What is Job Evaluation, Process, Advantage, and Methods?

What is Job Evaluation:

An organizational job evaluation is a method for assessing whether a job has value in comparison with other jobs. An attempt is made to compare jobs in a systematic way to establish a rational salary scale by assessing their relative value. It is important to distinguish between job evaluation and job analysis.

Organizing information about a job is called job analysis. In order to provide facts about the jobs under consideration, each job evaluation method must include at least some basic job analysis. As such, job evaluations begin with a job analysis and end with determining the worth of a job in order to achieve pay equity among jobs.

Job Evaluation Steps:

Achieving Acceptance: Managers must be provided with clear and concise information regarding the purpose and use of job evaluation, emphasizing its benefits. The legal and employee relations environment, as well as company culture, may influence whether employees and unions are consulted. Among the possible ways of further developing the program would be to provide presentations that detail the inputs, processes, and outputs/benefits of job evaluation.

Establishing a Job Evaluation Committee: In an organization, the key jobs cannot be evaluated by one person. To get the job evaluation process started, a job evaluation committee is typically formed. It is made up of experienced employees, union representatives, and HR experts.

Identifying the Jobs for Evaluation: Work Not all jobs need to be analyzed. Analyzing all jobs could prove costly and time-consuming. Each department may need to identify certain critical tasks. Ensure that the jobs picked up represent the types of work performed at the various levels in that department while you are picking up them.

Analyze and Prepare Job Descriptions: An analysis of job specifications, as well as a job description, are required for the successful performance of the position.

Choosing an Evaluation Method: It is necessary to identify the method for evaluating jobs while considering both organizational needs as well as job factors. In addition to considering the company culture, compensation and benefits functions and job evaluation committees need to also be considered.

Job Evaluation: By applying the job evaluation method, it is possible to determine the relative importance of various jobs in an organization. You can rank jobs using this method by comparing each to a level description, or you can rank jobs by ranking a set of jobs. The qualification of factor-based methods requires taking into consideration a variety of compensable factors (criteria).

These include the level and breadth of responsibilities, knowledge and skill requirements, complexity, impacts, accountability, etc. There is no need to give a numerical score to these factor comparisons. When numerical scoring is used, scores can be assigned to each factor, and weights can be assigned to each factor. There is a correlation between the levels of factors, which results in a total score. Grade levels are assigned according to all methods.

An Overview of Job Evaluation Methods:

The objective of job evaluation is to determine the relative value of each job in order to establish salary differences between them. As opposed to performance appraisals, in which only job holders are rated, job evaluations utilize only jobs for rating. A number of methods are commonly used for job evaluations. The following are some methods.

• Ranking System.
• Job Classification or Grading Method.
• Rating System Based on Points.
• Factor Comparison System.

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Using these methods, each job in the organization will be ranked according to its relative value, and a hierarchy will reflect this.

Method First: Ranking System

This method of evaluating job performance is among the simplest. A job rater in this system does not assign points to each job but rather ranks them against each other. Organizations usually arrange jobs in reverse order, from the most challenging to the easiest. The job value is not measured but merely established by their ranks. In this method, two jobs are compared one against another and the job rater asks the more difficult job to be selected.

After the first two jobs have been compared and determined, another is compared and determined. Each job is determined until the relative positions have all been determined for all the jobs. Each department ranks its employees, and the rankings of the departments are combined to form the organization's ranking. The jobs are not divided into weighted categories. In small firms, where all jobs are well known, the ranking method is usually used to evaluate job performance. This method is useful for evaluating job performance at an early stage.

• In this system, a job can only be classified as harder than another, but not in what way. A comparison of one job to another is not possible with this method.
• Evaluations do not take into account job requirements, job specifications, or employee characteristics.
• Rankings are also subject to subjective judgment since there is no consistent or definite standard. The order of jobs is all we know, so we don't know how far they are apart. A systematic and comprehensive approach would have been more useful.

Method Second: Job Classification or Grading Method

Grades or job classifications are more sophisticated than job rankings, yet they are not particularly precise. In this process, all jobs are classified by common sense, skill, responsibility, and experience. Jobs are categorized by class. It will be done by a committee. An outline of the responsibilities and nature of work for each class is written. In accordance with the organization's class description, each job is assigned the grade or class that best suits them. Salaries are indexed according to a class or grade with maximum and minimum ranges. Accordingly, clerks could be put into one class, supervisors in another, and higher executives into the top class.

• Understanding and using this method is fairly straightforward.
• This is not a time-consuming process, and it doesn't require any technical assistance.
• A systematic organizational structure can be established this way.
• The process is a lot more detailed than ranking.
• A lot more factors are considered since there are so many factors involved with the job.
• However, this method has several limitations despite its above-mentioned merits:
• However, it does take the views of trade union representatives into account, though sometimes it seems arbitrary.
• This method can make describing grades and classes difficult.

Method Third:  Rating System Based on Points

Compared with ranking and classification, the point-based rating system is more sophisticated. By breaking down work into various compensable factors and weighing or assigning points to them, this method is analytical. When a compensable factor is applied to a group of jobs, it indicates a value that appears frequently across them. The compensable factors are assigned numerical values in this method, so it is quantitative.

A cumulative index of job value is calculated by determining the number of points assigned to the different factors and each degree of the factors involved in jobs, and when the total of these points is calculated, the overall index of job value will be determined. Job analysis determines what factors contribute to job value. Implementation of this system involves six steps, and it is usually set up by an evaluation committee or by an individual analyst.

• Determine What Factors are Critical: These are the critical factors. They are divided into sub-factors based on work effort, responsibility, experience, and working conditions.
• Establish the Levels of Factors: In order to account for the differences in responsibility between jobs or other factors, the point system creates several levels for each factor. Levels can be divided into four categories: minimum, low, moderate, and high.
• Assign Points for the Sub-Factors: Subfactors are subjectively rated by the job evaluation committee. It gets many points, for instance, if safety (100) is twice as important as helping trainees (50).
• Assign Points to the Levels: Analysts allocate points across each row to reflect the importance of each job element once the maximum total points for each job element have been assigned under level IV.
• Developing Points Manually: Afterward, an analyst develops a manual with written descriptions for every element of the job. As well as defining what is expected for each subfactor, it outlines four levels.
• Implementing the Point System: The relative value of each job can be determined when the point matrix and manual have been completed. The total points for the job are determined by adding up the points for each sub-factor. A ranking is developed after all of the points have been calculated for each job.

Performance Appraisal Vs Job Evaluation

Method Fourth: Factor Comparison System

The factor comparison method of evaluating jobs was developed by Thomas E. Hitten. A monetary scale is used to determine how important the jobs are relative to each other. Typically, it is used to evaluate the performance of administrators and white-collar workers. Point systems are a combination of ranking systems and rating systems. The factors comparison system is comprised of the following steps:

• Establishing standards for certain jobs by selecting some of them as benchmarks.
• Determine which elements are critical to certain jobs.
• Assessing the crucial jobs according to the criteria.
• Analyzing each job's important factors.
• Determining the importance of each factor in terms of wages.

Advantage of Job Evaluation:  

• It involves assessing each job's real worth with the assistance of an expert. The result is a wage policy that is both systematic and reasonable.
• In most workplaces, wages are not subject to disputes or grievances. There is a convenient means of resolving any disputes that may arise by using the job evaluation machinery.
• Because pay for each job is determined by the job evaluation, the management can control labor costs effectively.
• In addition to building up employee morale, this system will result in job satisfaction by rewarding employees based on their suitability.
• Employees are therefore selected for the right jobs based on their qualifications. Additionally, this system makes it easier to plan training programs for workers based on a logical basis.
• Due to a careful job evaluation program, wage rates are set by experts rather than management, thereby avoiding personal bias, favoritism, and arbitrary judgment.
• Various job measures are well defined under this system. The fact that different scales exist for different jobs also helps to justify their existence. Consequently, workers, as well as management, accept it without hesitation.

Disadvantage or Limitations of Job Evaluation:

There are certain disadvantages and limitations associated with job evaluation. Here are some of them:

• It is not a scientific process. In order to reward the job, an evaluation is a systematic procedure rather than a scientific one. There are numerous factors in job evaluation, but none can be determined with certainty.
• Even supervisors have difficulty comprehending most of the techniques.
• This program does not take all factors into consideration.
• Technology, employer values, and aspirations may affect the compensation factors in a wide range.
• Different factors may be assigned different weights by employees, trade union leaders, and management, causing disputes.
• Because job evaluations are based on certain principles and the results are generally ignored by the trade unions, they are viewed with suspicion. Moreover, some methods are difficult for workers to understand. Collective bargaining may disappear with the implementation of job evaluation.
• It takes time to implement a job evaluation system. It is costly and requires specialized personnel.
• It is not possible to establish a standard list of factors to consider in job evaluation, as too many factors are used. Each organization defines its own factors differently. Research shows that many factors are not even valued at all independently by researchers. The result is that wage rates are primarily determined by internal standards and evaluations.