Presented By: Amit Pradhan

Job Evaluation: Concept

Job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs in an organization. British Institute of Management defines Job evaluation as the process of analysis and assessment of jobs to ascertain reliably their relative worth, using the assessment as a basis for a balanced wage structure.

Job Evaluation Vs Performance Appraisal

Point Job Evaluation Performance Appraisal

Define

Find the relative worth of a job.

Find the worth of a job holder.

Aim

Determine wage rates for different jobs.

How much a job is worth.

Determine incentives and rewards for superior performance.

How well an individual is doing an assigned work.

Shows

Features
It tries to assess job, not people. The standards of job evaluation are relative, not absolute. The basic information on which job evaluation are made is obtained from job analysis. Job evaluations are carried out by groups, not by individuals. Job evaluation does not fix pay scales, but merely provides a basis for evaluating a rational wage structure. It provides a benchmark for comparing job structures and facilitates career planning.

Procedure of Job Evaluation

Procedure of Job Evaluation

Job analysis & Job description

Job classification

Job pricing

Job Evaluation Method

Ranking Method Grading Method Point Method Factor Comparison Method

Ranking Method

What is being done?

Jobs are compared to each other based on the overall worth of the job to the organization. Merits: o The method is quite simple and easy to understand. Employees can understand it easily. o It is the most suitable method for small size organization. o It does not require much cost. Hence less expensive. o It is less time consuming. Few forms are to be filled up by the rater.

Demerits: o Ranking is done on subjective judgement. o There is every liklihood of bias judgement in ranking of jobs. o It is silent on how the one job is different from another. o It only gives rank but does not specify the degree of importance attached to each job.

Grading Method
It is a non-quantitative method. Also known as Job classification method. Acc. to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades such as executives, skilled, semi-skilled, unskilled or class I, II,III, IV etc.

Merits: o This method is quite simple and can be easily understood by the employees. o It is flexible method. o It can be applied to large number a variety of jobs. o It is used in grading of government services. o If there is a growth in number of jobs, they can be easily fit in the grades that already exist. Demerits: o With the increase in jobs, their grading becomes difficult. o The method relies heavily on job title instead of detailed verification of job contents.

Point Method
Under this system a manual is prepared highlighting the various factors such as education, skill, competence, knowledge, training, responsibility, job conditions, complexity, hazards, coordination, physical and mental efforts, mechanical ability, etc. The comparative weighing of these factors against each other determines the degree of their importance. The suitable point value is then assigned to each factor. The job is then evaluated on the basis of sum total of these points contained in it. The point value is assigned to each degree.

Merits: o It provides numerical base for determining wage differentials. o It is a systematic method of job evaluation. o It is less manipulative and free from human bias. o It makes possible to place jobs in different categories. o The scales developed in the process can be used for long time. o Assigning points to the factors make it possible to assign money values to the points. o It is more suitable method where large number of jobs exist i.e. in large organizations.

Demerits: o It is very expensive method and hence it is not suitable for small organizations. o It is time consuming. To determine job factors and their comparative advantage consume lot of time. o Assigning point value to the factors is also difficult. o It is not simple to understand. o A lot of clerical work is involved in recording rating scales.

In spite of its demerits the point method is widely used by the organizations because of its precision

Factor Comparison Method

Mostly used in evaluating professional and managerial positions. Combination of ranking and point methods. Each job is ranked for each compensable factor separately. Each job factor is broadly defined. The most common factor used in Job evaluation include skills, physical and mental requirements, working conditions and responsibilities and other such factors (solving abilities, accountability, etc).

Merits: It is a systematic method of evaluating manual, clerical and supervisory positions. It is more objective method of job evaluation. It is a comparative process of rating the jobs against numerical benchmark. It facilitates determining the relative worth of different jobs. This method facilitates association of new jobs introduce in the organization with the grade or class. The validity of this system is greater than any other system.

Demerits: It is highly expensive system of job evaluation. The employees find it difficult to understand. The jobs are evaluated on the basis of comparative analysis. Under this method the job evaluation is done by experts. It is quite difficult to assign weightage to each factor.

Pricing Managerial & Professional Jobs

Goal is to attract and keep good employees. Harder to quantify evaluation. Paid on the basis of ability. More complex and stress incentives over evaluation.

Compensating Executives & Managers

Top executives compensated by: Base pay + Guaranteed Bonus Short term incentives Long term incentives Perks

Can you name some incentives and perks?

Compensating professionals
Job emphasizes creativity and problem solving. Job evaluation is useful.

Compensation Trends
Skill based programs pay for range, depth, and type of skills: Define specific skills. Training system. Competency testing. Flexible work assignments. Broadbanding combines salary grade into a few with wide salary ranges.

Skill-based pay Vs Evaluation-based pay

Competence testing. Effect of job change. Seniority and other factors. Advancement opportunities. SBP may increase productivity and lower labor costs over EBP.

THANK YOU.