Table of Contents:–
- Meaning of Job Evaluation
- What is Job Evaluation?
- Definition of Job Evaluation
- Objective of Job Evaluation
- Essentials of Successful Job Evaluation
- Process of Job Evaluation
- Features of Job Evaluation
- Difference between Job Evaluation and Performance Appraisal
- Methods of Job Evaluation
Meaning of Job Evaluation
Job evaluation Meaning – Job evaluation is a structured and organised method of assessing jobs. It classifies jobs according to their utility in the organisation. It also helps in designing compensation plans. It generally depends upon compensation variables (skills required for job performance, working conditions and job responsibilities) instead of employees.
For example, the compensation variables for a junior-level engineer may consist of a bachelor’s degree in mechanical engineering, industrial experience of three years, and experience of two years in product testing to ensure quality and consistency.
The group of compensation variables used to determine wage rates varies. Some variables determine hourly wages, some determine salaries, and others evaluate performance on a task basis.
Job evaluation is the process of analysing and assessing the various jobs in a systematic order to ascertain their relative worth in an organization. Based on their content, managers evaluate jobs and place them in order of their importance. In this process, it’s important to note that they rank various jobs, not the job holders. An organization establishes a job hierarchy with the purpose of fixing satisfactory wage differentials among various jobs. It uses a performance appraisal technique to rate job holders.
What is Job Evaluation?
Job evaluation is the output provided by job analysis As sem earlier, Job analysis describes the duties of a job, authority relationships, skills required, conditions of work, and additional relevant information, ob evaluation on the other hand uses the information in job analysis to evaluate each job-valuing its components and ascertaining relative job worth. It involves, in other words, a formal and systematic comparison of jobs to determine the value of one job relative to another, so that a wage or salary hierarchy results. Therefore, the systematic process helps determine the value of any job and its position within an organization.
Job evaluation is the output provided by the job analysis. Job analysis describes the duties of a job, authority relationships, skills required, conditions of work, and additional relevant information, ob evaluation on the other hand uses the information in job analysis to evaluate each job-valuing its components and ascertaining relative job worth. It involves, in other words, a formal and systematic comparison of jobs to determine the value of one job relative to another, so that a wage or salary hierarchy results. Therefore, it is a process through which an organization evaluates jobs.
How to do a job evaluation?
When evaluating jobs, it is important to understand the importance and impact of each job on the organization’s goals and overall functioning. Assessing the relative worth of a given collection of duties and responsibilities to the organisation helps to determine the significance and impact of the tasks concerning the organization’s goals and overall operations. Management adopts this process to maintain high levels of employee productivity and employer satisfaction. It is important to conduct a thorough analysis of job values to ensure fair remuneration. If job values are not studied properly, high-value jobs may receive less compensation than low-value jobs.
When employees realise this activity is happening, they become dissatisfied. As a result, Employees may decrease their level of effort, may potentially leave the organization, or may adopt behaviours that are harmful to the overall functioning of the organization. Today’s business environment pays much attention to the value of a job. An assessment of a job’s value influences the decision on how much should be paid for it. In other words, the payment is based on what a person brings to a job, including their training, education, and experience, provided that these qualifications are relevant to the requirements of the assigned job.
Definition of Job Evaluation
Some of the job evaluation definitions are as follows:
According to Kimball and Steckhan – “Work appraisal is an effort made to evaluate every job in an organization and that such job should have a reasonable basic wage.”
ILO defines job evaluation as – “An attempt to determine and compare demands which the normal performance of a particular job makes on normal workers without taking into account the individual abilities or performance of the workers concerned.”
According to the International Labor Union – “An attempt is made to determine and compare each other the expectations to be expected from an ordinary employee in performing a particular job normally, without taking into account the individual ability and progress of the employee concerned.”
According to Dale Yoder – “Work appraisal is a process which provides stability in estimating the relative study of multiple jobs in an organization. It is truly a job marking process which is not different from the labelling of workers.”
According to Wetzel – “Work appraisal consists of arranging tasks in order of their importance or pay, along with the analysis of employees as explained in standardized terminology.”
According to Atwater Smith – “Work appraisal is the marking of performances according to particular techniques to determine the corresponding value of each work.”
According to Williman R.Spreegel – “Work evaluation is a technique by which one function in a trade or industry is compared and graded or graded by other functions so that it is known that each job requires a worker of some ability.”
Objective of Job Evaluation
The objective of job evaluation is as follows:
1) To regulate the real value of jobs, depending upon a systematic evaluation of job complexity and to perform it autonomously, through a set of pre-determined compensation standards, without considering the characteristics and outcomes of the real job performers.
2) To correlate the jobs with their real value and to decide the complications associated with the job and logical job structure.
3) To render a logical base for equal payment of wages and salaries so that equity is maintained.
4) To arrange the jobs according to their significance based on job functions, liabilities and other concerning factors.
5) To attain and keep thorough information about each job or occupation.
6) To develop a system for regular review of wage rates.
7) To render a standard for employee career planning.
8) To aid the employers in identifying the expandable jobs as well as the removable jobs, if it is required, sometimes jobs are removed because of technological changes. Whenever technology changes, previous jobs like typing or manual adding, become less important and sometimes completely not even required.
Essentials of Successful Job Evaluation
The following measures may be adopted to make the job evaluation programme successful:
(1) The support of top management must be won for the job evaluation programme.
(2) Operating managers should be convinced of the need for and programme of job evaluation. They should be given training in revising and fixing the wages based on job evaluation.
(3) All the employees should be provided with complete information about the objectives, programme and techniques of job evaluation.
(4) Clear and accurate job descriptions should be prepared and jobs should be standardised before starting the evaluation process.
(5) All groups and grades of jobs should be covered in the programme. Similar jobs should be grouped for this purpose.
(6) The acceptance and support of the trade unions should be obtained.
(7) The factors selected for evaluation should be measurable and should represent the job content. These factors should be clearly defined.
(8) The job evaluation programme should not involve unreasonably high costs of installation and administration.
(9) In the evaluation process. the judgement, knowledge, and experience of the human resource department, line managers and outside experts should be pooled together.
(10) The focus should be on rating the job position, not the jobholder.
(11) Job evaluation should be undertaken as an adjunct to collective bargaining.
(12) Job evaluation should not adversely affect the terms and conditions of existing employees
Process of Job Evaluation
The job evaluation process starts with defining the objectives of the evaluation and ends with establishing wage and salary differentials. The main objective of job evaluation is to establish satisfactory salary and wage differentials. It should precede the actual programme of evaluation. It provides job-related data which is useful in drafting job descriptions and job specifications.
The figure given below outlines the job evaluation process. The steps in the job evaluation process are:
Step 1: Identification of Jobs for Evaluation
The initial step of job evaluation is the identification of the jobs to be included in this process. It is a difficult task for an organisation to assess every job the organisation. Hence, it chooses some of the major jobs, which represent a combination of identical jobs for evaluation purposes.
After the identification of jobs, the next task is to decide the factors to be examined. The evaluator is free to evaluate any number of job factors such as physical and mental efforts, attentiveness, communication and leadership skills, knowledge and experience, job difficulty and pressure, etc.
Step 2: Gathering the Relevant Data
In this phase, all the relevant information about the job being evaluated is collected. For this purpose, evaluators may use any of the data collection methods such as questionnaires, observations, interviews, etc.
Step 3: Determination of Job Ranking
Once all the relevant information about a job is examined, an evaluator analyses the extent of availability of the factors selected for the job. Based on the outcome of this analysis, an evaluator evaluates the ratings for every job.
Since many identical factors. are analysed during the process of evaluation, as a result, the ratings represent the relative value of the job concerning other jobs in the organisation.
Step 4: Selection of Benchmark Jobs
Job evaluation has the primary purpose of establishing pay grades for every kind of job. With this view, it becomes important for an organisation to be aware of competitors’ pay grades for jobs at similar levels.
Therefore, it may not be practical for an organisation to guess the comparative pay grades of all the jobs within the organisation itself. For this reason, the evaluators may choose those jobs, which are prevalent in every organisation and are comparable.
These jobs are commonly known as benchmark jobs and act as a tool in establishing the pay grades of different jobs in the organisation.
Step 5: Wage and Salary Surveys
During this step, a survey is organised by the organisation about the pay scales of the benchmark jobs in different organisations belonging to the same industry. These surveys may be organised by an organisation either formally or informally.
Likewise, an organisation may either organise a direct survey to collect the necessary information or utilise the reports published through several professional agencies or magazines.
Based on these surveys, the organisation decides the financial value of each job. Several organisations, sometimes, opt for informal sources such as telephones, newspapers and the Internet for organising salary surveys.
Step 6: Review and Feedback
Changes in the external environment affect organisations constantly and result in changing internal factors as well. For example, technological changes strongly affect job characteristics and demands.
As a result, organisations are pressurised to analyse the jobs regularly to determine their values in the changing environment. It is necessary to take feedback from various stakeholders such as supervisors, managers, job holders, and unions about the different dimensions of job evaluation to enhance the entire process regularly.
Features of Job Evaluation
The main objective of job appraisal is to manage the cost of a job. This cost keeps on changing under the pressure of place, time, and other business factors.
The main features of Job Evaluation are as below:
(i) Job evaluation determines the value of the work. Under this, various factors like efficiency, responsibility, accountability, competency level etc. are taken into account about the job.
(ii) Job evaluation is the outcome of job analysis.
(iii) Work appraisal does not fix salary but constitutes the basis for it. Efforts are made to remove the differences in salary.
(iv) It is an effort to evaluate the job, not the person.
(v) To provide important and detailed information for the determination of salary.
(vi) Job evaluation supports the management to achieve maximum job satisfaction and maximum productivity level.
(vii) Job evaluation is not done by an individual but by a specially qualified team.
Difference between Job Evaluation and Performance Appraisal
The table below brings the difference between job evaluation and performance appraisal to a sharp focus.
Methods of Job Evaluation
Methods of Job evaluation can be categorised into two factors –
- Non-analytical and
In such methods, all the jobs are contrasted against each other without splitting them further and evaluating their various elements. Ranking and job classification methods come under this category because they make no use of detailed job factors. To determine the relative ranking of each job, it is necessary to consider each task as a complete unit.
Various methods are as follows:
- Ranking System
- Job Classification or Grading System
This method tends to arrange and rank the jobs according to their value from the simplest to the toughest or vice versa, in a sequence. It is the most inexpensive, expedient and simplest method of evaluation. There is no need to have a job description, although they are important. At times, a series of grades or zones are developed and all the jobs are organised under that job description. It is very common to organise all the jobs as per their demand by giving them rates and classifying them. Generally, one chooses to rank the jobs as per the ‘whole job’ instead of ranking them based on the number of compensation variables.
The job evaluation committee assesses the worth of each job based on its title or its contents if the latter is available. But the job is not divided into factors or elements. Each job is compared with other jobs and its place is determined. The method has several drawbacks. It may be subjective as the jobs are not broken into factors. It is hard to measure all the jobs.
Advantages of Ranking System
The advantages of the ranking system are as follows:
- It is easy to explain this system to the employees (or a union). Hence, it is an appropriate method for small organisations with well-defined jobs.
- It is cost-effective and needs less administration.
- Less time-consuming, includes few forms and less work, until it is carried out to a detailed level, by the organisation.
Disadvantages of the Ranking System
The disadvantages of the ranking system are as follows:
- The specific job demands like skills, effort and responsibility are usually not evaluated individually. More often, a rater’s judgemental view seems to be heavily affected by current wage rates.
- This system only develops a job sequence but it does not denote to which extent it is more significant than others. It only provides ranks and tells us whether it is higher or more complex than another one, but does not show the gap exactly.
In the job classification method, jobs are grouped into different grades, each grade holding a specific class description and very often a pay scale is also used for making comparisons. It is a strategy of organising a job as per the current responsibility and duty related to the job. The grade descriptions are the results of the preliminary information about the job which is generally taken from job analysis. After formulation and study of the job description and job specification, jobs are categorised into classes or grades which indicate various pay scales. Certain jobs may then be ordered together into a common rank or classification. Basic grade descriptions are specifically written for each job classification, and at the end, these are utilised as a benchmark for allocating a specific pay scale to every job.
As in the ranking method, the job-grading method or job-classification method does not call for a detailed or quantitative analysis of job factors. It is based on the job as a whole. In the classification method, firstly the number of grades is decided and then the factors corresponding to each grade are determined. This systematic approach ensures a clear and organized process of job classification. The facts about the jobs are systematically collected and matched with the respective established grades. The difference between both methods is that the ranking method does not have any evaluation criteria while the classification method has few criteria in the form of job classes or grades.
The main requirement of a job-grading method is to create a grade statement that takes into account noticeable differences in responsibility, skill level, and other job-related characteristics. This is a fundamental requirement to ensure a comprehensive assessment of the job situation. Job grades are arranged hierarchically, according to their level of importance, through the use of a structured schedule. The lowest grade includes jobs that require more manual labour, usually performed under close supervision, but with the lowest level of responsibility. Each succeeding grade reflects an increased level of skill and responsibility, requiring less supervision.
Advantages of Job Classification System
The advantages of the job classification system are as follows:
- As this method does not demand extra time or any kind of technical help, it is simple to understand and operate.
- As a system, job classification allows the administration to deal with different job functions at the same time.
- It easily resolves the pay determination issues by grouping all the jobs into classifications. The pay grades have been set for and assigned to each job classification.
- It includes simplicity and inexpensiveness.
- This method yields satisfactory results where the number of jobs is less in an organisation.
Disadvantages of the Job Classification System
The disadvantages of the job classification system are as follows:
- Job classification influences employee efficiency or performance and their hierarchical relationships. Human resources may be re-deployed and they may face difficulty in adjusting to the new atmosphere and people. It may affect job performance due to changed standards.
- In the absence of detailed job analysis, the judgement concerning the whole job range may provide a wrong categorisation.
- When the number of jobs is more, the job classification system is hard to implement.
- Understanding the influence of a job’s rank by a person on the job is a complex task.
- This system is inflexible and inappropriate for big organisations or for jobs of varied natures.
- Job grade descriptions are vague and fail to provide quantifiable measures.
- One challenge faced is the difficulty in convincing employees about the classification of a job within a specific grade because of the vagueness of grade descriptions.
- To ensure optimal efficiency and fairness, more job classification schedules need to be prepared because a single schedule cannot adequately cater to the diverse range of job types.
The analytical or quantitative method includes the breaking down of jobs into elements and giving a final and overall rank order score for each element. The various analytical methods are as follows:
- Point-Ranking Method
- Factor Comparison Method
- Wage Survey
- Employee Classification
This method starts with the selection of job factors, the construction of degrees for each factor, and the assignment of points to each degree. Different factors are selected for different jobs, with accompanying differences in degrees and points: The National Electrical Manufacturer’s Association (NEMA), USA, has given the factors, degrees and points for rated and salaried jobs.
This is the most common method of job evaluation. Firstly, it recognises the number of compensable factors (i.e., a variety of job characteristics) and secondly, it determines the extent to which each of these factors is available in the job. Each factor holds a different number of points. As soon as the degree of each factor is analysed, the equivalent number of points of each factor is combined and the total value is achieved. This method relies upon the belief that it is possible to give points to individual factors that are important for evaluating the job of an individual. The total of these points gives an idea about the relative importance of rated jobs.
Advantages of the Point Ranking Method
The advantages of the point ranking method are as follows:
- Points are given to each factor which makes it easier to allocate values to the sum of job points.
- This method is easily accepted by the workers.
- The system cannot be manipulated easily.
- A large number of jobs can be handled by this method and it also seems to be stable as long as the factors remain relevant.
Disadvantages of the Point Ranking Method
The disadvantages of the point ranking method are as follows:
- Installation and creation of this system are expensive.
- Due to the extensive process of defining job factors, this method is time-consuming in defining job factors and cumbersome.
- If numerous rates are used, substantial clerical work is required in recording and concluding the rating scales.
- It is not easy to determine the level of factors present within the factors and finally allocate them values.
Factor Comparison Method
Under this method, one begins with the selection of factors, usually of them mental requirements, skill requirements, physical exertion, responsibility, and job conditions. It is assumed that these factors remain constant for all jobs. Each factor is ranked individually with jobs. For example, Different work positions should be evaluated based on mental requirements first of all compared to all jobs. Then skill factors, physical requirements, responsibility and working conditions should be ranked accordingly. Thus, a job may be top-notch in terms of skill but have low physical requirements. To determine the overall worth of a job, the total point values are assigned to each factor and then obtained by adding all the point values together.
An advantage of the factor-comparison method is that jobs of unlike nature may be evaluated with the same set of factors. For example, manual clerical and supervisory. But the method is expensive and complicated.
In this method, jobs are analysed through benchmark values. It involves determining those jobs which include more compensable factors than others. In this case, the analyst or the evaluation committee opts for some ‘key’ or ‘standard’ jobs for which they have clear job descriptions within the organisation and in the competing organisations as well. They also opt for the standard jobs holding pay grades which are agreed upon by both the management and labour. In this method, every job is given a rank, one at a time for each selected compensable factor.
Advantages of Factor Comparison Method
The advantages of the factor comparison method are as follows:
- It is an organised and computable method in which explanatory guidelines are provided.
- To determine a relative value, jobs are compared to other jobs.
- This method can be easily understood by employees.
- There are no limitations on the application of values to each factor.
Disadvantages of Factor Comparison Method
The disadvantages of the factor comparison method are as follows:
- Expensive installation and a bit hard to execute for one who is not familiar with the basics of job evaluation methods.
- Changes take place in wage levels with time, and minor deviations may be modified to align all the jobs.
- When used as a basis for rating, money rates tend to affect the actual rate more than the abstract point.
- The complexity of the system causes hindrances in understanding among all employees.
Now that the job hierarchy has been established with the help of evaluation methods), it is time to wage and salary differentials. Before fixing such differentials, the wage rate must be ascertained so that the wage survey assumes relevance.
The first step in a wage survey is to select key jobs, the duties of which are clearly defined, reasonably stable, and representative of all levels of jobs. Thus, a sample of jobs is created.
Secondly, a sample of companies in the labour market area must be chosen. The labour market for different jobs can vary in scope, ranging from local to regional to national levels.
After selecting both samples, the final step is to obtain accurate wage information, while ensuring the validity of the job comparisons being made. To ensure a detailed job evaluation, it is imperative to carefully analyze, compare, and equate the job content, the individual qualities of the personnel engaged in these roles, and the overall compensation program. This process is essential to gain a deeper understanding and make informed decisions.
The last phase in the job evaluation method is to establish employee classification. Employee classification involves assigning a job title to every employee in the organisation. This task may be easy for roles with well-defined responsibilities, such as a cashier in a bank, etc., but it may be complex for other positions.
When jobs involved are of a family type, employee classification is a difficult task. Examples of job families are typists, clerk-cum-typists, stenographers and secretarial groups. A woman employed in an office may do typing, answer the telephone, sort and distribute the mail, compose routine letters to her boss and so on. Will her designation be receptionist or secretary? The decision is of vital concern both to the employer and the employee.
A job evaluation program involves answering several questions. The major ones are:
(i) Which jobs are to be evaluated?
(ii) Who should evaluate the jobs?
(iii) What training do the evaluators need?
(iv) How much time is involved?
(v) What should be the criteria for evaluation?
(vi) What methods of job evaluation are to be employed?