There are three basic methods of job evaluation: (1) ranking, (2) classification, (3) factor

comparison. hile man! variations of these methods e"ist in practice, the three basic
approaches are described here.
Ranking method
#erhaps the simplest method of job evaluation is the ranking method. $ccording to this
method, jobs are arranged from highest to lo%est, in order of their value or merit to the
organi&ation. 'obs can also be arranged according to the relative difficult! in performing
them. The jobs are e"amined as a %hole rather than on the basis of important factors in
the job( the job at the top of the list has the highest value and obviousl! the job at the
bottom of the list %ill have the lo%est value. 'obs are usuall! ranked in each department
and then the department rankings are combined to develop an organi&ational ranking. The
variation in pa!ment of salaries depends on the variation of the nature of the job
performed b! the emplo!ees. The ranking method is simple to understand and practice
and it is best suited for a small organi&ation. )ts simplicit! ho%ever %orks to its
disadvantage in big organi&ations because rankings are difficult to develop in a large,
comple" organi&ation. *oreover, this kind of ranking is highl! subjective in nature and
ma! offend man! emplo!ees. Therefore, a more scientific and fruitful %a! of job
evaluation is called for.
Classification method
$ccording 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. +eparate classes ma! include office, clerical,
managerial, personnel, etc. ,ollo%ing is a brief description of such a classification in an
office.
-lass ) . /"ecutives: ,urther classification under this categor! ma! be 0ffice
*anager, 1eput! office manager, 0ffice superintendent, 1epartmental
supervisor, etc.
-lass )) . +killed %orkers: 2nder this categor! ma! come the #urchasing
assistant, -ashier, 3eceipts clerk, etc.
-lass ))) . +emiskilled %orkers: 2nder this categor! ma! come +tenot!pists,
*achine.operators, +%itchboard operator etc.
-lass )4 . 2nskilled %orkers: This categor! comprises 1aftaris
.
,ile clerks, 0ffice
bo!s, etc.
The job grading method is less subjective %hen compared to the earlier ranking method.
The s!stem is ver! eas! to understand and acceptable to almost all emplo!ees %ithout
hesitation. 0ne strong point in favour of the method is that it takes into account all the
factors that a job comprises. This s!stem can be effectivel! used for a variet! of jobs. The
%eaknesses of the 5rading method are:
/ven %hen the re6uirements of different jobs differ, the! ma! be combined into a
single categor!, depending on the status a job carries.
)t is difficult to %rite all.inclusive descriptions of a grade.
The method oversimplifies sharp differences bet%een different jobs and different
grades.
hen individual job descriptions and grade descriptions do not match %ell, the
evaluators have the tendenc! to classif! the job using their subjective judgements.
Factor comparison method
$ more s!stematic and scientific method of job evaluation is the factor comparison
method. Though it is the most comple" method of all, it is consistent and appreciable.
2nder this method, instead of ranking complete jobs, each job is ranked according to a
series of factors. These factors include mental effort, ph!sical effort, skill needed,
responsibilit!, supervisor! responsibilit!, %orking conditions and other such factors (for
instance, kno%.ho%, problem solving abilities, accountabilit!, etc.). #a! %ill be assigned
in this method b! comparing the %eights of the factors re6uired for each job, i.e., the
present %ages paid for ke! jobs ma! be divided among the factors %eighted b!
importance (the most important factor, for instance, mental effort, receives the highest
%eight). )n other %ords, %ages are assigned to the job in comparison to its ranking on
each job factor.
The steps involved in factor comparison method ma! be briefl! stated thus:
+elect ke! jobs (sa! 17 to 28), representing %age9salar! levels across the
organisation. The selected jobs must represent as man! departments as possible.
,ind the factors in terms of %hich the jobs are evaluated (such as skill, mental
effort, responsibilit!, ph!sical effort, %orking conditions, etc.).
3ank the selected jobs under each factor (b! each and ever! member of the job
evaluation committee) independentl!.
$ssign mone! value to each level of each factor (e"ample: consider problem
solving is one of the factor, %hat level of problem solving is re6uired :basic,
intermediate or advance;) and determine the %age rates for each ke! job.
The %age rate for a job is apportioned along the identified factors.
$ll other jobs are compared %ith the list of ke! jobs and %age rates are
determined. $n e"ample of ho% the factor comparison method %orks is given
belo%:
$fter the %age rate for a job is distributed along the identified and ranked factors, all
other jobs in the department are compared in terms of each factor. +uppose the job of a
<painter< is found to be similar electrician in skill (17), fitter in mental effort (18), %elder
in ph!sical effort (12) cleaner in responsibilit!= (>) and labourer in %orking conditions
(?). The %age rate for this job %ould be (17@18@12@>@?) is?A.j
Point method
This method is %idel! used currentl!. Bere, jobs are e"pressed in terms of ke! factors.
#oints are assigned to each factor after prioriti&ing each factor in order of importance.
The points are summed up to determine the %age rate for the job. 'obs %ith similar point
totals are placed in similar pa! grades. The procedure involved ma! be e"plained thus:
1. +elect ke! jobs. )dentif! the factors common to all the identified jobs such as skill,
effort, responsibilit!, etc.
2. 1ivide each major factor into a number of sub factors. /ach sub factor is defined and
e"pressed clearl! in the order of importance, preferabl! along a scale.
The most fre6uent factors emplo!ed in point s!stems are (i) +kill (ke! factor)( /ducation
and training re6uired, Creadth9depth of e"perience re6uired, +ocial skills re6uired,
#roblem.solving skills, 1egree of discretion9use of judgment, -reative thinking (ii)
3esponsibilit!9$ccountabilit!: Creadth of responsibilit!, +peciali&ed responsibilit!,
-omple"it! of the %ork, 1egree of freedom to act, Dumber and nature of subordinate
staff, /"tent of accountabilit! for e6uipment9plant, /"tent of accountabilit! for
product9materials( (iii) /ffort: *ental demands of a job, #h!sical demands of a job,
1egree of potential stress
The educational re6uirements (sub factor) under the skill (ke! factor) ma! be e"pressed
thus in the order of importance.
3. ,ind the ma"imum number of points assigned to each job (after adding up the point
values of all sub.factors of such a job).
This %ould help in finding the relative %orth of a job. ,or instance, the ma"imum points
assigned to an officer<s job in a bank come to 7?8. The manager<s job, after adding up ke!
factors @ sub factors points, ma! be getting a point value of sa! >78 from the job
evaluation committee. This job is no% priced at a higher level.
4, 0nce the %orth of a job in terms of total points is e"pressed, the points are converted
into mone! values keeping in vie% the hourl!9dail! %age rates. $ %age surve! is usuall!
undertaken to collect %age rates of certain ke! jobs in the organi&ation. Eet<s e"plain this:
Market Pricing
*arket pricing is the process for determining the e"ternal value of jobs, allo%ing !ou to
establish %age and salar! structures and pa! rates that are market sensitive. 'ob matching
session is conducted.