Job Evaluation

Job Evaluation is a systematic process for defining the relative worth or

size of jobs within an organization in order to establish internal
relativities and provide the basis for designing an equitable grade and
pay structure, grading jobs in the structure and managing relativities.
Job evaluation can be analytical or non analytical.

Analytical job evaluation schemes

These are schemes in which decisions about the value or size of jobs
are based on an analysis of the extent to which various defines factors
or elements are present in a job. These factors should be present in all
the jobs to be evaluated and the different levels at which they are
present indicate relative job value. The equal Pay (Amendment)
Regulations (1983) refer to the demands on a worker under various
headings, for instance, efforts, skills, decision.

The most common analytical approach is a points-factor scheme where

there is a ‘Factor Plan’ which defines the factors and their levels and
attaches scores to each level. Following job analysis, scores for each
factor are awarded and then totaled. On completion of an evaluation
program, the total scores for job indicate their rank order. This type of
scheme can meet the requirements of equal value law as long as it is
not in itself discriminatory either in its design or application. To ensure
that equity considerations are catered for in an organization, it is
preferable to cover the key features of each category of job at every
level.
Non-analytical job evaluation scheme
These are schemes in which whole jobs are described and compared in
order to place them in rank order or in a grade without analyzing them
into their constituent parts or elements. The most common non
analytical approach is to match roles as defined in the role profiles to
definitions of grades or bands (this is often referred to as job
classification), or to the role profiles of jobs that have already been
graded. When designing grade structures, however, the initial step may
be to rank the jobs in order of perceived value individual in the job
must not be taken into account. But it should be noted that white
performance is excluded, in today’s more flexible organizations the
tendency is for some people, especially knowledge workers, to have
flexible roles. Individuals may have the scope to enlarge or enrich their
roles and this need to be taken into account when evaluating what they
do, as long as this is appropriate within the context of their basic role.
Roles can not necessarily be separated from the people who carry them
out. It is people who create value, not jobs.

It is necessary to distinguish between the concept of a job and that of a

role.

A job consists of a group of finite tasks to be performed (pieces of

work) and duties to be fulfilled in order to achieve an end-result. Job
descriptions basically list a number of tasks.

A role describes the part played by people in carrying out their work by
working competently and flexibly within the context of the
organization’s culture, structure and processes. Role profiles set out the
behavioral requirements of the role as well as the outcomes expected
of those who perform it.
Concerned with internal relativities

When used within an organization, job evaluation can only assess the
relative size of jobs in that organization. It is not concerned with
external relativities, that is, the relationship between the rates of pay of
jobs in the organization and the rates of pay of comparable jobs
elsewhere (market rates).

Methods
The methods and practices of ordering jobs or positions with respect to
their value or worth to the organization.

1 .Ranking
Ranking This method is one of the simplest to administer. Jobs are
compared to each other based on the overall worth of the job to the
organization. The 'worth' of a job is usually based on judgments of skill,
effort (physical and mental), responsibility (supervisory and fiscal), and
working conditions.
Advantages Disadvantages

 Simple.  Difficult to administer as the number of

 Very effective when there are relatively jobs increases.
few jobs to be evaluated (less than 30).  Rank judgments are subjective.
 Since there is no standard used for
comparison, new jobs would have to be
compared with the existing jobs to
determine its appropriate rank. In
essence, the ranking process would have
to be repeated each time a new job is
added to the organization.
Ranking Methods

1. Ordering Simply place job titles on 3x5 inch index cards then
order the titles by relative importance to the organization.
2. Weighting
3. Paired Comparison

Grouping: - After ranking, the jobs should be grouped to determine the

appropriate salary levels.

2. Classification
Classification Jobs are classified into an existing grade/category
structure or hierarchy. Each level in the grade/category structure has a
description and associated job titles. Each job is assigned to the
grade/category providing the closest match to the job. The
classification of a position is decided by comparing the whole job with
the appropriate job grading standard. To ensure equity in job grading
and wage rates, a common set of job grading standards and
instructions are used. Because of differences in duties, skills and
knowledge, and other aspects of trades and labor jobs, job grading
standards are developed mainly along occupational lines.

The standards do not attempt to describe every work assignment of

each position in the occupation covered. The standards identify and
describe those key characteristics of occupations which are significant
for distinguishing different levels of work. They define these key
characteristics in such a way as to provide a basis for assigning the
appropriate grade level to all positions in the occupation to which the
standards apply.
 Advantages Disadvantages

 Simple.  Classification judgments are subjective.

 The grade/category structure exists  The standard used for comparison (the
independent of the jobs. Therefore, grade/category structure) may have
new jobs can be classified more easily built in biases that would affect certain
than the Ranking Method. groups of employees (females or
minorities).
 Some jobs may appear to fit within
more than one grade/category.

Tips

Use Well Defined Grades/Categories Attempt to define the

grades/categories so that they do not overlap one another. Overlaps in
the descriptions and factors used to identify the grade would lead to
problems when assigning jobs to the grades where there is overlap
between them.

3. Factor Comparison
Factor Comparison A set of compensable factors are identified as
determining the worth of jobs. Typically the number of compensable
factors is small (4 or 5). Examples of compensable factors are:

1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
Next, benchmark jobs are identified. Benchmark jobs should be
selected as having certain characteristics.

1. equitable pay (not overpaid or underpaid)

2. Range of the factors (for each factor, some jobs would be at the
low end of the factor while others would be at the high end of the
factor).

The jobs are then priced and the total pay for each job is divided into
pay for each factor. See example matrix below:
Job Evaluation: Factor Comparison

The hourly rate is divided into pay for each of the following
factors:
Hourly Pay for Pay for Pay for Pay for Working
.
Job Rate Skill Effort Responsibility Conditions

Secretary $9.00 4.50 2.00 2.00 0.50

Admin
$11.00 5.50 2.50 2.50 0.50
Assistant
Supervisor $15.00 6.00 3.50 4.00 1.50
Manager $21.00 9.00 3.50 7.00 1.50

This process establishes the rate of pay for each factor for each
benchmark job. Slight adjustments may need o be made to the matrix
to ensure equitable dollar weighting of the factors.

The other jobs in the organization are then compared with the
benchmark jobs and rates of pay for each factor are summed to
determine the rates of pay for each of the other jobs.

Advantages Disadvantages
  The value of the job is expressed in  The pay for each factor is based on
monetary terms. judgments that are subjective.
 Can be applied to a wide range of jobs.  The standard used for determining the
 Can be applied to newly created jobs. pay for each factor may have build in
biases that would affect certain groups
of employees (females or minorities).

Tips

Few Factors Use a few well identifiable factors.

4. Point Method
Point Method A set of compensable factors are identified as
determining the worth of jobs. Typically the compensable factors
include the major categories of:

1. Skill
2. Responsibilities
3. Effort
4. Working Conditions

These factors can then be further defined.

1. Skill
1. Experience
2. Education
3. Ability
2. Responsibilities
1. Fiscal
2. Supervisory
 3. Effort
1. Mental
2. Physical
4. Working Conditions
1. Location
2. Hazards
3. Extremes in Environment

The point method is an extension of the factor comparison method.

Each factor is then divided into levels or degrees which are then
assigned points. Each job is rated using the job evaluation instrument.
The points for each factor are summed to form a total point score for
the job.

Jobs are then grouped by total point score and assigned to wage/salary
grades so that similarly rated jobs would be placed in the same
wage/salary grade.
Advantages Disadvantages

 The value of the job is expressed in  The pay for each factor is based on
monetary terms. judgments that are subjective.
 Can be applied to a wide range of jobs.  The standard used for determining the
 Can be applied to newly created jobs. pay for each factor may have built-in
biases that would affect certain groups
of employees (females or minorities).

Tips

Factors Use well defined factors.

USES OF Job Evaluation

Compensation the methods and practices of maintaining balance
between interests of operating the company within the fiscal budget
and attracting, developing, retaining, and rewarding high quality staff
through wages and salaries which are competitive with the prevailing
rates for similar employment in the labor markets.

Shaheer Impex
It’s a packaging manufacturing firm, there are total 4 partners who
have invest on equal basis and profit sharing with same equal ratio. Our
main Manufacturing unit is situated in Faisalabad and we have set up
different sales offices outside Punjab as well.

Someone has rightly said that “organization are people and people are
organization” like all other organization’s success is due to the
collective effort of workers and dynamic marketing, management and
sales force. Our firm has a good job structure build on the sound
principals of HRM, the structure defines clear hierarchy in each
department from lower to the top.

As job evaluation means systematically determining relative worth of

job to create job structure, Shaheer Impex has practicised this job
evaluation structure to set up its simple and easy to understand job
structure. Things like goods advance booking, maintaining healthy
account records, labor issues and direct dealing with customers on
phone or visiting their places are key issues.

All these jobs have their special importance individually as well as

collectively. Firm has set up its department and selected the personals
very easefully. The accounting department has its two sun units 1.
Computer based records and 2. Manual record, both types of
accounting procedures has a good coordination that is the key for the
success of the firm.

On the other side marketing and sales forces are working together to
have a good coordinating atmosphere. The higher management is also
trying its level best to cooperate and coordinate with these
departments. Firm’s employees are also enjoying working there and
they also have reasonable amount of salaries and bonus on special
occasions like Eid etc. we can’t say that everything is being done
perfectly at our firm, all the criterias, plans and policies need to be
adjusted as per situation and time demands.

Strengths and Deficiencies

No firm can claim that they have a perfect system regarding anything,
each and every system have its weaknesses and key points. Those are
now discussed in detail in perspective of Shaheer Impex.

Strength
Firm has a simple and easy to understand job structure, the job
hierarchy is closely defined

Everyone knows very clearly “to whom is to answer”, each employee

knows what are the responsibilities and duties.

Easy to evaluate

As the job structure is easily comprehend and understandable, so the

evaluation process is also easy to conduct and exercised.

Skilled workers

Workers at firm though not highly educated and trained, but their large
field experience and knowledge has made the workforce skilled and
master in the specific fields.

Availability of financial resources

Firm has sound financial resources and also has ability to survive it in
the dealing business situations.

Good market Opportunities

Firm’s main business is PVC packaging selling which has a good scope as
it’s an essential item in Home textile Export which is one of the growing
sectors of Pakistan in current decade.

Sound Credit Standing

Firm has a sound credit standing in the financial market. The firms don’t
have to pay any outside debit balance.

No evasion of Tax
Firm is contributing large amounts of tax to the Govt. revenue. Even the
general sales tax registration has also been done and paying 16% GST to
Govt. on every order.

Societal Marketing

Firm is also working for the welfare of the society. We are helping many
charity organizations, school and colleges where the children of poor
and needy people are learning modern arts and knowledge.

Deficiencies: -
Discriminator among customers

All customers are to be treated equally, but sometimes it’s not practical
at Shaheer Impex, especially when customer creates problems in
payments clearance and customers with small orders. Since regular
customers are entertained all the times in same manners.

Huge amount of Debtors

It’s the biggest weakness of firm that has to recover a huge amount of
debt out of huge Textile market, which is the most difficult task to
execute and no doubt the fund has to spend large amount of time and
money to recover this unpaid amount of money from different
customers belonging to different areas of the country.

Mixed up structure

For some reasons we can say that firm’s hierarchical structure is mixed
up, in some situations the workers are unaware of their responsibilities.
Lack of Coordination

Sometimes lack of coordination occurs due to mixed up job structure

which results in losses of both material and time.

Time to come and not to go

At manufacturing unit there is no time to come for labor and not to

leave the work which is considered as big misfortune for the
employees.