DEFINITION OF REWARD MANAGEMENT

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Definition of JOB EVALUATION

Job evaluation is the process of systematically determining a relative internal value of a job in
an organization. In all cases the idea is to evaluate the job, not the person doing it. Job evaluation
is the process of determining the worth of one job in relation to that of the other jobs in a
company so that a fair and equitable wage and salary system can be established.
Job evaluation is a systematic comparison done in order to determine the worth of one job
relative to another.
Is a systematic of comparing different jobs to provide a basis for a grading and pay structure?
It establish the size (how big is the job) and value (the contribution a person has made) of jobs in
organization.there for ,job evaluation is a proces of determining the worthj of each job to be
performed,ranking
and
grading
each
job
with
respective
requirement
of
skill,knowledge,responsibility..etc; for fixing wage or reward pable to the job holder.
The basic principle is: jobs that require greater qualifications, more responsibilities and more
complex job duties should be paid more highly than jobs with lesser requirements.the basis
procedure is to compare the jobs in relation to another for example,in terms of required effort
,responsibility and skills,suppose you know(based on your salary servey) how to price key
benchmark jobs,and then use job evaluation to determine the relative worth of all the other jobs
in your firm relative to these key jobs.you are then well on your way to being able to price all the
jobs in your organization.
Job evaluation is a practical technique, designed to enable trained and experienced staff to judge
the size of one job relative to others. It does not directly determine pay levels, but will establish
the basis for an internal ranking of jobs.
The two most common methods of job evaluation that have been used are first, whole job
ranking, where jobs are taken as a whole and ranked against each other. The second method is
one of awarding points for various aspects of the job. In the points system various aspects or
parts of the job such as education and experience required to perform the job are assessed and a
points value awarded - the higher the educational requirements of the job the higher the points
scored. The most well known points scheme was introduced by Hay management consultants in
1951. This scheme evaluates job responsibilities in the light of three major factors - know how,
problem solving and accountability.

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Objectives of the job evaluation

I.
II.
III.
IV.
V.
VI.

To gather job information

To fix up respnosibilities
The hiarachy and place of various jobs
To determine the ranks or grades of various jobs.
To establish relatives between jobs.
To use these job grades for salary administration.to ensure fair and equitable
wages on the basis of relative worth or value of jobs.in other words, equal
wages are fixed to the jobs of equal worth or value.
To provide a structure for better management planning.
To provide a basis for career progression and for rotation progrms.

VII.
VIII.

Some principles of job evaluation

Clearly defined and identifiable jobs must exist. These jobs will be accurately described
in an agreed job description.

All jobs in an organisation will be evaluated using an agreed job evaluation scheme.

Job evaluators will need to gain a thorough understanding of the job

Job evaluation is concerned with jobs, not people. It is not the person that is being
evaluated.

The job is assessed as if it were being carried out in a fully competent and acceptable
manner.

Job evaluation is based on judgement and is not scientific. However if applied correctly it
can enable objective judgements to be made.

It is possible to make a judgement about a job's contribution relative to other jobs in an

organisation.

The real test of the evaluation results is their acceptability to all participants.

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Job evaluation can aid organisational problem solving as it highlights duplication of tasks
and gaps between jobs and functions.

Job Evaluation is concerned with measuring the demands the job places on its
holder. Most factors that contribute to this job pressure, e.g. physical strength
required, knowledge of mathematics required, are assessed and the result is a
numerical estimate of the total job pressure. When evaluations are carried out on all
hourly paid personnel the techniques uses include establishing relative wage rates
for different tasks. It is possible to use it for all grades of personnel, even senior
management.

The Time Span of Discretion is an interesting and unusual method of job evaluation
developed by Elliot Jaques for the Glacier Metal Company. In this method the job
pressure is assessed according to the length of time over which managers decisions
commit the company. A machine operative, for example, is at any moment
committing the company only for the period needed to make one product unit or
component. The manager who buys the machine is committing the company for ten
years.

METHODS OF JOB EVALUATION

Non Quantitative Techniques

Market pricing method

This method can be very misleading if is used alone.this method tries to understand the
importance of a particular job to that particular industry and rank them accordingly.the highly
important ones are placed high in the organization chart.the characteristics of this method:

Does not asses relative internal work

Influenced by the pay levels set by other employess
Dificult-jobs are not the same in all organization
Does not consider economic condition,emplyer size and other variables.

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Eg: food industry- the most importyant aspect is the quality assuarance
Hardware industry- the most important aspect is the strength of the steel
Service industrty- the most important aspect is the customer services

Ranking Method

The simplest and administratively the easiest techniques.the evaluater compares the job with
other jobs based on duties,respnosibilities and denads made by the jobs on the job incumbment
and the degree of important of the job to the organization and rank all the jobs form the most
important to the least important.the evaluater has to appraise and rank tha jobs but not the
incumbments.
Meritsa.
b.
c.
d.

This method is very simple ,quick and cheaper in terms of terms of time and money.
This method is very suitable for small units.
It is also usefull for evaluating top executives in big organization
It is powerfull instruments for the job evaluation.

Job classification(job grading) methods.

Class and grade are used differently in this method.a grade is a group of different jobs of similar
difficulty or requiring similar knowledge and skills t perform.
Example- assistant accountant,senior accountant and chief accountant are the jobs in the
occupation (grade) of accountant.the group are called classes if they contain similar jobs.
Under this method,jobs at different levels in the organizational hierachy are divided in to various
grades,with a clear-cut definition of each grade.grades are formulated on the basis of nature of
tasks,requirements of skills,knowledge, and responsibilities and authority of variopus jobs.there
are several steps in the mechanism of this method.
a. Decide initially the numbers of pay grades to be set up
b. Identity those jobs which everyones can agree as most representative of each grade.

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c. Define class or grade descriptions for each grade in terms of amount or leaves of jobs
factors in the jobs.
d. Prepare job descriptions for all other jobs,taking these benchmarks jobs in to
consideration.
e. Compare all job with bencmarks jobs and on the basis of the comparison,slot each in to
the grade,which they seem most, clearly belong to.

QUANTATIVE TECHNIQUES OR METHODS

Point Method
A set of compensable factors are identified as determining the worth of jobs. Typically
the compensable factors include the major categories of:
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
These factors can then be further defined.
1. Skill
1. Experience
2. Education
3. Ability
2. Responsibilities
1. Fiscal
2. Supervisory
3. Effort

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1. Mental
2. Physical
4. Working Conditions
1. Location
2. Hazards
3. Extremes in Environment
The point method is an extension of the factor comparison method.
Each factor is then divided into levels or degrees which are then assigned points. Each job is
rated using the job evaluation instrument. The points for each factor are summed to form a total
point score for the job.
Jobs are then grouped by total point score and assigned to wage/salary grades so that similarly
rated jobs would be placed in the same wage/salary grade.
Advantages
The value of the job is expressed in monetary terms.
Can be applied to a wide range of jobs.
Can be applied to newly created jobs

Disadvanteges

The pay for each factor is based on judgments that are subjective.

The standard used for determining the pay for each factor may have built-in biases that
would affect certain groups of employees (females or minorities).

Factor Comparisn Method

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A set of compensable factors are identified as determining the worth of jobs. Typically the
number of compensable factors is small (4 or 5). Examples of compensable factors are:
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain
characteristics.
1. equitable pay (not overpaid or underpaid)
2. range of the factors (for each factor, some jobs would be at the low end of the factor
while others would be at the high end of the factor).

the jobs are then priced and the total pay for each job is divided into pay for each factor. See

example matrix below:

Job Evaluation: Factor Comparison

Job
Secretary
Admin
Assistant
Supervisor
Manager

Hourly
Rate

The hourly rate is divided into pay for each of the following
factors:
Pay for Pay for
Pay for
Pay for Working
.
Skill
Effort
Responsibility
Conditions

9.00

4.50

2.00

2.00

0.50

11.00

5.50

2.50

2.50

0.50

15.00
21.00

6.00
9.00

3.50
3.50

4.00
7.00

1.50
1.50

This process establishes the rate of pay for each factor for each benchmark job. Slight
adjustments may need o be made to the matrix to ensure equitable dollar weighting of the
factors.
The other jobs in the organization are then compared with the benchmark jobs and rates of pay
for each factor are summed to determine the rates of pay for each of the other jobs.

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Advantages

The value of the job is expressed in monetary terms.

Can be applied to a wide range of jobs.

Can be applied to newly created jobs.

Disadvantages

The pay for each factor is based on judgements that are subjective.

The standard used for determining the pay for each factor may have build in biases that
would affect certain groups of employees (females or minorities).

Ranking Method
Ranking This method is one of the simplest to administer. Jobs are compared to each
other based on the overall worth of the job to the organization. The 'worth' of a job is usually
based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal),
and working conditions.
Advantages

Simple.

Very effective when there are relatively few jobs to be evaluated (less than 30).
Disadvantages

Difficult to administer as the number of jobs increases.

Rank judgements are subjective.

Since there is no standard used for comparison, new jobs would have to be compared
with the existing jobs to determine its appropriate rank. In essence, the ranking process
would have to be repeated each time a new job is added to the organization.

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 Classification Method
Classification Jobs are classified into an existing grade/category structure or hierarchy. Each
level in the grade/category structure has a description and associated job titles. Each job is
assigned to the grade/category providing the closest match to the job. The classification of a
position is decided by comparing the whole job with the appropriate job grading standard. To
ensure equity in job grading and wage rates, a common set of job grading standards and
instructions are used. Because of differences in duties, skills and knowledge, and other aspects of
trades and labor jobs, job grading standards are developed mainly along occupational lines.
The standards do not attempt to describe every work assignment of each position in the
occupation covered. The standards identify and describe those key characteristics of occupations
which are significant for distinguishing different levels of work. They define these key
characteristics in such a way as to provide a basis for assigning the appropriate grade level to all
positions in the occupation to which the standards apply.
Advantages

Simple.

The grade/category structure exists independent of the jobs. Therefore, new jobs can be
classified more easily than the Ranking Method.
Disadvantages

Classification judgments are subjective.

The standard used for comparison (the grade/category structure) may have built in biases
that would affect certain groups of employees (females or minorities).

Some jobs may appear to fit within more than one grade/category.

IMPORTANCE OF JOB EVALUATION

Employers do not enjoy high turnover rates, unproductive employees or other issues that
weaken the company. A job evaluation can help an employer avoid these issues--if the evaluation
is used effectively. Although a job evaluation does not determine pay--at least not directly--it
establishes a basis for internal job rankings.

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Job Evaluation Your Way

Do your salary structures generate salaries consistent with the real value of work to the
company? Moreover, are you valuing work in a manner that is consistent with company values
and culture?
The Job Evaluation module of CompXpert can help you ensure that your job classification
system supports company equity goals. It enables you to produce a totally transparent, legally
defensible system in compliance with any regulatory or statutory job classification requirement.
CompXpert easily adapts to any organizational structure and can manage multiple pay structures.

Customize the workflow to your situation

Rate both benchmark and non-benchmark jobs

Flexible to provide direct factor comparison or questionnaire approach

Retains all current and inactive evaluations

Incorporates an evaluation calculator that displays component factor scores, grades, and
user-specified measures while evaluating a job

Create custom queries and save them for future Reports

Cross-check data for consistency and validity

With CompXpert from NPKtools, you are not tied to any particular methodology. Out of the box,
CompXpert supports any point/factor job evaluation method. Essentially, any evaluation
methodology that can be implemented with a spreadsheet can be implemented with
CompXpert.

Feels like Excel

For those accustomed to working with Excel, CompXpert will feel very comfortable. All the
analytical tools you are accustomed to are there at your fingertips: Filter, sort, lookup, and the
rest. Whats missing is the oops factor that ever-present danger when working with
spreadsheets that you could lose your work or worse, your data.

but so much more

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In CompXpert, your company data is stored in an industrial strength database. Multiple users can
be using data at the same time. Get info from people who know the jobs best. Control access by
dept or function. Compare evals across business units or any organizational function to ensure
hierarchy and consistency. This might be an analyst preparing a survey submission, an HR
manager creating a custom report, and a line manager contributing factor ratings. All access is
governed by highly granular, rules-based security that you control.

Job evaluation process.

How are jobs evaluated?

The job evaluation process established the relative value of jobs throughout the university. There
are two steps involved in this process:
1. Job Analysis and Job Description - Using a "job profile," the content of each job is
analyzed to identify key duties, responsibilities, and qualification necessary to perform
the job. Written job descriptions are then prepared to contain this information.
2. Job Evaluation - A computer assisted job evaluation plan, measuring 17 dimensions of
nonexempt work and 28 dimensions of exempt work, is used to evaluate the relative
worth of staff positions. This evaluation process focuses on valuing the content of each
position in terms of a series of well defined compensable factors.
The factors for clerical, service, technical, and administrative support positions include:
a. Knowledge: Minimum required level of specialized training, education, and
previous related work experience.
b. Skill: The manual and physical skills required to perform the duties of the
position.
c. Work Complexity: The degree and amount of judgment, initiative and ingenuity
involved in accomplishing work.
d. Contact with Others: The extent to which the work entails dealing with others in
the course of one's regular duties, including the frequency and nature of contacts
and the likely results of such contacts.
e. Property Protection and Use: The extent to which the position has responsibility
for university property, including funds, vehicles and confidential information.
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f. Work Leadership: The responsibility for directing, instructing and training

personnel; and for planning controlling and assigning work.
g. Working Environment: The physical conditions encountered during a typical
work day. Conditions such as heat, cold, dirt, fumes, hazards, etc. are considered.
h. Student Relations: The responsibility for dealing with students, including the
nature and frequency of contacts.
The factors for professional, administrative, and managerial positions include
responsibility for:
i. Programs, Projects or Operations: The level in the organization, scope of
activities performed, parameters of authority, complexity or nature of
responsibilities, and the minimum credentials required to perform the job upon
hire.
j. Supervision: The number and variety of employees supervised.
k. Employee Relations: Promoting and maintaining satisfactory human relations,
morale and effectiveness or subordinates.
l. External Contacts: Personally dealing with individuals or organizations outside
the university.
m. Internal Contacts: Personally dealing with individuals within the university, but
outside the direct line of authority of the position, to coordinate activities and task
accomplishment.
n. Investigation or Fact Finding: Activities undertaken to identify facts, and
develop ideas, designs or processes.
o. Scheduling, Planning and Forecasting: The complexity, variety and nature of
the activities involved in determining and carrying out plans and reports.
p. Establishing Objectives, Policies, Standards, Procedures, and Practices: The
degree of authority to establish standards, and the scope, nature and complexity or
these standards.
q. Effects of Decisions: Making decisions and commitments which impact the
university's resources.
r. Student Relations: Personally dealing with students from routine exchanges of
information to more complex activities such as counseling.

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At the conclusion of the job evaluation process, the compensable factors are weighted. A
numerical total is then derived and each position is assigned a salary grade which has a salary
range A salary range consists of a:
MINIMUM The lowest wage paid to a new employee with limited or no experience in
:
this specific position.
MIDPOIN
The "market" (or average) wage paid to one who is fully qualified.
T:
MAXIMU
The highest wage paid for jobs in the salary grade.
M:

Each salary range has different jobs, e.g. Clerk and Grounds Worker, because they
have the same relative value as determined by job evaluation.

Salary ranges - intentionally overlap from one grade to another. Fully qualified incumbents in a
lower salary grade may be at the high end of their salary range, while the salary of a less
experienced employee in a higher salary grade may be near the minimum of the range. It is thus
thesameormore than the salary of an inexperienced incumbent in a higher rates position possible

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that the salary of an experienced incumbent in a lower rated position will be.

B. How do we establish competitive salaries?

Salary surveys are conducted annually and analyzed to establish and maintain competitive pay
levels with all the markets in which the university competes and recruits, as summarized in the
following exhibit.
SURVEY SOURCES

Employee Group

Mark
et

Salary Surveys

A. Exempt
1. Department
Head and Above

Nation
al

Customized surveys with data form selected

private research universities

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2. Below
Department Head

Regio
nal

Customized surveys with data from selected

private research universities

3. Entry Level

Local

Local surveys for service employees and salary

data from the College Placement Association

Local

Local surveys of selected manufacturing and

service employers (banks, insurance, health care,
etc.)

B. Nonexempt
All Jobs

Specialized surveys as needed for specific jobs, e.g.

plumbers, radiation technicians, etc.
This market data is correlated with the job evaluation results and salary ranges are established.
These ranges are then periodically reviewed and adjusted to reflect changes in the marketplace.
C. How are salaries determined?

Starting salaries of new hires are normally placed within the first quartile of the salary range but
occasionally may go up to the range midpoint to accommodate special recruiting needs. Salary
progression in the range occurs over time, based on the salary budget and employee
performance.
Subsequent to employment, salaries normally change as a result of a promotion, an annual merit
increase or an adjustment to maintain equity.

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Job evaluation form

Job description-

Department-

Job title-

Date-

Sex-

Assesor:
Max
Mental effort:(20)
Dealing with situation
cocentration

Notes

points

10
10

05
07

Training time
Dexterity
Complexity
Basic knowledge

15
10
10
10

10
08
08
06

Respnsibility:(18)
For crash
Intermediate and finish product
Control over cost

04
04
04

01
03
03

For tools
For recrds ets:

03
03

03
01

Physical requirements:(05)

05

04

Working conditions:(12)
Working environment
Hazards

08
04

06
02

Skills:(45)

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Maximum grand total

100

67

JOB CLASSIFICATION

Grade
Points possible

Up to 50

51 to 60

61 to70

71 to 80

Points awarded

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81 to 90 91 to 100

PROCESS OF JOB EVALUATION

Job analysis
The process of obtaining job factors

Job description

Job specification

A statement of
duties,job condition and
responsibilities

A statement of human
qualities required to
perform the job

Job rating
Using a predetermined
system,study the JSs and JDs
and assign relative value or
score to each job.

Salary/wage allocation
Assign a money rate of pay to
each job according to a define
system or sacle

Employee classification
Classify all employees under proper job title
based upon the content of the work they
actually perform
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Job Evaluation Base Compensation Programs

Adequate compensation for work performed is one of the most critical aspects of managing
organizational human and financial resources. The development, implementation and continuity
of a base pay system, to provide employees with pay that is both competitive and equitable, is
essential to organizational success.

Advantages
A base pay system provides an employer with a systematic approach to balance human resource
costs with the ability to attract and keep employees. It assures that the following criteria are
addressed:

Legal compliance with all laws and regulations regarding compensation

Cost effectiveness for the organization

Establishment of pay grades and ranges to provide consistency throughout

the organization

Implementation of a pay system that is internally equitable and externally

competitive

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