UNIT - 02

INTRODUCTION:
A Job evaluation is a systematic way of determining the value/worth of a job in relation to
other jobs in an organization. It tries to make a systematic comparison between jobs to assess
their relative worth for the purpose of establishing a rational pay structure.
Job evaluation needs to be differentiated from job analysis. Job analysis is a systematic way of
gathering information about a job. Every job evaluation method requires at least some basic job
analysis in order to provide factual information about the jobs concerned. Thus, job evaluation
begins with job analysis and ends at that point where the worth of a job is ascertained for
achieving pay equity between jobs and different roles.

Meaning of Job Evaluation:

Job evaluation is a structured way of measuring a specific job's value compared to other
positions within an organization. Job evaluation aims to create a framework to compare the value
of the various jobs so that there is some foundation to how wages are calculated for different
positions.

Definitions of Job Evaluation by different authors:

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 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.”

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
Edwin B. Flippo defines. “Job Evaluation is a systematic and orderly process of determining

the worth of a job in relation to other jobs.”

According to Scott, Clothier and Spriegel, “Job Evaluation or job rating is the operation

of evaluating a particular job in relation to other jobs either within or outside the organization.”

Major decisions in Job Evaluation:

For many people, salary is the primary consideration when evaluating a job. In addition to your
compensation, there are a host of other factors that can determine whether or not a job is right for
you in the short term or will have an impact on your long-term career path. Considering the
common aspects of jobs that will affect you if you take a position will help prevent you from
making a hasty decision and taking the wrong job.

Pay
The most obvious factor when analyzing a job is the salary or wages. In addition to the base pay,
you might be eligible for a bonus or commission. If you are an independent contractor, you will
pay higher payroll taxes than if you are an employee. Some companies offer an annual cost-of-
living raise, while others have set wages for specific positions.

Benefits
The benefits an employer offers can often make two jobs with similar pay much different. An
employer who offers health insurance, a 401(k) match or a flexible spending account can save
you thousands of dollars annually in expenses and taxes, with the 401(k) match adding
significant dollars to your pay.

Advancement
The smaller the company, the more entrenched the people ahead of you might be. On the flip
side, you will have less competition for better positions if you work at a small company. Analyze
where you realistically have the opportunity to go with any company, in terms of your position
and pay.

Security
A glamorous job with an ATTRACTIVE, pre-IPO Internet company might include great perks

and stock options, but business stories abound about employees left holding the bag when the

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Assistant Professor
Department Of Management
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company didn’t fulfill its potential. Even large, established businesses can crash if the market

changes. For example, companies such as Dell and Hewlett-Packard have had to scramble to deal

with the fact that consumers are moving away from PCs to mobile apps and tablet use. Consider

multiple scenarios that can happen to a potential employer and how likely they are to happen.

Resume Building
Working for less money or at a lower-level position might not be a bad choice if you can get
valuable experience and a recognizable name on your resume. Determine if a particular position
will make you more marketable in one or two years when you look at its value.

Commute
Your daily commute can make a dream job seem like a nightmare, depending on where you live.
Some longer commutes might not be that bad if they are high-speed, straight shots from home to
work. Shorter commutes in bumper-to-bumper traffic can stress you out each morning and have
you come home cranky each night. Calculate the hours you’ll spend in traffic each week and
your gasoline costs to factor in an important quality of life issue connected to any job.

Opportunity Cost
Any time you take a job, you give up the opportunity to do something else. Look at what you’re
sacrificing when you take a job to determine if it’s worth it. Opportunity costs include such
things as pay, benefits, free time, and advancement opportunities, skill-building and resume
enhancement.

Job Evaluation Methods:

There are four basic methods of job evaluation currently in use which are grouped into two
categories:

1. Non-quantitative / Qualitative Methods:

(a) Ranking or Job Comparison

(b) Grading or Job Classification

2. Quantitative Methods:
Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
(a) Point Rating

(b) Factor Comparison

The basic difference between these two methods lies in the sense that, under non-quantitative

methods, a job is compared as a whole with other jobs in the organization, whereas in case of

quantitative methods, the key factors of a job are selected and, then, measured. The four methods

of job evaluation are now discussed one by one.

1. Non-quantitative / Qualitative Methods:

(a) Ranking or Job Comparison

(b) Grading or Job Classification

(a) Ranking or Job Comparison: The ranking method is the simplest form of job

evaluation. In this method, each job as a whole is compared with other and this

comparison of jobs goes on until all the jobs have been evaluated and ranked. All jobs are

ranked in the order of their importance from the simplest to the hardest or from the

highest to the lowest.

The importance of order of job is judged in terms of duties, responsibilities and demands on the

job holder. The jobs are ranked according to “the whole job” rather than a number of

compensable factors. The ranking of jobs in a University, based on Ranking Method, may be like

this:

Table 1.1: Ranking of University Jobs:

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Assistant Professor
Department Of Management
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Ranking Order Pay Scale

Professor/Registrar Rs. 16,40(M50-20,900-50022,400

Reader/Dy. Registrar Rs. 12,000-420-18,300

Lecturer/Asst. Registrar Rs. 8,000-275-13,500

The application of the Ranking Method involves the

following procedure:
1. Analyze and describe jobs, bringing out those aspects which are to be used for purpose of job
comparison.

2. Identify bench-mark jobs (10 to 20 jobs, which include all major departments and functions).

The jobs may be the most and least important jobs, a job midway between the two extremes, and

others at the higher or lower intermediate points.

3. Rank all jobs in the organization around the bench-mark jobs until all jobs are placed in their

rank order of importance.

4. Finally, divide all the ranked jobs into appropriate groups or classifications by considering the

common features of jobs such as similar duties, skills or training requirements. All the jobs

within a particular group or classification receive the same wage or range of rates.

Ranking method is appropriate for small-size organizations where jobs are simple and few. It is

also suitable for evaluating managerial jobs wherein job contents cannot be measured in

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
quantitative terms. Ranking method being simple one can be used in the initial stages of job

evaluation in an organization.

Merits:
Ranking method has the following merits:
1. It is the simplest method.

2. It is quite economical to put it into effect.

3. It is less time consuming and involves little paper work.

Demerits:
The method suffers from the following demerits:
1. The main demerit of the ranking method is that there are no definite standards of judgment
and also there is no way of measuring the differences between jobs.

2. It suffers from its sheer unmanageability when there are a large number of jobs.

(b) Grading Method:

Grading method is also known as ‘classification method’. This method of job evaluation was

made popular by the U.S. Civil Service Commission. Under this method, job grades or classes

are established by an authorized body or committee appointed for this purpose. A job grade is

defined as a group of different jobs of similar difficulty or requiring similar skills to perform

them. Job grades are determined on the basis of information derived from job analysis.

The grades or classes are created by identifying some common denominator such as skills,

knowledge and responsibilities. The example of job grades may include, depending on the type
of jobs the organization offers, skilled, unskilled, account clerk, clerk-cum-typist, steno typist,

office superintendent, laboratory assistant and so on.

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
Once the grades are established, each job is then placed into its appropriate grade or class

depending on how well its characteristics fit in a grade. In this way, a series of job grades is

created. Then, different wage/salary rate is fixed for each grade.

Demerits:
The method suffers from the following demerits:
1. The main demerit of the ranking method is that there are no definite standards of judgment

and also there is no way of measuring the differences between jobs.

1. This method is easy to understand and simple to operate.

2. It is economical and, therefore, suitable for small organizations.

3. The grouping of jobs into classifications makes pay determination problems easy to

administer.

4. This method is useful for Government jobs.

Demerits:
The demerits of this method include:
1. The method suffers from personal bias of the committee members.

2. It cannot deal with complex jobs which will not fit neatly into one grade.

3. This method is rarely used in an industry.

2. Quantitative Methods:
(a) Point Rating

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Assistant Professor
Department Of Management
AIGS
(b) Factor Comparison

Points Rating:
This is the most widely used method of job evaluation. Under this method, jobs are broke down

based on various identifiable factors such as skill, effort, training, knowledge, hazards,

responsibility, etc. Thereafter, points are allocated to each of these factors.

Weights are given to factors depending on their importance to perform the job. Points so

allocated to various factors of a job are then summed. Then, the jobs with similar total of points

are placed in similar pay grades. The sum of points gives an index of the relative significance of
the jobs that are rated.

The procedure involved in determining job points is as

follows:
Determine the jobs to be evaluated. Jobs should cover all the major occupational and levels of

responsibility to be covered by the method.

Decide on the factors to be used in analyzing and evaluating the jobs. The number of factors

needs to be restricted because too many factors result in an over-complex scheme with overlap

and duplication between factors.

Define the factors clearly in written. This is necessary to ensure that different job raters interpret

a particular factor in the same sense.

Determine degrees of each factor and assign point value to each degree.

Point values are assigned to different degrees on the basis of arithmetic progression.

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Assistant Professor
Department Of Management
AIGS
Finally, money values are assigned to points. For this purpose, points are added to give the total

value of a job. Its value is then translated into money terms with a predetermined formula.

Merits:
The method has the following merits:
1. It is the most comprehensive and accurate method of job evaluation.

2. Prejudice and human judgment are minimized, i.e. the system cannot be easily manipulated.

3. Being the systematic method, workers of the organization favors this method.

4. The scales developed in this method can be used for long time.

5. Jobs can be easily placed in distinct categories.

Demerits:
The drawbacks of the method are:
1. It is both time-consuming and expensive method.

2. It is difficult to understand for an average worker.

3.A lot of clerical work is involved in recording rating scales.

4. It is not suitable for managerial jobs wherein the work content is not measurable in quantita -

tive terms.

(b) Factor Comparison Method:

This method is a combination of both ranking and point methods in the sense that it rates jobs by

comparing them and makes analysis by breaking jobs into compensable factors. Factor

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
comparison is a process that human resources professionals use to evaluate and compare

different job candidates. By evaluating factors such as education, experience, skills, and
qualifications, human resources professionals can identify the best candidates for a given

position. This system is usually used to evaluate white collar, professional and managerial

positions.

The mechanism for evaluating jobs under this method

involves the following steps:
The factor comparison method involves the following steps :

1) Selecting bench-mark jobs;

2) Ranking bench-mark jobs by factors;

3) Allocating money values to factors; and

4) Ranking the other jobs, and wage fixing. Following is a specimen of base rate and its

allocation scheme:

5. The final step in factor comparison method is to compare and evaluate the remaining jobs in

the organisation. To illustrate, a ‘toolmaker’ job is to be evaluated. After comparison, it is found

that its skill is similar to electrician (5), mental requirements to welder (10) Physical

requirements to again electrician (12), working conditions to mechanist (24) and responsibility

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Assistant Professor
Department Of Management
AIGS
also to mechanist (3). Thus, the wage rate for the job of toolmaker will be Rs. 54 (Rs.5 + Rs. 10

+ Rs. 12 + Rs.24 + Rs.3).

Merits:
This method enjoys the following merits:
1. It is more objective method of job evaluation.

2. The method is flexible as there is no upper limit on the rating of a factor.

3. It is fairly easy method to explain to employees.

4. The use of limited number of factors (usually five) ensures less chances of overlapping and

over-weighting of factors.

5. It facilitates determining the relative worth of different jobs.

Demerits:
The method, however, suffers from the following
drawbacks:
1. It is expensive and time-consuming method.

2. Using the same five factors for evaluating jobs may not always be appropriate because jobs

differ across and within organisations.

3. It is difficult to understand and operate.

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
Now, all the four methods are summarised as follows:

Job Evaluation committee:

The role of the Job Evaluation Committee is to gain an understanding of the positions and to
evaluate positions in an impartial and objective manner.

Creating Job Evaluation Committee: It is not possible for a single person to evaluate all the key
jobs in an organization. Usually, a job evaluation committee consisting of experienced
employees, union representatives and HR experts is created to set the ball rolling.

Job Evaluation Rules

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Assistant Professor
Department Of Management
AIGS
It is not possible to measure scientifically the importance of the contribution of one job relative
to another. The evaluators in the Job Evaluation Committee have therefore to make
a judgement which is not wholly objective.

The ground rules for defining the job for evaluation purposes:
Evaluate the job not the job holder.

Evaluate the job by taking a view of the job as it would be done at fully acceptable performance.

Evaluate the job as it is defined now, not as it was or will be. Note that some jobs will be of new
design.

Evaluate the job without reference to its current grade or rate of pay.

No understanding equals no evaluation.

The objective of the Job Evaluation Committee is to produce an equitable and objective
evaluation of all positions presented to the Committee.

Duties & Responsibilities

The Committee is responsible for overseeing the job evaluation processes which is designed to
provide but not limited to:

Maintain a comprehensive knowledge of the selected job evaluation methodology

Ensure training is provided to key stakeholders on the job evaluation methodology

Maintain the confidentiality of information received and dealt with by the Committee

Oversight that an appropriate job evaluation processes and practices is in-place

Advising and oversight on any other matters related to job evaluation

Committee Members
The Committee Members are appointed by the company for a duration of one (1) year.
Head of HR - Chairman

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
Department Representatives - Committee Members

Committee Secretary

In fulfilling its responsibilities, the Committee will:

ensure it has sufficient information for informed decision-making;

ensure it receives regular reports from the company on recent or changes made to jobs and
related matters effecting job scope and weight;

obtain data from external sources periodically to ensure the company's job evaluation practices
are in line with market conditions; and

has authority, within the scope of its responsibilities, to seek any information it requires from any
party within the company.

Committee Meetings
The Committee will meet on a quarterly basis as communicated with reasonable prior notice by
the Committee Secretary. Additional meetings will be decided by the Committee Chairman
deemed necessary to fulfill their role or as circumstances dictate.

Any Committee Member may require business to be included in the agenda, provided the
Committee Secretary has been given reasonable prior notice of that business.

Committee Voting
The Committee Members will use its best endeavors to reach a unanimous decision on all job
evaluation matters it considers. If a unanimous decision is not achieved, the matter will be
decided by a majority of the voting of the members present.

The right to vote (1 vote per committee member) shall be exercised by each committee members
and will be counted & documented by the Committee Secretary. The vote will be taken by
“raising the right hand” for a job evaluated result.

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
If there are equal numbers of votes for and against, the Chairman will have a second or casting
vote. There will be no restriction on how the Chairman chooses to exercise a casting vote.

Agenda & Minutes of Meeting

Committee agendas for meetings will be set by the Committee Secretary in conjunction with the
Chairman.

Minutes of meetings of the Committee shall be prepared by the Committee Secretary, approved
by the Committee Chairman and circulated to all members of the Committee within seven (7)
business days from the meeting. The minutes of meetings will be retained in hard copy or soft
copy by the Committee Secretary

Committee Evaluation
The Committee Chairman will review the Committee’s Charter at least annually, make
amendments as and when required and publish to the Committee Members.

The Committee shall perform an annual self-assessment of its performance to determine whether
it is functioning effectively and meeting the requirements of its Charter.

What is factor evaluation system?

The Factor Evaluation System (FES) format covers a large majority of the positions in.
MCIPAC. The FES is the format used for most non-supervisory GS positions grades 1 through
15 – and can be used to describe the requirements for any non-supervisory position. It is a point-
based system with nine factors.

Drafting a Factor Evaluation System Format PD

The Factor Evaluation System (FES) format covers a large majority of the positions in

MCIPAC. The FES is the format used for most non-supervisory GS positions grades 1 through
15 – and can be used to describe the requirements for any non-supervisory position. It is a point-
based system with nine factors. An FES-format position description has three or four parts– an

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Assistant Professor
Department Of Management
AIGS
introduction, description of the major duties of the position, and addresses each of the following
nine factors.

I. Introduction – Identify the Command, Directorate, Office, Division, etc., the position’s
duty location; the position title; and the purpose of the position.

II. Major Duties Responsibilities – Describe the duties that occupy most of the
employee’s time and are the primary reason for the position’s existence.

III. Factors – Address the following nine factors.

Factor 1. Knowledge Required by the Position

 Kind or nature of knowledge and skills needed
 How the knowledge and skills are used in doing the work

Factor 2. Supervisory Controls

 How the work is assigned
 Employee's responsibility for carrying out the work
 How the work is reviewed

Factor 3. Guidelines
 Nature of guidelines for performing the work
 Judgment needed to apply the guidelines or develop new guidelines

Factor 4. Complexity
 Nature of the assignment
 Difficulty in identifying what needs to be done
 Difficulty and originality involved in performing the work

Factor 5. Scope and Effect

 Purpose of the work
 Impact of the work product or service

Factor 6. Personal Contacts

 People and conditions/setting under which contacts are made

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Assistant Professor
Department Of Management
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Factor 7. Purpose of Contacts
 Reasons for contacts in Factor 6

Factor 8. Physical Demands

 Nature, frequency, and intensity of physical activity

Factor 9. Work Environment

 Risk and discomforts caused by physical surroundings and the safety precautions
necessary to avoid accidents or discomfort.

IV. Other Signification Information – information in this section would include conditions of
employment, such as clearance, Emergency-Essential status, requirement to obtain a Status of
Forces Agreement driver’s license, and similar requirements. It may not be necessary for all
position descriptions.

Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS
Mrs. Manjula BK
Assistant Professor
Department Of Management
AIGS