Quantitative Methods of Job Evaluation

Ranking of Key jobs:

Rank the selected jobs under each factor (by each and every member of the job evaluation committee) independently. Ranking is made individually and then a meeting is held to develop a consensus.

Assign money value:

Money value is assigned to each factor so as to determine the wage rate for each key job. The basic pay for each 'key' job is allocated to each factor. This should reflect a range from the lowest to the highest.

Comparing all jobs with key jobs:

All other jobs are compared with the list of key jobs. This is done to know their relative importance and position in the scale of jobs.

An illustration of how the factor comparison method works is given below:

Table: Allocation of Money Value to the different factors and Ranking of Jobs under the Factor Comparison Method

For example, if toolmaker is a benchmark job and its wage rate is 20 money units; it may be decided to assign nine of these to skill, five to mental requirements, two to physical requirements, three to responsibility and one to working conditions. Similarly, if the wage rate for another benchmark job. for example that of a machinist, amounts to 18 money units, eight of these may be allotted to skill, three to working conditions and so on.

Advantages:

• Factor comparison method permits a more systematic comparison of jobs than the non-analytical methods. It is a systematic, quantifiable method for which detailed step by step instructions are available.

• The system results in more accurate job evaluation as it is more objective because weights are not selected arbitrarily.

• It is flexible as it has no upper limit on rating that a job may receive on a factor.

• The reliability and validity of the system are greater than the same statistical measures obtained from group standardised job analysis plans.

• The procedure of rating new jobs by comparing with other standards or key job is logical and not too difficult to accomplish.

• It utilizes few factors and thereby reduces the likelihood of overlapping.

• t is a scheme that in corporate money value, determination of wage rates is automatic.

Disadvantages:

• This method is comparatively complicated to apply and it is difficult to explain to workers.

• It is costly to install, and somewhat difficult to operate for anyone who is not acquainted with the general nature of job-evaluation techniques.

• The use of present wages for the key jobs may initially create errors into the plan. The contents and the value of these jobs may change over a period of time and they will lead to future errors.

• It goes against the common belief that the procedure of evaluating jobs and fixing their wages should be kept separate.

• The use of five factors is a growth of the technique developed by its organisations. And using the same five factors for all organisation and for all jobs in an organisation may not always be appropriate.

• It is a very expensive method/system of job evaluation because experts have to be appointed particularly in selecting weights which are based in actual analysis.

2. Point Rating Method

This is the most widely used method for job evaluation. It along with factor comparison method, involves a more detailed, quantitative and analytical approach to the measurement of job worth. This method is widely used currently. In this method jobs are expressed in terms of key factors. Then various points are assigned to each factor in order of their importance. Then points are summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades. The point rating procedure has to clearly define from very start. By and large, its steps fall into two distinct stages, namely preparing and evaluation plan and schedule (by defining and weighting factors) and grading jobs by reference to this schedule. This involves the following steps:

• • Listing of Jobs: The jobs have to be determined first which are to be evaluated. They are usually clustered. This should cover all the categories of jobs: skilled, unskilled, semi-skilled, professional, executives etc.

  • Selecting and defining factors: Identify the factors common to all the identified jobs such as skill, effort, responsibility, job conditions etc. There should be sufficient number of factors to evaluate all aspects of the jobs. The number of factors will depend upon the nature of the jobs.

  • Dividing the factors into degree: Once the factors are selected they must be divided into degrees to make them operational. The point method generally uses from four to six degrees for each factor. It is advisable to an even number of degrees in the development of point method and the same number of degrees should be used for each factor in order to maintain consistency in the job evaluation plan.

  • Weighting the factors: The relative importance of each factor selected has to be determined. In other words, the factors must be weighted. There is no scientific or readymade method for weighting factors. It is generally done pragmatically and will depend upon the knowledge of the work of the enterprise. Weighting will also depend on the firm's objectives and policies.

  • Allocations points to each degree: Once the relative importance of the factors has been determined in a preliminary way and the factors suitably divided into degrees, each degree must be assigned a numerical value. These are the values that will be used in determining the total point values of jobs.

  • Evaluation of Jobs: Once the factor plan is adopted, it is usual to prepare an evaluation hand­book explaining the procedure to be followed and summarising all the elements required for evaluation.

  • Assign money value points: For this purpose points are added to give the total value of a job: its value of a job; its value is then translated into terms of money with a pre-determined formula.