Personnel Management

Job Evaluation

 

Job evaluation is a systematic way of determining the value and worth of a job in relation to other jobs in an organization. It tries to make systematic comparison between jobs to assess their relative worth for the purpose of establishing a rational pay structure.

According to International Labour Organisation

 “Job evaluation is an attempt to determine and compare methods 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 Wendell French

“ Job evaluation is a process of determining the relative worth of various jobs within the organization so that differential wages may be paid to jobs of different worth.”

Objectives of Job Evaluation

1. To determine equitable wage differential between different jobs in the organization.
2. To eliminate wage inequities.
3. To develop a consistent wage policy.
4. To establish a rational basis for incentive and bonus schemes.
5. To provide a framework for periodic review and revision of wage rates.
6. To provide a basis  for wage negotiations with trade  unions;
7. To minimise wage discrimination on the  basis  of age.  sex,  caste,  region, religion.
8. to enable management to gauge and  control  the payroll

 

Difference between Job Evaluation and Performance Appraisal

 

Job Evaluation	Performance Appraisal
It is the  assessment   of various  jobs  to find  out  their   relative   worth.	It is the assessment  of performance  of different  employees  performing  the  same  job.
It  takes      into     consideration      the requirements   of different jobs.	It takes  into  consideration  the performance of different  individuals.
Its  purpose  is to identify the basis   for fixing  wages,   salary   for  various   jobs.	Its   purpose     is  to  identify   the   basis    for decisions concerning  pay raise,  promotion. training   and  transfer.  etc.
It rates   the jobholder   and  not  the job.	It rates   the job  and  not ‘the jobholder.
It is  done  before   an  employee.	It  is  done    after   an   employee  joins   and performs  the job.

 

 

Process of Job Evaluation

The process  of job  evaluation involves the following steps:

1. Gaining Acceptance

First of all the cooperation and support  of top management,employees and  the trade  union  should  be obtained through  communication and participation.  For this  purpose   conferences, letters  and  booklets can be used explaining the aims  and  benefits  of job evaluation.

2. Constituting Job   Evaluation  Committee

It is very  difficult  for  a single person   to  evaluate   all  jobs   objectively. Therefore,  a  committee  consisting  of experienced and respected representatives of a management and workers  and outside experts should be constituted. Participation of employees in job evaluation will reduce their doubts  and  suspicion about  the programme.

3. Selecting Jobs to be  Evaluated

Due to constraints  of time  and  money  it may not be possible  to evaluate  each and every job. Therefore. some key jobs  may be selected in each department. The key jobs are evaluated in detail and the other jobs are compared with the key jobs. The key jobs  should  be representative of the type of work performed.

4.Describing the  Jobs

A detailed written description of every job is prepared to indicate  the  duties   and  responsibilities involved in it.  The job  description  is thoroughly checked  to ensure  that  there  are no omission and duplication in it. The acceptance of the employee performing the job is also obtained to the job description.

5. Selecting the Method of Evaluation

There  are several  methods available for evaluating jobs. The method  most  appropriate to the job and the organisation is choosen. If possible  more  than one method  may be used  to increase  the accuracy of evaluation.

6. Weighting Job

A job  is  compared with  other  jobs  in  terms   of Significant  factors which  may be as follows:

(a) Skill-mental   and manual

(b)    Experience

(c)  Efforts  and  initiative

(d)    Working conditions

(e)   Responsibilities to be undertaken

(f)  Supervision required

Weights are assigned to each job  factor and  total weights  for a job  indicate  its relative value.  Different jobs  are  arranged in a sequence in terms  of their  relative worth  to the company.

7. Assigning Money Values

Each job is priced  in terms  of its worth.  In other words, the sequences of jobs  in terms of their relative worth is related to a money scale.

8. Periodic  Review

A periodic  review and revision of job descriptions  will help to assuage  the feelings of employees  who believe that  their  work  was not properly evaluated. Moreover, it will enable management  to update job description  in the light of technological and other changes. For example, automation  of a job reduces physical effort, but  increases  responsibility.

Methods of Job Evaluation

Various methods  of job  Evaluation  may be grouped  as under

1. Non-quantitative methods

(a)   Ranking  or job  comparison

(b)    Grading  or job  classification

2. Quantitative methods

(a)    Point rating

(b)    Factor comparison.

1. Ranking Method

It is the simplest method of job evaluation. According to this method, jobs are arranged from highest to lowest, in order of their value or merit to the organization. Jobs can also be arranged according to the relative difficulty in performing them. The following table is a hypothetical illustration of ranking of jobs.

Rank	Monthly salaries
1.     Accountant	Rs. 35000
2.     Accounts clerk	Rs. 28000
3.     Purchase assistant	Rs. 21000
4.     Machine- operator	Rs. 18000
5.     Typist	Rs. 12000

The variation in payment of salaries depends on the variation of the nature of the job performed by the employees.

Three   techniques can  be  used  for  ranking jobs.   These   techniques  are  as  follows:

a) Job  Description

 In this  technique.  a written jobs  description  is prepared for  every job.  The  job  descriptions   are  then  studied  and  analysed.  the  differences between them  in terms   of duties,  responsibilities,  skill  requirements,   etc.  are noted. Each job  is assigned  a rank   depending  upon  its relative significance. Several raters may  independently   rank   each  job.   The  average of  these   ratings  is  calculated  to determine  the  final  ranking.  The  following table  illustrates  the  procedure:

Job	Rater-X	Rater- Y	Rater-Z	Average
A
B
C
D

In this  method,  the  rater   is required  to keep  in mind  all  the jobs  being  ranked. This  may  not be possible  when  the  number  of jobs  is large.  The  rater   may  overlook significant differences among jobs.  As a result  accuracy of ranking may be low. Paired comparisons  can  be  used   to  overcome this  problem.

(b)  Pair  Comparisons.    In this  technique each job  is paired   with  every other  job in the series. The  more  difficult job  in each  pair  is identified.  Rank  is then  assigned on the  basis   of the  number  of times   a job  is rated   more   difficult. For  example, the pairs  and  ratings  in an  organisation  may  be  as  follows :

 

Pair	More Difficult Job	Rank
Assistant – Upper Division Clerk	Assistant	1
Upper Division Clerk – Lower Clerk	Upper Division Clerk	2
Lower Division Clerk – Peon	Lower Division Clerk	3
Assistant – Lower Division Clerk	Assistant
Assistant – Peon	Assistant
Upper Division Clerk – Peon	Upper Division Clerk Peon	4

 

(c)  Ranking  Along  a Number  Line

  In this  technique,  ranks   obtained  through job  descriptions  and  paired   comparisons  are  spread  along  a number  line.  Each  job is then  placed along  the  line  on the  basis   of its closeness  to the  highest  ranked  job. For  example, in the  following number  line,  A  is  the  highest  ranked  job,   E  is  the lowest ranked job.  Other  jobs  are  spaced according to their  closeness  to the  highest ranked job.

Advantages of Ranking Method

(i)   It is the simplest and the oldest method.

(ii)    It is very economical and less time consuming.

(iii)   It involves little paper   work.

Disadvantages of Ranking Method

(i) It does not indicate the degree of difference between different jobs. It merely reveals that one job is more important than others.

(ii) It involves subjective judgment because a job is not analyzed and key factors are not compared. Therefore, it is less accurate and is not fully reliable.

(iii) The rater is required to be thoroughly familiar with all jobs to be rated.

2. Grading Method

(i)   Job   classes  or  grades  are  established.  A job  grade   is  a group   of different jobs  of Similar difficulty or requiring Similar knowledge and  skills  to perform.

(ii)    Each  job  grade   is  defined in the  form  of a written description.

(iii)    Each  job  is classified  into  an  appropriate  grade   depending  on  how  well  its characteristics  match   the grade  definitions. For this  purpose job descriptions are  carefully analysed.  In this  way, a series   of job  grades  in  developed and a different wage  rate  is fixed  for  each  job  grade.

Advantages of Ranking Method

(i)This method  is easy  to understand   and  simple to operate.

(ii)   It is more   accurate  and  systematic  than  the  ranking  method.

(iii)     It is   economical  and  therefore  suitable for  small   concerns.

(iv)  It provides an  opportunity  to develop a systematic  organisation  structure.

(v)   Pay grades  can  be compared with  those  of other  concerns.  Grouping of jobs into  grade   simplifies wage  administration.

(vi)    This  method  is used   in  Government offices.

Disadvantages of Ranking method

(i)  It is very  difficult to write  accurate  and  precise  descriptions   of job  grades.

(ii) Some jobs  may  involve tasks  which  overlap more  than  one grade.  It is difficult to classify such  jobs   in a particular  grade.

(iii)The   system is rigid and  personal judgement is involved in deciding job classes and assigning jobs   to specific classes.

3. Factor Comparison Method

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 appreciate. 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, responsibility, supervisory responsibility, working conditions and other such factors. 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 weighted by importance. In other words, wages are assigned to the job in comparison to its ranking on each job factor.

Advantages of Factor Comparison Method

i. It is a relatively more analytical and  objective method.

ii. As few factors are  utilized the  chances of overlap are

iii. The procedure involved is logical.

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

v. It is more reliable and valid as each job is compared with all other jobs in terms of key factors.

vi. Money values are assigned in a fair and objective manner depending on factor ranking.

Disadvantages of Factor Comparison Method

i. It is difficult to understand and operate.

ii. It is a time consuming and expensive method.

iii. The use of present wage rates for key jobs may lead to error in the beginning.

4. Point Method

It is the  most  widely  used   method  of job  evaluation.  Under   it, jobs   are  divided component factors.  Points   or  weights are  assigned  to each  factor   depending on  degree  of its  importance   in  a particular   job.  the  total  points   for  a job  indicate  it. relative worth   or  value.   The  procedure   involved is as  follows:

(i)   Determine the  Job   to  be  Evaluated

In  a  large   organisation,   there   are several jobs   involving different  skills,   efforts, working conditions,   etc.  Therefore,  a few benchmark   or  representative   jobs  are  selected  from  each  job  category.

(ii)   Select the  Factors

The  selected jobs  are  analysed  and  factors   common to all these jobs  are identified. The factors  choosen for evaluation should  be measurable, significant, mutually  exclusive  and   acceptable  to  both   management   and   workers. The  selected factors   may  be  divided  into  sub-factors  as given  below:

Factor	Sub-factors
Skill	Education, experience, training, judgement
Efforts	Physical and mental
Responsibility	Qauality of output, raw materials, machinery and equipment, safety of others.
Working Conditions	Working environment, accidents, hazards, discomfort etc.

(iii)    Define the Factors

The  selected factors  and  sub-factors  are  defined clearly in writing. This   is  necessary  to  ensure   that   different  raters    interpret   a  particular factor  in the  same   way.

(iv)   Determine the  Degrees

Different degrees of each  factor   are  decided  and defined clearly. The  same   number  of degree  should   be used  for  each  factor   so  as to ensure  consistency. For example, the degrees of ‘education’ may be defined as follows:

Degree	Definition
1	Should be able to do ordinary counting and to understand verbal instructions.
2	Should be able to read and write.
3	Should be able to carry out mathematical calculations.
4	Requires ability to compare written material and to make advanced calculations.

(v)    Determine   Relative values of Job  Factors

The  relative value  of various factors   depends  upon   their   significance  to the job.  Maximum points   for  each  factor may  be as  follows:

Factor	Maximum Points
Skill	400
Effort	175
Responsibility	300
Working Conditions	125
Total	1,000

The total  points   for a particular  factor  should be allocated among its subfactors. For instance,  the  total  points   for ‘skill’  may  be allocated as  education  75,  experience 125,  training  100  and  judgement   100.

(vi)   Assign Point  Values to Degrees

 Point values for different degrees of a factor may  be decided  on  the  basis   of arithmetic  progression  as  shown in the  Table.

(vii)    Find  Point  Value  of the  Job

   The various points  assigned to different factors in a job  are  added   up to find  out  the total  points   which  indicate the  relative worth  of the job.

(viii)    Assign  Money Values

 Once  the  worth   of a job  in  terms   of total  points   is known these   are  connected  to  money values  keeping  in  view  the  prevailing  wage rates.  A standard  unit  of money may  be assigned to each  point  so as to convert point scores   into  monetary  values.  This  is illustrated  in the Table.

Advantages of Point Method

(i)   Paint   method   is  the   most    comprehensive   and   accurate   method   of job evaluation.  Factors  are  divided  into  subfactors  and   different  degrees  of a factor  are  considered.

(ii)    Assignment of point  scores  and money values is consistent thereby minimizing bias  and  human  judgement.

(iii)    Systematic   wage   differentials    according   to  content   of  the  job   can   be determined.

Disadvantages of Point method

(i) Point method  is  complicated  and  an  average worker  cannot  understand   it easily.

(ii) It is time-consuming   and expensive.

(iii)    Errors    may  occur   if assigned point   value  are  not  realistic. It is  difficult to determine  factor   levels  and  assign   point  values.

(iii)    It  is  difficult to  apply   this   method  to  managerial  jobs   wherein  the  work content  is not  measurable  in quantitative  terms.

Advantages of Job Evaluation

1. It helps in creating job families by grouping jobs having similar characteristics.
2. Job evaluation enables an organization to develop a systematic and scientific basis for the determination of equitable pay and other incentives.
3. It provides a clear and objective basis for wage negotiations and collective bargaining.
4. Since job evaluation considers the behavioral, motivational and personality requirements of a job in addition to the job characteristics, it provides the basis for determining the career plans and succession plans of the organization.
5. It simplifies wage administration by making wage rates more uniform.
6. It facilitates better utilization of resources as it reveals jobs which require less or more skilled workers than those already performing jobs.
7. It facilitates job redesign by re-allocating the easy and difficult tasks equally among different jobs.

 

Limitations of Job Evaluation

(i) Job evaluation is not exactly scientific.

(ii) The factors taken by the programme are not exhaustive.

(iii) There may be wide fluctuations in compensable factors in view of change in technology, value and aspirations of employers etc.

(iv) It is not suited to determine the relative worth of managerial jobs as these jobs involve considerable planning, decision making and supervision of others which cannot be measure quantitatively.

(v) Employees, trade union leaders, management and the programme operators may assign different weightage to different factors, thus creating grounds for dispute.

(vi) It is time time consuming and expensive process.