Ranking Method

The simplest method of job evaluation is the ranking method. According to this method, jobs are
arranged from highest to lowest, in order of their value or merit to the organization. Jobs also
can be arranged according to the relative difficulty in performing them. The jobs are examined
as a whole rather than on the basis of important factors in the job; and the job at the top of
the list has the highest value and obviously the job at the bottom of the list will have the lowest
value.
Jobs are usually ranked in each department and then the department rankings are combined to
develop an organizational ranking. The following table is a hypothetical illustration of ranking of
jobs.

Table: Array of Jobs according to the Ranking Method

Sr. #
1.

Rank
Accountant

Monthly salaries
Rs 30,000

2.
3.

Accounts clerk
Purchase assistant

Rs 18,000
Rs 1,7000

4.
5.

Machine-operator
Typist

Rs 14,000
Rs 9,000

6.

Office boy

Rs 7,000

The variation in payment of salaries depends on the variation of the nature of the job performed
by the employees. The ranking method is simple to understand and practice and it is best suited
for a small organization. Its simplicity, however, works to its disadvantage in big organizations
because rankings are difficult to develop in a large, complex organization. Moreover, this kind of
ranking is highly subjective in nature and may offend many employees.

Classification Method

According 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. Separate classes may include office, clerical, managerial, personnel, etc. Following
is a brief description of such a classification in an office.

(a) Class I - Executives: Further classification under this category may be Office manager,
Deputy Office manager, Office superintendent, Departmental supervisor, etc.
(b) Class II - Skilled workers: Under this category may come the Purchasing assistant,
Cashier, Receipts clerk, etc.
(c) Class III - Semiskilled workers: this category may include Steno typists, Machineoperators, Switchboard operators, etc.
(d) Class IV - Semiskilled workers: This category comprises File clerks, Office boys, etc.

The job classification method is less subjective when compared to the earlier ranking method.
The system is very easy to understand and acceptable to almost all employees without hesitation.
One strong point in favor of the method is that it takes into account all the factors that a job
comprises. This system can be effectively used for a variety of jobs.

The weaknesses of the job classification method are:

Even when the requirements of different jobs differ, they may be combined into a single
category, depending on the status a job carries.

It is difficult to write all-inclusive descriptions of a grade.

The method oversimplifies sharp differences between different jobs and different grades.

When individual job descriptions and grade descriptions do not match well, the
evaluators have the tendency to classify the job using their subjective judgments.

Factor Comparison Method

A more systematic and scientific method of job evaluation is the factor comparison method.
Though it is the most complex method of all, it is consistent and appreciable. Under this method,
instead of ranking complete jobs, each job is ranked according to a series of factors. These
factors include mental effort, physical effort, skill needed, supervisory responsibility, working
conditions and other relevant factors (for instance, know-how, problem solving abilities,
accountability, etc.). Pay will be assigned in this method by comparing the weights of the factors
required for each job, i.e., the present wages paid for key jobs may be divided among the factors
weighed by importance (the most important factor, for instance, mental effort, receives the
highest weight). In other words, wages are assigned to the job in comparison to its ranking on
each job factor.

The steps involved in factor comparison method may be briefly stated thus:

Select key jobs (say 15 to 20), representing wage/salary levels across the organization.
The selected jobs must represent as many departments as possible.

Find the factors in terms of which the jobs are evaluated (such as skill, mental effort,
responsibility, physical effort, working conditions, etc.).

Rank the selected jobs under each factor (by each and every member of the job
evaluation committee) independently.

Assign money value to each factor and determine the wage rates for each key job.

The wage rate for a job is apportioned along the identified factors.

All other jobs are compared with the list of key jobs and wage rates are determined.

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

Table: Merits and Demerits of Factor Comparison Method

Demerits

Merits

Analytical and objective.

Reliable and valid as each job is

compared with all other jobs in terms

of key factors.

Money values are assigned in a

fair way based on an agreed rank order

Difficult to understand, explain

and operate.
Its use of the same criteria to
assess all jobs is questionable as jobs
differ across and within organizations.
Time consuming and costly.

fixed by the job evaluation committee.

Flexible as there is no upper

limitation on the rating of a factor.

Point method
This quantitative method is widely used currently. Here, jobs are expressed in terms of key
factors. Points are assigned to each factor after prioritizing each factor in the order of
importance. The points are summed up to determine the wage rate for the job. Jobs with similar
point totals are placed in similar pay grades. The procedure involved may be explained thus:
(a) Select key jobs. Identify the factors common to all the identified jobs such as skill, effort,
responsibility, etc.
(b) Divide each major factor into a number of sub factors. Each sub factor is defined and
expressed clearly in the order of importance, preferably along a scale.

The most frequent factors employed in point systems are:

I.

Skill (key factor): Education and training required, Breadth/depth of

experience required, Social skills required, Problem-solving skills, Degree of discretion/use of

judgment, Creative thinking;
II.

Responsibility/Accountability: Breadth of responsibility, Specialized

responsibility, Complexity of the work, Degree of freedom to act, Number and nature of
subordinate staff, Extent of accountability for equipment/plant, Extent of accountability for
product/materials;
III.

Effort: Mental demands of a job, Physical demands of a job, Degree of

potential stress.

The educational requirements (sub factor) under the skill (key factor) may be expressed thus in
the order of importance.
Degre

Define

e
1.

Able to carry out simple calculations; High School educated

2.

Does all the clerical operations; computer literate; graduate

3.

Handles mail, develops contacts, takes initiative and does work independently; post graduate

Assign point values to degrees after fixing a relative value for each key factor.

FACTOR

POINT VALUES TO FACTORS ALONG A SCALE

POINT VALUES FOR DEGREES
1
2
3
4
5

TOTAL

Skill
10
20
30
40
50
Physical effort
8
16
24
32
40
Mental effort
5
10
15
20
25
Responsibility
7
14
21
28
35
Working
6
12
18
24
30
conditions
Maximum total points of all factors depending on their importance to job =

150
120
75
105
90
540

(Bank Officer)

4
Find the maximum number of points assigned to each job (after adding up the point values
of all sub-factors of such a job). This would help in finding the relative worth of a job. For
instance, the maximum points assigned to an officer's job in a bank come to 540. The manager's
job, after adding up key factors + sub factors' points, may be getting a point value of, say 650
from the job evaluation committee. This job is now priced at a higher level.
5
Once the worth of a job in terms of total points is expressed, the points are converted into
money values keeping in view the hourly/daily wage rates. A wage survey, usually, is undertaken
to collect wage rates of certain key jobs in the organization. Let's explain this:
Table: Conversion of Job Grade Points into Money Value

Point
range

Daily wage rate

(Rs)

Job grades of key bank officials

500-600

300-400

Officer

600-700

400-500

Accountant

700-800

500-600

Manager I Scale

800-900

600-700

Manager II Scale

900-1,000

700-800

Manager III Scale

Merits and Demerits

The point method is a superior and widely used method of evaluating jobs. It forces raters to look
into all keys factors and sub-factors of a job. Point values are assigned to all factors in a
systematic way, eliminating bias at every stage. It is reliable because raters using similar criteria
would get more or less similar answers. The methodology underlying the approach contributes
to a minimum of rating error (Robbins, p.361). It accounts for differences in wage rates for
various jobs on the strength of job factors. Jobs may change over time, but the rating scales
established under the point method remain unaffected.

On the negative side, the point method is complex. Preparing a manual for various jobs, fixing
values for key and sub-factors, establishing wage rates for different grades, etc., is a time
consuming process. According to Decenzo and Robbins, the key criteria must be carefully and
clearly identified, degrees of factors have to be agreed upon in terms that mean the same to all
rates, the weight of each criterion has to be established and point values must be assigned to
degrees. This may be too taxing, especially while evaluating managerial jobs where the nature
of work (varied, complex, novel) is such that it cannot be expressed in quantifiable numbers.