9 – Job Evaluation

Introduction

Job evaluation is the result of the job analysis process. The duties of a job, authority connections, skills necessary, working circumstances, and other pertinent facts are all described in a job analysis. On the other hand, job assessment employs the knowledge gleaned through job analysis to assess each job’s components and determine its relative worth. It entails a formal and systematic comparison of jobs to determine the value of one work over another and fix the rate or salary. As a result, it is a procedure for evaluating jobs within a company.

The International Labour Organization (ILO) defines job evaluation as an attempt to determine and compare the demands that the typical execution of a particular job places on ordinary workers without considering individual abilities.

According to Kimball and Kimball, job evaluation is “an attempt to determine the relative value of each position in a facility to determine what the fair basic compensation for such a job should be.”

The process of carefully studying and assessing diverse jobs to determine their relative worth in an organisation is known as job evaluation. After being appraised based on their content, jobs are ranked in order of importance. In this method, a job hierarchy is built into the business to determine a reasonable wage differential between distinct jobs. The job itself is ranked, not the people who hold it.

It is an objectively determined quantitative measurement of relative job worth to establish a consistent wage rate differential. A job’s relative worth refers to the amount of value it generates. Responsibility, skill, effort, and working environment are among the variables associated with value created.

9.1 Objectives of Job Evaluation

The fundamental goal of most job evaluation systems is to define the relative values of different tasks in a specific plant or machinery or to determine a job’s relative worth. The following are some of the goals of job evaluation:

1. To establish a method for determining the relative value of each job in a plant.
2. To get and maintain a thorough, accurate, and impersonal description of each job or vocation across the plant.
3. To ensure that all qualifying employees for progress and transfer are paid at the same rate.
4. Encourage all employees to be considered for growth and transfer fairly and accurately.
5. To give a solid foundation for comparing salary rates for similar employment in the same community and industry.
6. To give data for work organisation, staff selection, placement, training, and various other issues.
7. Determine a reasonable and equitable pay rate for each job in proportion to other jobs in the plant, community, or industry.

9.2 Principles of Job Evaluation Program

These are the principles, according to Kress:

1. Rate the job, not the person.
2. The factors chosen for grading purposes should be as simple as possible to understand and as few as possible to fulfil all work requirements without overlap.
3. The elements should be well-defined and well-chosen.
4. Foremen should take part in job evaluations in their respective divisions.
5. Employees are more likely to cooperate when they are allowed to discuss their work ratings.
6. There should not be too much occupational pay established. Adopting an occupational salary for each total of point values would be unwise.

9.3 Benefits of Job Evaluation

According to an ILO document, job evaluation has the following benefits:

1. The strategy frequently allows new jobs to integrate into the existing wage structure.
2. Job evaluation is rational, and it may help remove inequities in existing compensation structures and maintain stable and consistent wage differentials in a plant or industry.
3. The strategy aids in the resolution of wage-related issues, as well as enhancing labour-management relations and worker morale.
4. The strategy establishes a clear negotiation basis by replacing the many random factors in less systematic wage bargaining methods with more impersonal and objective standards.
5. The strategy may result in better wage rate homogeneity, simplifying wage administration.
6. Based on comparable job requirements, the information gathered during the job definition and analysis process can be used to improve selection, transfer, and promotion procedures.
7. This information also suggests that workers work on tasks requiring less expertise and other traits than they do, implying that the plant’s labour can be used more efficiently.

9.4 Techniques of Job Evaluation

9.4.1 Non-analytical Methods

This strategy does not use detailed work factors. Instead, it considers a job as a whole when determining its relative rating.

1. Method of Ranking: The evaluation committee determines the worth of each task based on its title or, if available, its contents. Each job is compared to others to determine its position. All jobs are organised or rated in order using this system, with each subsequent task being higher or lower than the one before it in the sequence. In general, the five steps are as follows:
   1. Job description preparation: This is crucial when there is disagreement among the people doing the job rankings.
   2. Rater Selection: Typically, occupations are ranked by department or in “clusters” (e.g., factory workers, clerical workers, etc.). This eliminates the need to compare factory and clerical positions side by side. The majority of organisations use a committee of raters.
   3. Rates and essential jobs are chosen: Typically, a set of meaningful occupations or benchmark jobs (10 to 20 jobs that cover all central departments and functions) is assessed first, and then the other jobs are compared to these key jobs to arrive at a ballpark grade.
   4. All jobs are compared to similar positions to get their exact position on the scale. These jobs are then ordered from ‘lowest to highest’ or ‘highest to lowest,’ with the highest and lowest listed first, followed by the next highest and lowest until all cards have been ranked.
   5. Creating a job classification based on a rating: The whole rating is divided into an appropriate number of categories or classifications, usually 8 to 12. All jobs in the same group or classification are paid at the same rate or in a similar range. In most job evaluation systems, each job is ranked relative to other jobs based on the relative relevance of the following five factors:

• Overseeing and leading subordinates.
• Collaboration with associates outside the chain of command.
• Error probability and effects.
• Requirement for a certain level of experience.
• A minimum level of schooling is required.

Merits:

• The system is clear, straightforward, and simple to explain to personnel (or trade union). As a result, it’s best suited to small businesses with well-defined roles.
• It is significantly less expensive to implement than other systems, and it takes little maintenance effort.
• Unless carried to a particular point the organisation uses, it requires less time and effort.

Demerits:

• Because there is no standard for analysing the entire job position, different rates are compared on different grounds. Because the procedure is initially reliant on judgment, it is susceptible to a range of human biases.
• Job requirements (such as skill, effort, and responsibility) are usually not examined independently. Current wage rates frequently significantly impact a rater’s decision.
• The system generates a job order without indicating how significant it is compared to the one below it. It just shows its rank or that it is greater or more difficult than another; however, it does not specify how much higher or more difficult it is.
• The job rating may be subjective because the jobs aren’t divided into elements. It’s challenging to evaluate the entire employment.

2. Method of job classification or grading: It is based on the entire job. The number of grades is established first, then the factors corresponding to these grades are determined. In a schedule, job grades are organised in order of significance. With less and less monitoring, each grade implies a higher level of skill and responsibility. The following five steps are commonly involved in the mechanism:

• Creating a job description provides fundamental job information and is usually based on a job analysis.
• Creating a grade description so that different employment levels or grades can be distinguished. Each grade level must be unique from the grade level next to it while representing a typical step in a continuous progression rather than a significant jump or gap. Each position is given to an appropriate grade level based on the complexity of duties, non-supervisory responsibilities, and supervisory obligations after the grade level has been established.
• Grade and essential job selection: Ten to twenty jobs are chosen, covering all key departments and functions and all grades.
• Grading the key jobs: Each important job is allocated to a grade level, and their relationship to each other is evaluated.
• Job classification: All jobs are categorised according to grade definitions. The exact wage or range of rates is paid to all jobs in the same grade. Menials, for example, may be assigned to one class, clerks to another, junior officers to a higher class, and the top executive to the highest.

Merits:

1. This method is simple to use and understand because it does not take long or require technical assistance.
2. The use of fully specified job classifications satisfies the need for systematic criteria in determining job relevance. This strategy makes it easier for workers to understand rankings because many think of employment in clusters or groups.
3. The classification of jobs makes administrative pay determination concerns easier to solve. All job classifications have pay grades that are decided and assigned.
4. It is widely utilised in critical government services and performs well, but it is rarely used in the private sector.
5. That procedure has the advantages of being simple and affordable.
6. This strategy produces satisfactory outcomes in firms with a limited number of jobs.

Demerits:

1. Job grades are ambiguous and unquantifiable.
2. Difficulty persuading employees that a job belongs in a specific grade requires more job classification because the same timetable cannot be utilised for all sorts of jobs.
3. The system is rigid, making it unsuitable for a large company or a wide range of tasks.
4. It’s impossible to say how much the man on the job influences the job’s rank.
5. Writing a grade description is difficult. As the number of jobs grows, the system becomes more complex.
6. Because no extensive task examination is performed, a judgement made across various jobs could result in an inaccurate classification.

9.4.2 Analytical Procedure

Method of Point Ranking

The approach begins by gathering job factors, creating degrees for each factor, and assigning points to each degree. Different criteria are chosen for different vocations, with corresponding differences in degrees and points.

Mechanism: This system necessitates a thorough investigation of the occupations. The following are the measures to take:

• Step 1: Choose job qualities or criteria.
• Step 2: For each work component, create a scale or yardstick of values.
• Step 3: Use the yardsticks to evaluate all jobs.
• Step 4: Create a pay system.
• Step 5: Make adjustments to the salary structure and run it.

Factors to Consider When Choosing a Job

The point ranking method is more analytical and deals with job components and variables, as opposed to the ranking and grading method, which evaluates the task as a whole. Four job factors are used in general:

• Skill
• Responsibility
• Effort
• The working environment

The number of criteria used differs from one organisation to the next and from one industry to the next. These four factors have several sub-components.

The benefits are as follows:

1. The value of a job is assessed by several aspects rather than simply looking at the job as a whole.
2. The approach is systematic and straightforward to convey to employees.
3. The method is straightforward to comprehend and implement.

One of the two flaws is that employees may disagree with the points allocated and the reasons chosen. Second, major issues about the range of points assigned and how they are matched to grades have been raised.

Method of Factor Comparison

This method considers five factors: mental demand, skill demand, physical exertion, responsibility, and job environment. These variables are expected to be constant for all jobs. Each element is ranked against other jobs on its own. For instance, all professions are compared based on mental requirements, skill requirements, etc. After that, each factor is given a total point value. The value of a task is then calculated by combining all of the points.

One advantage is that tasks with very different natures, such as manual labour, clerical work, and supervisory work, may all be evaluated using the same criteria. However, the procedure is time-consuming and costly.

9.5 Criticisms of Job Evaluation

1. It motivates employees to work toward progress when there is little room for advancement due to downsizing.
2. It promotes an internal focus rather than a customer-centric one.
3. Salaries can be simply fixed by going rates, which can be determined by wages.