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BITS Pilani

Pilani Campus

MMZC 441/MMVA ZC441


Human Resource
Management
Session 3

Date 17/08/2015

By : Jayashree Mahesh

BITS
Pilani
Pilani Campus

Chapter 4: Human resource Planning


Chapter 5 : Analysis of Work, Designing Jobs and Job Evaluation
Text Book : Aswathappa K., Human Resource Management- Text and Cases, Tata McGraw Hill, 7th
Edition, 2013.

BITS
Pilani
Pilani Campus

Chapter 4: Human resource Planning

Chapter 4 -Learning Objectives


Understand the nature and importance of HRP
Identify and describe factors affecting HRP
Describe the stages in HRP process
List pre-requisites for effective HRP

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Human Resource Planning


Human resource planning is the process by which an organization ensures that it
has the right number and kind of people, at the right places, at the right time,
capable of effectively and efficiently completing those tasks that will help the
organization achieve its overall objectives.
It is the process of formulating plans to fill future openings based on an analysis
of positions that are expected to be filled and whether these will be filled by inside
or outside candidates

Objectives of Human Resource Planning


1. Forecast personnel requirements
2. Cope with changes
3. Use existing manpower productivity
4. Promote employees in a systematic way
5. Facilitating in succession planning

Factors Affecting HRP


Organisational
Growth Cycle
and Planning
Type and
Strategy of
Organisation

Time
Horizons

HRP

Type and
Quality of
Forecasting
Information

Environmental
Uncertainties

Outsourcing

Nature of
Jobs being
Filled

HRP Process
1. Environmental scanning
2. Forecasting & analyzing demand for HR
3. Forecasting & analyzing supply of HR
4. Developing action plans to match HR demand & supply

HRP Process
Environment

Organisational Activities
and Policies

HR Needs Forecast

HR Supply Forecast

HR Programming

HRP Implementation

Control and Evaluation


of Programme
Surplus
Restricted Hiring
Reduced Hours
VRS, Layoff, etc

Shortage
Recruitment
Selection, etc

nvironmental Scanning
Systematic process of studying & monitoring the external environment of the
organization in order to pinpoint opportunities & threats.
Involves long range analysis of employment.
Factors include economic factors, competitive trends, technological changes,
socio-cultural changes, politico-legal considerations, labour force composition &
supply, & demographic trends.

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nvironmental Scanning

Ex., competitive pressures are likely to increase resulting in enhanced productivity requirements &
HRP objective may be to increase employee productivity by 5% in 2 yrs. which will require the firm
to determine current employee productivity (output / employees)
Attempts to answer 2 questions:
Which jobs need to be filled (or vacated) during the next 12 months?
How & where will we get people to fill (or vacate) these jobs?

Demand & supply of labour in loose & tight labour market


Major impact of the shortage of skilled workforce (tight labour market) in India has been on staff cost
(increased by 35% in 2005)
Fast growing sectors like retail, ITeS, telecom are new & do not have historical talent to bank on & hence
they are hiring from other sectors with skill sets that are relevant to their industries
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Forecasting HR Demand
FORECASTING makes use of information from the past & present to identify expected future
conditions.
Forecasts are not perfectly accurate & as the planning scope becomes shorter the accuracy of
forecasts increases
HR demand forecasts may be internal / external
External factors as competition (foreign and domestic), economic climate, laws and regulatory bodies,
change in technology and social factors.
Internal factors include budge constraints, production levels, new product and services, organizational
structure etc..

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Methods of Demand Estimation


1.

Management Judgment
Top-Down Approach
Bottom Up Approach

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Methods of Demand Estimation


2. RATIO-TREND ANALYSIS
RATIO between output & manpower deployed to achieve that output is established
at a given point of time

Eg., revenue per employee, sales vol. per salesperson, service contract per engineer, units produced
per employee, etc.,

Historical ratio between:

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Some causal factor (sales volume)

No. of employees required (number of salesperson)

Methods of Demand Estimation


Example: Hotel management staff open 20 more bedrooms. As per past
trend, 55 bedroom requires 60 staff, hence ratio of staff to bedroom is 1.09
For more 20 bedrooms - 21.8=22 staff required
So total 22 + 60= 82 staff required

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Methods of Demand Estimation


3. REGRESSION ANALYSIS
Drawing a statistical comparison of past relationship among variables

Statistical relationship between no. of patients (business factor) & employment level of nurses in
a nursing home may be useful in forecasting the no. of employees that will be needed if the no.
of patients increases by say 20%

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Methods of Demand Estimation


LINEAR REGRESSION ANALYSIS
Relationship between two variables which is
directly & precisely proportional

Production output & manpower are the two


variables & the relationship between these
two is plotted on a graph by drawing a line
of best fit

X
x
x

x
x

Analysis aims at providing a measure of the extent


to which changes in the values of two variables
are correlated with one another
b
Production level
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Methods of Demand Estimation


4. Delphi Technique
Experts go through several rounds of estimates with no face-to-face meeting
Incorporates future plans & knowledge of experts related to mkt., industry &
technical development

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Methods of Demand Estimation


5. Work-Study Technique:
1.Planned output for next year
2. Standard hours per unit
30 Planned hours for the year

: 20000 units
:5
: 100000

4. Productive hours per man/year

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(allowing normal OT, absenteeism and idle time)

: 2000

5. Number of direct workers required

: 50

Forecasting & Analyzing HR Supply


The supply analysis covers:
1. Existing human resource
2.

Internal supply forecasts relate to conditions inside the org. such as age
distribution of workforce, terminations, retirements, etc. Example- employee
replacement chart

3.

External supply forecasts relate to external labour market conditions &


estimates of supply of labour to be available to the firm in the future in different
categories

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1. Present Employees
2 types

Skills inventory: describes the skills & knowledge of non-managerial employees & is used
primarily for making placement & promotion decisions

Management inventory: contains the same information as in skills inventory, but only for
managerial employees which describes the work history, strengths, weaknesses, promotion
potential, career goals

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Uses of a Human Resource


Information Systems (HRIS)
Employee and Labour Relations
Union Negotiation Costing
Auditing Records
Attitude Survey Results
Exit Interview Analysis
Employee Work History

Skills Inventories
Turnover Analysis
Absenteeism Analysis
Restructuring Costing
Internal Job Matching
Job Description Tracking

Health, Safety and Security


Safety Training
Accident Records
Material Data Records

Compensation and Benefits


Pay Structures
Wage/Salary Costing
Flexible Benefit Administration
Vacation Usage
Benefits Usage Analysis

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HRIS

HR Planning and Analysis


Organisation Charts
Staffing Projections

Equal Employment
Affirmative Action Plan
Applicant Tracking
Workforce Utilisation
Availability Analysis

Staffing
Recruitment Sources
Applicant Tracking
Job Offer Refusal Analysis

HR Development
Employee Training Profiles
Training Needs Assessments
Succession Planning
Career Interests and Experience

2. Internal Supply
Techniques are:
1. Inflows and Outflows
2. Turnover rate
3. Conditions of work and absenteeism
4. Productivity level
5. Movement among jobs

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1. Inflows and Outflows:

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2. Turnover rate:
LABOUR WASTAGE ANALYSIS
Traditionally LW is measured by the employee turnover index (% wastage index)

(No. of employees leave in year / avg. employees) x 100

Turnover classified into:

Avoidable separations (resignations & dismissal)

Unavoidable separations (retirement, death, & marriage)

Turnover rate = [(No. of separation / M] x 100

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3. Conditions of work and absenteeism


= {(number of persons - days lost)/ (average number of persons* number of
working days)}*100
4. Productivity level
5. Movement among jobs

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Methods of Forecasting External HR Supply


INTERRELATED FACTORS THAT MUST BE CONSIDERED IN PROJECTING EXTERNAL HR SUPPLY

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Government estimates of population available for work

Net migration into and out of the area

Numbers entering the workplace

Numbers leaving the workplace

Numbers graduating from schools / colleges

Changing workforce composition

Technological shifts

Industrial shifts

Trends in the industry (actions of competing employers)

Economic forecasts

Government regulations & pressures such as job reservations for certain groups

HR Plan Implementation
Strategy HR Initiative
Strategies for Managing
Shortages

Recruit new permanent


employees
Offer incentives to postpone
retirement
Re-hire retirees part-time
Attempt to reduce turn-over
Work current staff overtime
Subcontract work to another
company
Hire temporary employees
Redesign job process so that
fewer employees are needed

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Strategies for Managing


Surplus

Hiring freeze
Do not replace those who leave
Offer VRS schemes
Reduce work hours
Leave of absence
Across the board pay-cuts
Layoffs
Reduce outsourced work
Employee training
Switch to variable pay plan
Expand operators

Managerial Succession Planning


A systematic & deliberate process of identifying, developing & tracking key individuals within

the firm to prepare them for assuming senior & top-level positions in future.
Eg., SAIL poaching from global players & preparing a defence system wherein 2 nd & 3rd
line of command is being prepared; IBM, ExxonMobil, GE, etc., have already hired its

CEO for 2010


Eg., Godrej, Marico (fly. owned business) in India have drop dead succession plan which
keeps the wheel moving where a promoter of the fly-owned firm may always be around
to guide the company
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Action Decisions in HR Planning


After the supply of and demand for workers has bee n analyzed, the two
forecasts must be compare d. Whenever there is a gap between the two
estimates, a course of action must be c hosen.
If the supply of workers is less than the demand, then it can be filled with
present employees who are willing to work overtime

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Action Decisions in HR Planning


If there is a shortage of skilled employees, then train and /or promote
present employees; recruit less skilled employees; recall employees who
were previously laid off.
Possible solutions to an employee surplus are:- attrition, early retirements,
demotions, layoffs, terminations

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Action Decisions in HR Planning


Organizations are using more Part-time workers, subcontractors and independent

professionals as a response to intense global competition, rapid technological change


and information is the key to successful HR planning. A human resource
information system (HRIS) is an integrated way to acquire, store, analyze and control

information flow through an organization.


A highly developed HRIS can increase the efficiency and response times of tracking
applicants, skills inventory, career planning and employee service programs ears caused

by recent workforce reductions

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Summary
Human Resource Planning
Methods of Forecasting
HR Demand and Supply methods
Succession planning

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BITS
Pilani
Pilani Campus

Chapter 5 : Analysis of Work, Designing Jobs and Job Evaluation

Chapter 5 -Learning Outcome:


Understand the nature of job analysis and describe the process of conducting
job analysis
Understand job design and describe how it is done
Identify techniques of job design with explanation of each
Understand the job evaluation methods

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Job
Job
- Generally defined as a set of closely related activities carried out for pay.
- The world Development Report 2013, define jobs as are labour activities that generate
income, monetary or in kind, without violating fundamental rights and principles at work.

Job Analysis
- Refers the process of collecting information about a job.
- It involves collection of information that should include knowledge, skill and ability (KSA).

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he Nature of Job Analysis

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he Nature of Job Analysis


Job analysis
- The procedure for determining the duties and skill requirements of a job and the kind of
person who should be hired for it.

Job description
- A list of a jobs duties, responsibilities, reporting relationships, working conditions, and
supervisory responsibilitiesone product of a job analysis.

Job specifications
- A list of a jobs human requirements, that is, the requisite education, skills, personality,
and so onanother product of a job analysis.
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Job Analysis

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Analysis offers Competitive Advantage to a Firm


Laying the foundation for
HRP
employee hiring
t&d
performance appraisal
wage and relay fixation
safety and health

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Process of Job Analysis

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1. Strategic Choices as:


o Employee involvement
o Level of Details
o Timing and frequencies
o Past-Oriented versus Future Oriented
o Sources of Job Data

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2. Information Gathering:
type of data
Methods to use
Who should collect the data?

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3. Information Processing:
Job Description
Job Specification

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Writing Job Descriptions


A job description
- A written statement of what the worker actually does, how he or she does
it, and what the jobs working conditions are.
Sections of a typical job description

Job identification
Job summary
Responsibilities and duties
Authority of incumbent
Standards of performance
Working conditions
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Sample Job Description

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Purpose of Job Analysis

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Methods of Collecting Job Data

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: Observation Method
Advantages

Information source

Provides first-hand information

- Observing and noting the physical


activities of employees as they go

Reduces distortion of
information

about their jobs

Disadvantages
Time consuming
Difficulty in capturing entire job
cycle
Of little use if job involves a high
level of mental activity
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II: Interview Method


Interview formats
Structured (Checklist)
Unstructured
Advantages
Quick, direct way to find overlooked
information.
Disadvantages Distorted information

Information sources
- Individual employees
- Groups of employees with same job
- Supervisors with knowledge of the job

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II: Questionnaire Method


Information source
Have employees fill out questionnaires to
describe their job-related duties and
responsibilities.

Advantages
Quick and efficient way to gather
information from large numbers of employees

Disadvantages
Questionnaire formats
-

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Structured checklists
Opened-ended questions

Expense and time consumed in


preparing and testing the

questionnaire

V: Participant Diary
Information source
Workers keep a chronological diarylog of
what they do and the time spent in each
activity

Advantages

Produces a more complete picture of the jo


Employee
participation
Disadvantages

Distortion of information
Depends upon employees to
accurately recall their activities

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V:Quantitative techniques
I: Management position description
Position analysis questionnaire
http://www.paq.com/

Analyze job in terms of employee activities.


194 items , grouped into five basic activities:
Decision making/communication
Performed skilled activities
Physical activities
Operating vehicles/equipment
Processing information

Management position description questionnaire (208 items , classified into


13 categories)
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VII: Functional job analysis


A standardized method by which different jobs can be quantitatively rated ,
classified and compared based on data, people, things scored

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Caselet summary
Large quantity of liquid split by machine operator on the floor
around the machine
Machine operators job description include keeping machine in
clean operating order
Service worker to assist the operator in various ways such as
getting the tools and materials
Sweeper to execute various cleaning jobs, but his duties
commence after the shift ends.

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Job Design
Job design is the conscious efforts to organize tasks, duties and
responsibilities into one unit of work. (the way tasks are combined to form
complete jobs)
Impact on organisations and employee objectives

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Job Characteristics Model

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Guidelines for Job Design

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Factors Affecting Job Design


Organizational Factors:

Characteristics of Task

Work Flows

Work Practices

Environmental Factors:

Employees ability and availability

Social and Cultural Expectations

Behavioural factors:

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Feedback

Autonomy

Use of Abilities

Variety

Job Design Approaches


From Specialized to Enlarged Jobs
- Job enlargement

Refers to the expansion of the number of different tasks performed by employee in a singl
- Job enrichment

Redesigning jobs in a way that increases the opportunities for the worker to experience fe
of responsibility, achievement, growth, and recognition.
- Job rotation

Moving a trainee from department to department to broaden his or her experience and identify strong and
points to prepare the person for an enhanced role with the company
Systematically moving workers from one job to another to enhance work team performance.
Flexibility in scheduling, adapting to changes, vacancies .

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Job Rotation

Tasks
Drill holes

Week 1

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Tasks
Assemble
Parts

Week 2

Tasks
Test
Component

Week 3

Job Enlargement

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Employee 1

Employee 2

Employee 3

Tasks
Drill holes
Assemble Parts
Test

Tasks
Drill holes
Assemble Parts
Test

Tasks
Drill holes
Assemble Parts
Test

Job enrichment
Task 2
(controlling)

Task 1
(doing)

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Ordering
materials
Planning
workload

Drill holes
Assemble
Parts
Test

Job Reengineering
Pattern breaking
Realignment with corporate goals
Abolition of power structure
Work flow redesigning
Enhancing IT applications
Redefining titles and positions
Establishing learning organization

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Job Design Approaches

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Job Analysis in a Jobless World


Why Managers Are Dejobbing Their Companies
External factors leading to dejobbing.

Dejobbing
- Broadening the responsibilities of the
companys jobs
- Encouraging employee initiative.

Internal factors leading to dejobbing


- Flatter organizations
- Work teams
- Re-engineering

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Rapid product and technological change


Global competition
Deregulation,
Political instability,
Demographic changes
Rise of a service economy

Job Analysis in a Jobless World


Why Use Competency Analysis? (contd)
- Maintain a strategic focus

Describing the job in terms of the skills, knowledge, and competencies the worker need
more strategic.
-

Measure performance
Measurable skills, knowledge, and competencies are the heart of any companys
performance management process.

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The Personal Effectiveness Index (For


Associates and Executives)
Competency

Technical and Professional expertise

Definition

Demonstrated knowledge and skills within a particular functional domain.

Teamwork

A cooperative attitude between those working together on a task/series of tasks and jobs

Initiative

A preference to act and doing more than what is required or expected

Decision making and Problem solving


Communication

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An ability to select a course of action amongst several alternatives.


An ability to impart or exchange thoughts and ideas orally and in written

Job Evaluation
It is the process of analyzing and assessing the various jobs systematically to
ascertain their relative worth in the organization.

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Deference Between Job


Evaluation and Performance
Appraisal

Difference between Job Evaluation and Performance Appraisal

Job Evaluation

Job Appraisal

The job is rated, keeping in view such factors as


Employee is rated on the basis of his or
responsibility, qualification, experience, working
her performance
conditions, etc. required for performance of the job.

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A job is rated before the employee is appointed to


occupy it.

Evaluation takes after the employee


has been hired and placed on a job

The purpose is to establish satisfactory wage


differentials

The purpose is to effect promotions,


offer reward, award punishments,
assess training needs, resort to lay-offs,
transfers, etc.

It is not compulsory. Many organisations carry on


without it. Where it is followed, it is mainly for lower
level jobs.

Compulsory. It is done regularly for all


jobs.

Job evaluation committee (comprising internal and


external experts) is constituted for the purpose of
evaluation.

Appraisal is done by employees


themselves, peers, superiors, group of
people, or combinations of these.

Job-evaluation Process
Objectives of Job
evaluation
Job Analysis
Job description

Job evaluation
programme
Wage survey
Employee
classification
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Job specification

Methods of Job Evaluation


Analytical
Methods
Point Ranking
Method
Factor
Comparison
Method
Job Evaluation

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NonAnalytical
Methods
Ranking
Method
Job-Grading
Method

Ranking Method
This is the simplest and the most inexpensive method of evaluation. The
evaluation is done by assessing the worth of each job on the basis of its title
or on its contents, if the latter is available. The job is not broken down into
elements or factors. Each job is compared with others and its place is
determined

Drawbacks - Job evaluation may be subjective, as the jobs are not broken
into factors. It is hard to measure whole jobs.

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Job Ranking by Olympia Health Care

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GRADING /CLASIFICATION Method


This method does not call for a detailed or quantitative analysis of job factors. It is based
on the job as a whole

Under this method the number of grades if first decided upon, and the factors
corresponding to these grades are then determined
Facts about jobs are collected and are matched with the grades, which have been
established.
The essential requirements of this method are to frame grade descriptions to
cover discernible differences in degree of skill, responsibility and other job
characteristics.
Job grades are arranged in the order of their importance in the form of a schedule.
The lowest grade may cover jobs requiring greater physical work under close
supervision, but carrying little responsibility. Each succeeding grade reflects a
higher level of skill and responsibility, with less and less supervision
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

GRADING /CLASIFICATION Method (Contd.)


Advantages
Its simple and inexpensive.
In organizations where number of jobs is small, this method yields
satisfactory results
Disadvantages
Job description are vague and are not quantified.
Difficulty in convincing employees about the inclusion of a job in a
particular grade because of vagueness of grade descriptions.

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Point Method
This system starts with the selection of job factors, construction of
degrees for each factor, and assignment of points to each degree.
Different factors are selected for different jobs, with accompanying
differences in degrees and points. The range of grades and scores is
also predetermined- for example, from 210 to 230 points, the 5th
grade; 231 to 251 points the 6th grade and so forth. A given fob is
placed on a particular grade, depending on the number of points it
scores.

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Procedure for Establishing Point


Method of Job Evaluation
Select Job Cluster
Identify Compensable Factors
Determine Degrees and Define Each
Compensable Factors
Determine Factor Weights
Determine Factor Point Values
Validate Point System
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A Point Method Example


1.

Select Job Cluster - Assume we are going to develop point system for the
administrative job cluster

2.

Identify Compensable Factors - Assume compensable factors identified


are education, job knowledge, contacts, complexity of duties, and initiative

3.

Determine Degrees and Define Each Compensable Factors

- In

administrative job cluster, Education, Job Knowledge, and Initiative have


been determined to have five degrees; Contacts has four; and Complexity
of Duties has three

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A Point Method Example (Cont.)


FACTOR: CONTACTS
Level (Degrees)

Points

IV Usual purposes of contacts are to discuss problems and possible

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solutions, to secure cooperation or coordination of efforts, and to get


agreement and action; more than ordinary tact and persuasiveness required.
III Usual purposes of contacts are to exchange information and settle

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specific problems encountered in course of daily work.


II Contacts may be repetitive but usually are brief with little or no

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continuity.
I

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Contacts normally extend to persons in immediate work unit only.

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A Point Method Example (Cont.)


FACTOR: COMPLEXITY OF DUTIES
III

Performs work where only general methods are available. Independent action and
judgment are required regularly to analyze fact, evaluate situations, draw conclusions,
make decision, and take or recommend action.

II Performs duties working from standard procedures or generally understood methods.

Some independent action and judgment are required to decide what to do, determine
permissible variations from standard procedures, review facts in situations, and
determine action to be taken, within limits prescribed.
I

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Little or no independent action or judgment. Duties are so standardized and simple as to


involve little choice as to how to do them.

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A Point Method Example (Cont.)


4.

Determine Factor Weights - Assume the committee believes that


education is quite important for administrative job cluster and
sets the weight for education at 35%. The weights of other four
factors were determined by the committee to be:

Job Knowledge25
Contacts18
Complexity of Duties17
Initiative5
The percent total is 100%
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A Point Method Example (Cont.)


5. Determine Factor Point Values - Committee determines total number of
points for the plan. Number may vary, but 500 or 1,000 points may work
well. Committee has determined that a 500 point system will work.

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Job Evaluation Worksheet (500-Point System)

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A Point Method Example (Cont.)


6. Validate Point System - Each committee member should take a random
sample of jobs within chosen job cluster and calculate weights for
each job selected
Point total for Administrative 2 job is determined to be 239 points

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Job Evaluation Worksheet for Administrative 2 Position

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Point method
Advantages A job is split into a number of factors. The worth of each job is determined on the basis of its factors and not by
considering the job as a whole.
The procedure adopted is systematic and can easily be explained to the employees.
The method is simple to understand and easy to administer.

Disadvantages Employees may disagree with the points allotted and to factors and their degrees identified.
Serious doubts are expressed about the range of points allotted and matching them with the job grades, for
example- a score range of 238 to 249 is grade seven and the next range of 250 to 271 is grade six. A
variation of one point makes all the difference.
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