Definitions… • Job evaluation is the process of determining the worth of one job in relation to that of the other jobs in a company. • Is a process of determining the relative worth of a job. • An effort to determine the relative value of every job in an organization. • A practical technique to judge the size one job relative to others.
ILO definition “an attempt to determine and compare 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”. Confusing….
It simply means…. Studying / analyzing the value, importance, and necessity of a particular job… Key factors considered for Job evaluation are: • Volume of Responsibilities • Output / deliverables • General / Specialty • Decision makers / decision followers • Emerging needs of the company
Objectives of Job Evaluation • To gather data and information relating to JD, job specification and employee specifications of various jobs in an organization. • To compare the duties, responsibilities and demands of a job with that of other jobs. • To determine the hierarchy /rank based on jobs in an organization. • To ensure equal wages are fixed to the jobs of equal worth or value. • To minimize wage discrimination based on sex, age, caste, region, religion etc.
Importance of JE • • • Helps in Wage & Salary fixation Helps in Recruitment & Selection Ensures fair distribution of rewards Helps in mitigating grievances Improves labour management relations
Advantages of Job evaluation • • • Reduction in inequalities in salary structure - the main objective of job evaluation is to have external and internal consistency in salary structure so that inequalities in salaries are reduced. Specialization - an attempt is made to define a job and thereby fix salaries for it. This is possible only through job evaluation. Helps in selection of employees - The job evaluation information can be helpful at the time of selection of candidates. The factors that are determined for job evaluation can be taken into account while selecting the employees. Harmonious relationship between employees and manager - Through job evaluation, harmonious and congenial relations can be maintained between employees and management, so that all kinds of salaries controversies can be minimized. Standardization - The process of determining the salary differentials for different jobs become standardized through job evaluation. This helps in bringing uniformity into salary structure. Relevance of new jobs - Through job evaluation, one can understand the relative value of new jobs in a concern.
Procedure in Job evaluation • HR takes the lead in this exercise with approval from the management. • Analyze and prepare job description (JA, JD, JS) • Select and prepare a JE plan (job should be divided into detailed tasks and positions) • Classify jobs (assigning money values to each class) • Install / roll out the program • Maintain / upgrade the program.
Job Analysis Job Evaluation Pay Policies Pay Surveys Pay Structure Individual Pay Performance Appraisal Implementation, Communication, Monitoring
Principles of Job evaluation • Rate the job but not the employee. • Elements / tasks selected should be easily understood, defined clearly and properly selected. • Employee concerned and supervisors should be educated and convinced about the program. • Supervisors should be encouraged to participate in rating the jobs. • Encourage employee cooperation to participate in the rating program. • Consensus with the supervisors and employees on rating. • Should be a collective effort, chance for equal representation from all departments.
Job Evaluation : Perspective & Design • Results of Job Analysis & Job Description serve as input for evaluating jobs & establishing job structure input • Job Evaluation involves the systematic evaluation of the Job Description based on many factors: – – Content of the work Relative value of the work to the organization Culture of the work place External market forces
Job Evaluation : Methods • 4 fundamental JE methods: 4 fundamental JE methods 1. Ranking – whole job is compared against other whole jobs on some Ranking general notion of value / job content 2. Classification – concepts of value / work content are divided into Classification categories / classes & jobs are slotted into these categories 3. Factor comparison – content & value are broken down into factors Factor comparison & jobs are evaluated by the degree of each factor the job possesses. 4. Point plan – content and value are broken down into factors and Point plan jobs and evaluated by the degree of each factor the job possesses
Job Evaluation : Ranking Method • Rankings of jobs according to relative value • Involves ordering of Job Descriptions from highest to lowest in value ordering of Job Descriptions • 2 ways of ranking usually considered 1. Alternation ranking 2. Paired comparison • Disadvantages: Disadvantages – – – Criteria / factors on which jobs are ranked are usually so crudely defined that evaluations become subjective Evaluator(s) using this method must be knowledgeable about every single job under study Number alone can make this task formidable (50 jobs will require 1225 paired comparison!!)
Job Evaluation : Alternation Ranking Jobs • • Ordering the job descriptions alternatively at each extreme (all extreme jobs are considered) Eg. of Eg. alternation ranking No. Title Rank Most Valued 1 Welder Tool maker 2 Machine operator 3 Packer 4 Grinder 5 Unit assembler 6 Janitor 7 Tool maker 8 Spray painter 9 Engine operator Grinder 10 Inspector Packer Welder Least Valued
Job Evaluation : Paired Comparison • • • Comparing all possible pairs of jobs Eg. If you have 5 jobs Eg. then there are 10 paired comparisons Jobs with highest total no. of “Most Valuable” ranking Valuable becomes the highestranked job. Job Numbers 1 1 2 B 3 B 4 A 5 B 6 A 7 A 8 B 9 B 2 3 4 5 6 7 8 9 A A B B A A A B A = Better B = Worse
Job Evaluation : Classification Method • Slotting Job Descriptions into a series of classes / grades that grades cover the range of jobs – Classes: a series of carefully labeled slots Classes – Labels are the class descriptions that serve as the standard against which the Job Descriptions are compared • Steps: 1. 2. 3. 4. 5. 6. Determine jobs Conduct Job Analysis / prepare Job Descriptions Select evaluators Define classes Identify & slot benchmarks Prepare classification manual
Job Evaluation : Factor Comparison Method • • A scientific method designed to rank job roles based on a breakdown of factors rather than the role as a whole. The ultimate goal of this is to assign the relative parts of each job role a financial value i. e. the amount of compensation offered for that part of the role. Jobs are evaluated based upon 2 criteria: 2 criteria a. b. A set of compensable factors Wages for a select set of jobs More sophisticated than the previous 2 methods, however, its complexity sophisticated often limits usefulness Basic Steps: 1. 2. 3. 4. 5. 6. 7. Conduct Job Analysis Select benchmark jobs Rank benchmark jobs on each factor benchmark jobs Allocate benchmark wages across factors Compare factor & wage allocation ranks Conduct the job comparison scale Applying the scale
Job Evaluation: Factor Comparison The hourly rate is divided into pay for each of the following factors: Hourly Rate (In Rs. ) Job . Pay Pay for Respo Pay for Working for Skill for Effort nsibility Conditions Secretary 60 35 10 10 5 Admin Assistant 70 45 10 10 5 Superviso r 75 15 35 15 10 Manager 80 15 15 45 5
Job Evaluation : Point Method • 3 common chs: 1. 2. 3. • Compensable factors Factor degrees numerically scales Weights reflecting relative importance of each factor Steps in designing the point plan: a. b. c. d. e. f. Conduct Job Analysis Choose compensable factors Establish factor scales Derive factor weights Prepare evaluation manual Apply to benchmark jobs
Job Evaluation : Point Method • Example – Characteristics of Point Job Evaluation method, Factors, Scaled Degrees, Weights - Weights Compensable Factors Deg rees (3) (1) (2) 40% Skills Required 2 30% Effort Required 3 20% Responsibility 3 10% Working Conditions 1 Here in this example, a Job ‘X’’s 240 total points may result from: • 2 degrees of skills required = • 3 degrees of effort required = • 3 degrees of responsibility required = • 1 degree of working conditions = • TOTAL 2 X 40 3 X 30 3 X 20 1 X 10 = = = 240 80 90 60 10
Packaged Point Plans • These are readymade factor and degree definitions with points assignments for a wide range of jobs. These can be used by the org. with little or no modifications. • Developed by National Metal Traders Association (NMTA) in USA
Hay Guide Chart • A team of management consultants came up with a variation of factor comparison method of JE. • It uses universal factors and bases job values on 15 pc. Intervals, and makes job to job comparison. • Universal factors are – Know-how, problem solving and accountability
Contd. • Widely used in North America and Europe. • Training in the use of the system takes several days, followed by several months of organizational experience to become proficient in its evaluation style. • All jobs are evaluated not only by the interpretation of the factor descriptions but within the context of all other jobs in the organization.
Contd. • These three factors are broken into following dimensions : 1. Know-how – procedures & techniques, breadth of mgt skills, person to person skill 2. Problem solving – thinking environment & thinking challenge 3. Accountability : freedom of act, impact on results 4. Working conditions