Job

evaluation is a systematic process of analyzing and evaluating the jobs to determine the relative worth of each job in an organization. It forms the basis for designing the compensation management system in an organization. Since the compensation management and the perceived fairness of compensation administration have a big influence on employee morale and satisfaction.

Job evaluation is the evaluation or rating of jobs to determine their positions in the job hierarchy. the evaluation may be achieved through assignment of points or use of some other systematic method for essential job requirements such as skill, experience and responsibility.

-- Bureau of Labor Statistics (USA)

 To

determine relative worth of different jobs in an

organization and providing the basis for the

compensation management system.
To

determine the position and place of a job in the clarify the responsibility and authority manage internal and external consistency in the

organizational hierarchy.
To

associated with each job.

To

compensation.

 To

maintain complete and accurate data

relating to job description and job specification of various jobs.

To

ensure employee satisfaction with respect

to the compensation.
To

avoid discrimination of any kind in wage

administration.
To

provide the basis for classification of new

or changed jobs.

The job dimensions have to be properly selected and should be rated in accordance with the demands of the job.

The dimensions selected for the purpose of rating

should be clearly defined to ensure clear understanding

by the employees.

The evaluation program should be explained and illustrated to the employees at all levels. The employees as well as the supervisors should have confidence in the system of evaluation.

 The

employees must be actively involved in the

evaluation program. This helps develop a sense of trust in the whole exercise.
Market

factors should be taken into

consideration while evaluating jobs. For

example, if there is a scarcity of statisticians in

the job market, this fact has to be given due importance while evaluating the job of a statisticians.

 Preparation Job Job

of a Job Evaluation Plan

Analysis
Description & Job Specification of job dimensions of jobs of the evaluation

Selection

Classification

Implementation Maintenance

Techniques of Job Evaluation

Quantitative

NonQuantitative

Point Rating Method

Factor comparison Method

Decision Band Method

Ranking Method

Job Classification/ Job Grading Method

 Ranking

is the method in which the jobs in an organisation are assessed based on the knowledge, skills, effort and other job dimensions associated with each job. Ranking involves preparation of brief job descriptions and assigning ranks to the jobs in accordance with their worth in the organization. Once the ranking of the jobs is complete, a monetary value is attached to each job. Techniques Of Ranking

Relative Ranking Paired Comparison Ranking Single Factor Ranking

 In

this method of job evaluation, the jobs are classified and graded based on their significance and their worth to the organization, the jobs at various levels in an organization are placed under different grades, which are clearly defined. Grades are formulated on the basis of the nature of the tasks and responsibilities of the jobs. For e.g.:-a grade may comprise jobs like Financial Accountants, Management Accountants, Cost Accountants

In this method, a quantitative point scale is developed to evaluate the jobs. The number of scales to be used and other aspects of implementation are determined by the job evaluation analyst or the human resource function. Steps in Point method

Determine the job factors or compensable factors Determine the sub factors Define the degree statements or profile statements Assign points to factors, sub-factors and degrees (For e.g. if experience is critical to a job, degree I might be 20 points, degree II might be 40 points, degree III-60 points, degree IV -80 points). Preparation of chart Applying point system

 It

is based on the principles of point rating and

ranking.
Steps

involved-

Determining & defining specific factors(4 to 7)

Identify key or bench mark jobs

Comparison and ranking of various factors upon

their importance

Assigning monetary values and adding up to pay of the bench mark job and evaluation.

It is more popular in both public & private firms for more than 25 years. It was developed by Prof. Emeritus Thomas T. Paterson in 1970s and further developed & refined by Ernst & Youngs compensation specialist in client organisation. The basic premise of DBM is that the value of a job depends on its decision-making requirements. Decision-making is logical and equitable basis for comparing jobs because all jobs involved decision-making on all levels. The DBM distinguishes six levels of decision making or decision-bands", ranging from the most far reaching decisions on organizational goals to the simplest decisions, such as how fast to key-enter data. The DBM job evaluation produces a decisionbased structure.

It is logical and objective method of ranking and grading jobs for the purpose of compensation management.

It helps in preventing & removing discrepancies in the wage structure of an organization.

It helps in maintaining higher worker satisfaction level by logical explanation of issues related to job differentials

It facilitates the entry of new jobs into the organizational wage structure and help in appropriate evaluation and pay structure fixation accordingly.

It helps in comparison of organizations wage structure with that of competitors and market rates.

It helps in decisions related to selection, transfer and promotion of employees.

Changes in jobs and its factors can render job evaluation techniques outdated and irrelevant.

It can give rise to employee grievance if not properly

formulated or implemented.

It introduces rigidity into the pay system and reduces opportunities for mangers top exercise discretion.

It takes long time to implement and may involve

formalization of rules leading mismatch b/w financial

condition of firm and established wage structure.