Compensation and reward management

Point method job evaluation

Submitted to Sir Ali Abdullah

Submitted by Anum Rafique 08020920-035 BBA 8th (HRM) FMAS

Date of submission 25th April, 2012

University of Gujrat

What is job evaluation and why are we doing it?

Job evaluation is a systematic process for establishing the relative value of job based on consistent judgment. It measure a jobs content against each of the criteria with in the scheme used. It enables us to; Establish a rank of job Incorporate the principle of equal pay for the work of equal value Define job relationship Provide an understanding of job and the organization Give a solid foundation for a pay structure

Point Method Job Evaluation

Job evaluation is a systematic method by which compensation professionals compare jobs to determine pay rates that are internally equitable and externally competitive. The point method is a widely used technique in which factors that are important to the job are rated numerically

Compensable Factors
The job evaluation analyst begins by identifying compensable factors which are common across the jobs being evaluated. These are grouped in categories such as skill, responsibilities, effort and working conditions, each with several sub factors. For example, the "skill" category might be divided into experience, education and ability.

Assigning Points
The analyst divides each factor to be used into levels and defines and assigns points to each. For example, he could define the "experience" factor into 5 levels with points distributed as follows: No experience (entry level) = 10 points 1-3 years experience = 30 points 4-6 years experience = 50 points

7-10 years experience = 75 points Over 10 years experience = 100 points The job evaluation analyst continues defining and assigning points to all the compensable factors, distributing points across the levels as determined by the differences between the levels. For example, for the factor "education" the difference in value between "some high school" and "some college" might be much less than the difference in value between "some college" and an "undergraduate degree," thus accounting for the point spread. Some high school = 5 points High school graduate = 15 points Some college = 20 points Undergraduate degree = 60 points Graduate degree = 100 points

Weighting
Once this is done for all the compensable factors to be used, the analyst examines individual jobs to determine which factors are most important, assigning weights to these categories. For example, if an office manager position requires four to six years of experience, it would be assigned a preliminary value of 50 points for this factor. However, if experience is among the most important factors, it might be weighted at 1.5, and thus the final value of the experience factor for the office manager job would be 75 (50 points x 1.5 weighting factor = 75). If the office manager job requires an education level of college graduate, but education is less important, it might be weighted at a smaller number, such as 0.75, resulting in a value of 45 for education (60 points x 0.75 weighting factor = 40). The analyst continues until all factors are rated for the office manager job.

Categorizing the Job

In the final step, the job evaluation analyst totals the points for the office manager job and groups it with other jobs with similar job totals. This group will eventually become the job pay grade, ensuring that even dissimilar jobs can be compared equitably.