that job of equal content will be equally
attractive to the employees. But this presumption is unreal. For instance, a job offers little or no
prospects for a rise or promotion; while another job rated similar to it, has better prospects for the
workers; the latter will attract more than the former. Under such circumstances, the business firm
has to pay more wages for the former job so as to make it more attractive.
6. Unsuitable for Small Concerns: Installing and operating a job evaluation program requires
much time and money. Hence, it is very difficult to introduce it in smaller concerns.
However, job evaluation has many processes and also cost minimizing, every organizations use
these as their first choice.