Question-1: Definition of Job Evaluation.

Concept of job evaluation:

In simple words, job evaluation is the rating of jobs in an organization. This is the process of
establishing the value or worth of jobs in a job hierarchy. It attempts to compare the relative
intrinsic value or worth of jobs within an organization. Thus, job evaluation is a comparative
process.
A job evaluation is a systematic way of determining the value/worth of a job in relation to
other jobs in an organization. It tries to make a systematic comparison between jobs to assess
their relative worth for the purpose of establishing a rational pay structure.
A job evaluation is the process whereby the relative worth of positions within the
organization is established. The job description is the basis for a job evaluation. The result
consists of assigning jobs to salary grades.

Below are given some important definitions of job evaluation:

According to the International Labour Office (ILO) Job evaluation is an attempt to
determine and compare the 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.
The British Institute of Management defines job evaluation as the process of analysis and
assessment of jobs to ascertain reliably their negative worth using the assessment as the basis
for a balanced wage structure. In the words of Kimball and Kimball Job evaluation is an
effort to determine the relative value of every job in a plant to determine what the fair basic
wage for such a job should be.
Wendell French defines job evaluation as a process of determining the relative worth of the
various jobs within the organization, so that differential wages may be paid to jobs of
different worth. The relative worth of a job means relative value produced. The variables
which are assumed to be related to value produced are such factors as responsibility, skill,
effort and working conditions.
According to Kimball and Kimball, Job evaluation represents an effort to determine the
relative value of every job in a plant and to determine what the fair basic wage for such a job
should be.

Question-2: Difference Between Job Evaluation and Performance Evaluation.

Serial
no.

Job Evaluation

Performance Appraisal

1.

A job evaluation is a systematic way of Performance appraisal is a systematic

determining the value/worth of a job in evaluation by the supervisor or some
relation to other jobs in an organization.
qualified person of an individual worker's
performance.

2.

Job evaluation is used as a basis of wage Performance appraisal is used for

structure.
measuring the merit or performance of an
employee and comparing it with that of
others in the same group the purpose of
performance appraisal is to determine an
employee's worth to the organization.

3.

Job evaluation rates the jobs in order to Performance appraisal rates the man and
determine their worth.
not the job.

4.

The purpose of job evaluation is very The purpose of performance appraisal is to

limitedto determine the worth of the appraise the performance of individuals for
job.
the purpose of promotion, transfer training,
dismissal etc.

5.

Job evaluation is the process of rank Performance appraisal measure employee

ordering the jobs, not the people based on goals, performance, outcomes.
job content.

6.

Job evaluation is done by a committee Performance appraisal is done by the

consisting of specialist in the relevant concerned superiors and other persons who
areas.
know the concerned employee.

7.

Job evaluation is not adopted by all Performance appraisal is undertaken by all

organizations, even the large ones.
organizations on a regular basis be it
formally or informally.

8.

Job is evaluated before the job holder is Performance appraisal is done after the
appointed to perform the job.
employee has performed the job.

9.

One job evaluation is done, it is applicable Performance appraisal is a continuous

over a number of years.
process and is undertaken every year.

Question-3: Process of Job Evaluation.

The process of job evaluation involves the following steps:

Gaining acceptance: Before undertaking job evaluation, top management must explain the
aims and uses of the program to the employees and unions. To elaborate the program further, oral
presentations could be made. Letters, booklets could be used to classify all relevant aspects of
the job evaluation program.

Creating job evaluation committee: It is not possible for a single person to evaluate all the
key jobs in an organization. Usually a job evaluation committee consisting of experienced
employees, union representatives and HR experts is created to set the ball rolling.

Finding the jobs to be evaluated: Every job need not be evaluated. This may be too taxing
and costly. Certain key jobs in each department may be identified. While picking up the jobs,
care must be taken to ensure that they represent the type of work performed in that department.

Analysing and preparing job description: This requires the preparation of a job description
and also an analysis of job needs for successful performance .

Selecting the method of evaluation: The most important method of evaluating the jobs must
be identified now, keeping the job factors as well as organisational demands in mind.

Classifying jobs: The relative worth of various jobs in an organisation may be found out after
arranging jobs in order of importance using criteria such as skill requirements, experience
needed, under which conditions job is performed, type of responsibilities to be shouldered,
degree of supervision needed, the amount of stress caused by the job, etc. Weights can be
assigned to each such factor. When we finally add all the weights, the worth of a job is
determined. The points may then be converted into monetary values.
Installing the programme: once the evaluation process is over and a plan of action is ready,
management must explain it to employees and put it into operation.
Reviewing periodically

In the light of changes in environmental conditions (technology, products, services, etc.) jobs
need to be examined closely. For example, the traditional clerical functions have undergone a
rapid change in sectors like banking, insurance and railways, after computerization. New job
descriptions need to be written and the skill needs of new jobs need to be duly incorporated in
the evaluation process. Otherwise, employees may feel that all the relevant job factors - based on
which their pay has been determined - have not been evaluated properly.
For job evaluation to be practicable it is necessary:

that jobs can be easily identified

that there are sufficient differences between different jobs; and
that agreements know the relative importance or worth of different jobs can be negotiated
between the enterprise and its employees and/or their representatives.

Question 4: Methods of Job Evaluation.

There are four basic methods of job evaluation currently in use which are grouped into two
categories:

1. Non-Analytical Methods:
(a) Ranking or Job Comparison
(b) Grading or Job Classification

2. Analytical Methods:
(a) Point Rating
(b) Factor Comparison
The basic difference between these two methods lies in the sense that, under non-analytical
methods, a job is compared as a whole with other jobs in the organisation, whereas in case of
analytical methods, the key factors of a job are selected and, then, measured. The four methods
of job evaluation are now discussed one by one.

1. Non-Analytical Methods:
Ranking Method:
The ranking method is the simplest form of job evaluation. In this method, each job as a whole is
compared with other and this comparison of jobs goes on until all the jobs have been evaluated
and ranked. All jobs are ranked in the order of their importance from the simplest to the hardest
or from the highest to the lowest.

The importance of order of job is judged in terms of duties, responsibilities and demands on the
job holder. The jobs are ranked according to the whole job rather than a number of
compensable factors. The ranking of jobs in a University, based on Ranking Method, may be like
this:
The application of the Ranking Method involves the following procedure:
1. Analyse and describe jobs, bringing out those aspects which are to be used for purpose of job
comparison.
2. Identify bench-mark jobs (10 to 20 jobs, which include all major departments and functions).
The jobs may be the most and least important jobs, a job midway between the two extremes, and
others at the higher or lower intermediate points.
3. Rank all jobs in the organisation around the bench-mark jobs until all jobs are placed in their
rank order of importance.
4. Finally, divide all the ranked jobs into appropriate groups or classifications by considering the
common features of jobs such as similar duties, skills or training requirements. All the jobs
within a particular group or classification receive the same wage or range of rates.
Ranking method is appropriate for small-size organisations where jobs are simple and few. It is
also suitable for evaluating managerial jobs wherein job contents cannot be measured in
quantitative terms. Ranking method being simple one can be used in the initial stages of job
evaluation in an organisation.

Merits:
Ranking method has the following merits:
1. It is the simplest method.
2. It is quite economical to put it into effect.
3. It is less time consuming and involves little paper work.

Demerits:
The method suffers from the following demerits:
1. The main demerit of the ranking method is that there are no definite standards of judgment and
also there is no way of measuring the differences between jobs.
2. It suffers from its sheer unmanageability when there are a large number of jobs.

Grading Method:
Grading method is also known as classification method. This method of job evaluation was
made popular by the U.S. Civil Service Commission. Under this method, job grades or classes
are established by an authorised body or committee appointed for this purpose. A job grade is
defined as a group of different jobs of similar difficulty or requiring similar skills to perform
them. Job grades are determined on the basis of information derived from job analysis.
The grades or classes are created by identifying some common denominator such as skills,
knowledge and responsibilities. The example of job grades may include, depending on the type
of jobs the organisation offers, skilled, unskilled, account clerk, clerk-cum-typist, steno typist,
office superintendent, laboratory assistant and so on.
Once the grades are established, each job is then placed into its appropriate grade or class
depending on how well its characteristics fit in a grade. In this way, a series of job grades is
created. Then, different wage/salary rate is fixed for each grade.

Merits:
The main merits of grading method of job evaluation are:
1. This method is easy to understand and simple to operate.
2. It is economical and, therefore, suitable for small organisations.
3. The grouping of jobs into classifications makes pay determination problems easy to
administer.
4. This method is useful for Government jobs.

Demerits:
The demerits of this method include:
1. The method suffers from personal bias of the committee members.
2. It cannot deal with complex jobs which will not fit neatly into one grade.
3. This method is rarely used in an industry.

2. Analytical Methods:
Points Rating:
This is the most widely used method of job evaluation. Under this method, jobs are broke down
based on various identifiable factors such as skill, effort, training, knowledge, hazards,
responsibility, etc. Thereafter, points are allocated to each of these factors.
Weights are given to factors depending on their importance to perform the job. Points so
allocated to various factors of a job are then summed. Then, the jobs with similar total of points
are placed in similar pay grades. The sum of points gives an index of the relative significance of
the jobs that are rated.

The procedure involved in determining job points is as follows:

Determine the jobs to be evaluated. Jobs should cover all the major occupational and
levels of responsibility to be covered by the method.

Decide on the factors to be used in analysing and evaluating the jobs. The number of
factors needs to be restricted because too many factors result in an over-complex scheme
with overlap and duplication between factors.

Define the factors clearly in written. This is necessary to ensure that different job raters
interpret a particular factor in the same sense.

Determine degrees of each factor and assign point value to each degree.

Point values are assigned to different degrees on the basis of arithmetic progression.

Finally, money values are assigned to points. For this purpose, points are added to give
the total value of a job. Its value is then translated into money terms with a predetermined
formula.

Merits:
The method has the following merits:
1. It is the most comprehensive and accurate method of job evaluation.
2. Prejudice and human judgment are minimised, i.e. the system cannot be easily manipulated.
3. Being the systematic method, workers of the organisation favour this method.
4. The scales developed in this method can be used for long time.
5. Jobs can be easily placed in distinct categories.

Demerits:
The drawbacks of the method are:
1. It is both time-consuming and expensive method.
2. It is difficult to understand for an average worker.
3. A lot of clerical work is involved in recording rating scales.
4. It is not suitable for managerial jobs wherein the work content is not measurable in quantitative terms.

Factor Comparison Method:

This method is a combination of both ranking and point methods in the sense that it rates jobs by
comparing them and makes analysis by breaking jobs into compensable factors. This system is
usually used to evaluate white collar, professional and managerial positions.
The mechanism for evaluating jobs under this method involves the following steps:
1. First of all, the key or benchmark jobs are selected as standards. The key jobs selected should
have standards contents, well accepted pay rates in the community, and should consist of a
representative cross-section of all jobs that are being evaluated-from the lowest to the highest
paid job, from the most important to the least importantand cover the full range of
requirements of each factor, as agreed upon by a Committee representing workers and
management.
2. The factors common to all jobs are identified, selected and defined precisely. The common
factors to all jobs are usually five, viz., mental requirements, physical requirements, skill
requirements, working conditions and responsibility.
3. Once the key jobs are identified and also the common factors are chosen, the key jobs are,
then, ranked in terms of the selected common factors.
4. The next step is to determine a fair and equitable base rate (usually expressed on an hourly
basis) and, then, allocate this base rate among the five common factors as mentioned earlier.
Following is a specimen of base rate and its allocation scheme:
5. The final step in factor comparison method is to compare and evaluate the remaining jobs in
the organisation.

Merits:
This method enjoys the following merits:
1. It is more objective method of job evaluation.
2. The method is flexible as there is no upper limit on the rating of a factor.
3. It is fairly easy method to explain to employees.
4. The use of limited number of factors (usually five) ensures less chances of overlapping and
over-weighting of factors.
5. It facilitates determining the relative worth of different jobs.
Demerits:
The method, however, suffers from the following drawbacks:
1. It is expensive and time-consuming method.
2. Using the same five factors for evaluating jobs may not always be appropriate because jobs
differ across and within organisations.
3. It is difficult to understand and operate.

Question 5: Point Factor Method.

In the point method (also called point factor) of job evaluation, the organization identifies the
compensable factors and breaks them down into degrees. The organization must also weight the
factors, determine the number of complexity levels or degrees for each factor, and assign points.
The result is that the evaluator assigns a numeric score to a job for each factor based on how
much of that factor appears in the job. The job's total worth is then determined by adding up the
numeric scores across all factors. This procedure, when conducted across all jobs, will result in a
relative ordering of jobs based on the number of points that each job earns.
This is the most widely used method of job evaluation. Under this method, jobs are broke down
based on various identifiable factors such as skill, effort, training, knowledge, hazards,
responsibility, etc. Thereafter, points are allocated to each of these factors.
Weights are given to factors depending on their importance to perform the job. Points so
allocated to various factors of a job are then summed. Then, the jobs with similar total of points
are placed in similar pay grades. The sum of points gives an index of the relative significance of
the jobs that are rated.
Although the point method allows an organization to develop one job evaluation scheme for all
jobs in the organization, this is rarely done for several pragmatic reasons. First, it is difficult to
identify one set of compensable factors that is applicable for all jobs. For example, the use of
working conditions may distinguish among shop jobs, but there is not likely to be any variance
among office jobs on that compensable factor. Second, creating single definitions of factors in
language easily understood by all employees would be nearly impossible. Different operational
definitions would be needed for the same compensable factor for different clusters of jobs. Third,
the fact that different job groups are often anchored to different labor markets cannot be ignored.
In an equity sense, comparison with job families (clusters) within an organization may be less
relevant than comparison with a job family in the relevant labor market. With point methods of
job evaluation, organizations usually have a series of job evaluation plans. For example, there
may be one plan for skilled shop jobs, another plan for unskilled assembly work, and still a third
plan for office and clerical. The point method can evaluate all jobs simultaneously, rather than
limiting evaluation to only key jobs.
STEPS IN THE POINT METHOD
STEP 1: SELECT THE JOB CLUSTER AND THE JOBS TO BE EVALUATED. This is the
same as in other methods of job evaluation.
STEP 2: INPUT JOB INFORMATION. AS with all job evaluation approaches, the jobs must be
analyzed and job descriptions/specifications prepared.

STEP 3: SELECTC OMPENSABLE FACTORS. Just as with other methods or other job
evaluation methods, the point method generally uses a set of factors that has been developed by
others .It has long been accepted that three to five factors are sufficient to capture a desired
criterion structure." additional factors may be merely redundant and do not explain unique
variation in the job structure.
STEP 4: DEFINEC OMFENSABLE FACTORS. In this step, once factors are chosen, the
committee must clearly define what each factor will mean in the context of the job evaluation
plan. The more specific a factor is, the narrower the definition tends to be, and frequently, the
easier the factor is to use. One of the important criteria in determining whether factors are
broadly or narrowly defined is related to the types of jobs covered. If the jobs are from a narrow
job cluster, the factor might be correspondingly narrow.
STEP 5: DEFINFEA CTOR DEGREES. The committee must decide how many degrees
should be on the scale for a given factor or sub factor. There should be adequate degrees to make
meaningful distinctions among jobs. If there are too many degrees, the distinctions may be
meaningless. Also, if no job falls within the degree, the steps are probably too narrowly defined.
Exhibit 8.16 shows one method of defining factor degrees.
STEP 6: DETERMINTEO TAL POINTS IN PLAN. The process for assigning point values to
factors begins with a decision as to how many total points the job evaluation plan will have.
There is no magic number of points that a plan should have.
STEP 7: ASSIGN POINTS TO DEGREE WITHIN FACTORS OR SUBFACTORS. Once
the total number of points and the weight of a factor or sub factor are established, the next step is
to assign points to the degrees within the factors.
STEP 8: EVALUATE JOBS. When key jobs are known, key jobs are evaluated first and then
the unique jobs are evaluated and fit between the key jobs. When key jobs are not known, each
job is evaluated using the newly designed point method and then the validity of job evaluation is
determined by whether the resulting job structure mirrors the pay structure ordering of key jobs
in the labor market.
STEP 9: WRITE THE JOB EVALUATIOMNA NUAL. The results of the committee's
activities must be written up in a job evaluation manual. Without a well- documented job
evaluation plan, the plan is not usable except by the original committee. Documentation of the
committee's work should include the rationale for the factors chosen, the rationale for weighting
the factors, the rationale and procedures for assigning points to factor degrees, and, finally, a
description of the factors, subfactors, and the degrees assigned to each.

Advantages of Point Factor Method

(i)

Most reliable and accurate due to detailed analysis

(ii)

Less chance of subjectivity and judgment after initial grade tables are established.

(iii)

Most widely used

Limitations of Point Factor Method

(i)

Analysis involves experienced persons.

(ii)

Time-consuming in establishing initial grade tables.

(iii)

Subjectivity in initial grade table cannot be totally eliminated.

Question 6: What are the pitfalls of job evaluation?

Job evaluation suffers from many criticisms which include:

a. It encourages employees to focus on how to advance in position in the organization at

the time when there may be only limited opportunities for enhancement as a result of
downsizing.
b. It promotes internal focus
c. It is not suitable for forward looking organization that has trimmed multiple job title
into two or three broad jobs.
d. Elaborated exercise of wage and salary fixation through job evaluation can be
dispensed. Salaries can be fixed by adopting going rates.

Many things that have advantages in this world we are living in also have disadvantages
and that of job evaluation is among the many. The disadvantages of job evaluation are
thus:
(1)
Not a scientific technique: Job evaluation is a systematic technique and not the
scientific technique of rewarding the job. Job evaluation lacks scientific precision
because all factors cannot be measured accurately.
(2)
Problem of adjustment: Though many ways of applying the job evaluation
techniques are available rapid changes in technology and in the supply and demand of
particular spills have given rise to problems of adjustment.

(3)
Unrealistic: Substantial differences exist between job factors and the factors
emphasised in the market. These differences are wider in cases in which the average pay
offered by a company is lower than that prevalent in other companies in the same
industry or in the same geographical area.
(4)
Organisational Limitations: A job evaluation scheme takes a long time to instal.
Il requires specialised personnel and it is costly.
(5)
Opposition by workers: Job evaluation is regarded by the trade unions with
suspicion because it is made on certain principles and results are generally ignored. Some
of the methods of job evaluation are not easily understood by workers. Workers fear that
job evaluation will do away with collective bargaining.
(6)
Subjective: Too many factors are used in job evaluation and moreover there is no
standard list of factors to be considered. Definitions of factors vary from organinsation to
organisation. Many researches show that the factors used are not independently be valued
at all. It gives more reliance on internal standards and evaluation for fixing wage rates.