Job Evaluation

Dr. Deepak Bangwal

 Job Evaluation
…is a process of determining the relative worth
of a job.
Aims at…
• Reduction in inequalities in salary structure
 Job Evaluation: Pre-requisites
• Job content – job description and specification
• Top management support
• Cooperation of union and individual workers
• Comparison of Jobs
• Involvement of expert in job-evaluation
techniques
 Job Evaluation Methods
Non-Analytical Methods Analytical Methods

Classification Factor
Ranking Method Point Method
Method Comparison

Methods designed on the Methods designed on the

basis of the jobs as a basis of the requirements
whole and elements of the jobs
 Ranking Method
• Worth of a job based on:
Judgement of skill; Effort (physical and mental); Responsibility (supervisory
and fiscal); Working conditions; Ranked in descending order from best to
worst
• Processes:
– Make a list of benchmark jobs or list of each position in a business
(benchmark jobs as in producers, maintainers, administrators, cashiers,
etc) [NOT employees]
– Write short description or primary duties of each position
– Determine the characteristics that is considered most important for the
company
– Jobs are perceived to be the ones with the highest and lowest value;
selecting a job mid-way and finally choosing others at lower or higher
intermediate points.
– Divide the ranked jobs into grades and an initial estimate (based on
common features among groups to bring about distinction between
groups)
 Example: Ranking Method
Rank Job Monthly Salaries
1. Accountant Rs 60,000
2. Accounts Clerk Rs 30,000
3. Purchase Assistant Rs 25,000
4. Machine-Operator Rs 20,000
5. Typist Rs 17,000
6. Office Boy Rs. 15,000
 Ranking Method (Contd…)
– Presentations and continuous iterations
• Simple, quick and inexpensive only if agreement of the jobs
and ranks are reached easily
• Used in small organisations
LIMITATIONS:
• Highly subjective.
• Not diagnostic to point the specific areas of weakness and
strength of a worker.
• Existing jobs must be re-ranked to accommodate new
position
• Requires detailed knowledge of every job for evaluation
and ranking and difficult when a large number of jobs are
under consideration
• Difficult to justify slotting new jobs
 Classification Method
• One whole job
• Slots jobs into grades
• Hierarchy of grade definitions
– Skill
– Competence
– Experience
– Initiative
– Responsibility
• Grades are limited to 4 to 8 levels and more than 8
grades become unmanageable
• Simplicity and easily understood
 Example: Classification Method
Executives:
CLASS I Office manager, Deputy office manager, Office
superintendent, Departmental supervisor, etc.

Skilled Workers:
CLASS II Purchasing assistant, Cashier, Receipts Clerk, etc

Semi-Skilled Workers:
CLASS III Stenotypists, Machine-operators, Switchboard
operators, etc.

Semi-Skilled Workers:
CLASS IV Daftaris (book-binders), File clerks, Office boys,
etc.
 Factor Comparison Method
Analytical extension of Classification Method
1. Select a number of “key jobs” (generally 15
to 20) [NOT whole but separate]
2. Analyse them on certain critical factors. For
example, 5 critical factors are identified
i. Mental Requirement
ii. Physical requirements
iii. Skill requirements
iv. Working conditions
v. Responsibility
 Factor Comparison Method
(Contd…)
3. Rank each key-job within each factor which
will be different for different jobs
4. Assign wages to each factor. Wages should be
in proportion to the estimated total price of a
job
 Example: Factor Comparison
Method – Tools Workshop
Job Skill Mental Physical Responsibilities Working
Requirement requirement conditions
Tool maker
1 1 4 1 4

Craft worker
2 2 3 2 3
Process
Operator 3 3 2 4 2

Maintenance
assistant 4 4 1 3 1

Ranking Jobs by Factors

 Example: Factor Comparison
Method – Tools Workshop
Job Skill Mental Physical Responsibilities Working
Requirement requirement conditions
Tool maker
35 30 5 20 10

Craft worker
30 25 15 15 15
Process
Operator 30 30 15 10 15

Maintenance
assistant 20 15 25 15 25

Relative Importance of Jobs

 Example: Factor Comparison
Method
Job Skill Mental Physical Responsibilities Working
Requirement requirement conditions
Tool maker
91 78 13 52 26

Craft worker
66 55 33 33 33
Process
Operator 54 54 27 18 27

Maintenance
assistant 32 24 40 24 40

Allocation of Money Values

(in Rs)
 Example: Factor Comparison
Method – Tools Workshop
Benchmark Jobs Non-Benchmark
Job
(Rs) jobs (Rs) Jobs evaluation
based on:
Tool maker 91 • Education
Craft worker 66 • Financial
Responsibility
Process Operator 54 • Job-related
Assembler 42 experience
• Supervision
Maintenance • Teamwork
32
Assistant • Creativity

Slotting Non-Benchmark jobs

 Factor Comparison Method:
Advantages
• Job comparison on factor-to-factor basis
• Rankings made by defining factors thus
avoiding imprecise definitions
• Not need to convert points to money value –
leads directly to a price for a job
• Useful for medium to large organisations
 Factor Comparison Method:
Disadvantages
• Complete dependence on the benchmark
jobs…How do you believe that the benchmark
jobs lead to equal incomes?
• Could be held to be discriminatory
• Though analytical still requires subjective
judgement
 Example 2: Factor Comparison
Method
Job Hourly Skill Physical Responsibilitie Working
Rate requirement s conditions
Secretary
Rs. 90 Rs 45 Rs 20 Rs 20 Rs 5

Admin
Assistant Rs 110 Rs 55 Rs 25 Rs 25 Rs 5

Supervisor
Rs 150 Rs 60 Rs 35 Rs 40 Rs 15

Manager
Rs 210 Rs 90 Rs 35 Rs 70 Rs 15
 Point-Method
1. Select job cluster and the jobs to be evaluated
2. Jobs should be analysed and job
descriptions/specifications should be prepared
3. Select compensable factors
4. Define each factors’ specifications
i. Working conditions: noise levels, temperature
ii. Education: SSC, HSC, Undergraduate,
Graduate,Post-graduate
iii. Experience: Entry-level, 0 – 2 years, 3-5 years, etc
 Point Method (Contd…)
5. Define factor degrees:
i. Degree 1 for entry-level, Degree 2 for 0-2 years of
experience, Degree 3 for 3 – 5years of experience, etc.
6. Determine total points in plan
i. Degree 1 for entry-level = 30 points
ii. Degree 2 for 0-2 years of experience = 75 points
iii. Degree 3 for 3 – 5 years of experience = 120 points
iv. Degree 4 for 6-10 years of experience = 165 points
v. Degree 5 for 11 to 25 years = 255 points, Degree 6 for
26 to 40 years = 300 points
 Point Method (Contd…)
7. Evaluate jobs
i. Key jobs are known
ii. Then other jobs are evaluated based on the
factors identified