Job Evaluation

Dr. Anil Mehta

“Job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs in organisation ”

Definition

features•Tries to assess jobs ,not people

•The standards of job evaluation are relative not absolute

•The basic information is obtained from job analysis

•Carried out by groups, not by individuals

•Provides a basis for a rational wage-structure

Objectives•Establishment of sound wage differentials between jobs

•Discovery and elimination of inequalities

•Establishment of sound wage foundation for incentives and bonus

•Maintenance of consistent wage policy

•Providing ground for negotiation

•Effective means for wage control

•Collection of job facts

Job Evaluation vs Performance Appraisal

Point Job-Evaluation Performance Appraisal

Define Find the selective worth of a job

Find the worth of a job- holder

Aim Determine wage rates for different jobs

Determine incentives and rewards for superior performance

Shows How much a job is worth

How well an individual is doing on assigned jobs

Compulsion Not Compulsory Compulsory

Basis of Rating

Responsibility, qualification, experience, working condition etc.

Performance

Time Before employee is hired

After employee is hired

Purpose To establish satisfactory wage differentials

To effect promotions, offer rewards, award punishments, assess training needs resort to lay offs , transfers etc.

Job-evaluation Program

Wage-Survey

Employee Classification

Job Description Job Specification

Job Analysis

Objectives of Job evaluation

Job Evoluation Process

Steps involved in Job Evaluation

•Gaining acceptance

•Creating job evaluation committee

•Finding the jobs to be evaluated

•Analyzing and preparing job evaluation

•Selecting the method of evaluation

•Classifying the jobs

•Installing the program

•Reviewing periodically

Essentials for success of a job evaluation program

•Compensable factors should represent all the major aspects of job content

•Operating manager must be convinced about the techniques and programs of job evaluation

•Al employees should be provided with complete information about the evaluation techniques and program

•All groups and grades of employees should be covered by the job evaluation program

• Program and technique of job evaluation should be understood by all employees

•The union’s acceptance and support to the program should be obtained

Benefits

•Helps in removing inequalities in existing wage structure

•Facilitates new jobs in fitting them into existing wage structure

•Helps in removing grievances, improves in Labour-management relations and workers morale

• enables wage differences to be purposeful

•Basis for negotiations

•Uniformity in wage structure

•Effective use of Labour

Job Evaluation Methods

1Ranking Method

Array of jobs according to the Ranking Method

Rank Monthly Salaries

1 Accountant Rs 6000

2 Accounts Clark Rs 3600

3 Purchase Assistant Rs 3400

4 Machine Operator Rs 2800

5 Typist Rs 1800

6 Office Boy Rs 1200

Advantages

•Simple and easy to understand

Disadvantage

•Not suitable for big organisation

•Highly subjective

2 Job Classification Method

Advantages

•Cooperatively less subjective

•Easy to understand

•Takes into account all the factors

•Effectively used for verity of jobs

Disadvantages

Oversimplifies sharp differences

Job descriptions are vague and are not quantified

3 Factor Comparison Method

Steps involved

•Select key jobs

•Fond out the factors in terms of which the jobs are evaluated

• Rank the selected jobs

•Assign money value to each factor

•The wage rate of every job is appropriated

•All jobs are compared with the list of key jobs and wage rate is determined

Factors

Key jobs

Daily wages Rate

Physical Effort

Mental effort

Skill Responsibility

Working conditions

Electrician 60 11 (3) 14 (1) 15 (1) 12 (1) 8 (2)

Fitter 50 14 (1) 10 (2) 9 (2) 8 (2) 9 (1)

Welder 40 12 (2) 7 (3) 8 (3) 7 (3) 6 (3)

Cleaner 30 9 (4) 6 (4) 4 (5) 6 (4) 5 (4)

Laborer 25 8 (5) 4 (5) 6 (4) 3 (5) 4 (5)

Factor comparison Method

Advantages

•Analytical and objective

•Relative and valid as each job is compared

Disadvantage

•Difficult to understand

•Same criteria to assess all the jobs is questionable

•Time consuming and costly

4 Point Method

Steps involved

•Select key jobs

•Divide each major factor into a number of sub-factor

•Point out the maximum number of points assigned

•The points are converted into money value

Factor 1 2 3 4 5

Skill 10 20 30 40 50 150

Physical effort 8 16 24 32 40 120

Mental effort 5 10 15 20 25 75

Responsibility 7 14 21 28 35 105

Working conditions 6 12 18 24 30 90

Maximum total points all factors on their importance to job 540

Point values for Degrees Total

Point Values to factors along a scale

Paint range Daily Wage range Job grades of key officials

500-600

600-700

700-800

800-900

900-1000

300-400

400-500

500-600

600-700

700-800

1 Officer

2 Accountant

3 Manager Scale 1

4 Manager Scale 2

5 Manager Scale 3

Conversion of Job Grade Points into Money Value

Advantages

•Superior and widely used

•Systematic

•Reliable

•Minimum of rating error

•Disadvantages

•Complex

•Time consuming

Limitations of Job Evaluation

•Rapid changes in demand, supply and technology

•Substantial differences between job factors and market factors

•Difficult to change initial stage wage fixation

•Doubts and fears

•Financial limitations

•Not exactly scientific difficulty in selecting compensable factors

Certain Guidelines to Conduct Job Evaluation

•Rate the job not to a person

•Strive to collect all the facts accurately

•Look especially the distinguished features of the job and for relationships to other jobs

•Study the job objectively and independently

•Must be conducted systematically

•The results must be fair, rational and unbiased to the individuals being affected