JOB EVALUATION

JOB EVALUATION

Definitions

Job evaluation is the name given to any activity, which sets out to make a systematic comparison between jobs to asses their relative worth, for the purpose of establishing a rational pay structure.

Job evaluation is the process of placing jobs in order of their relative worth so that employees may be paid fairly. It is concerned with the demands and conditions of the job, and not the personal qualities of the individual who is occupying the job.  It refers to the methods and practices of ordering jobs or positions with respect to their value or worth to the organization.

Job evaluation is a systematic determination of the value of each job in relations to other jobs in the organisation. The process is used for designing a pay structure and not for appraising the performance of employees holding the jobs. The general idea of job evaluation is to enumerate the requirements of a job and the jobs contribution to the organization and then classify it according to its importance.

Purpose of Job Evaluation

1. To provide a rational basis for the design and maintenance of an equitable and defensible pay structure
2. To make pay administration easier by reducing the number of separate rates of pay

• To help in management of the relatives existing between jobs in the organisations

1. To enable consistent decisions to be made on grading and rates of pay
2. To harmonize internal rates of pay with those found in other companies
3. To provide means by which a responsible rate of pay can be fixed for new or changed jobs within the company

• To protect employees from arbitrary decisions by management
• To justify wage differentials and hence avoid frequent invocation of grievance procedures

1. To determine and recognize the need to link pay with requirements of the job. It helps to establish the extent to which there is comparable worth between jobs so that equal pay can be provided for work of equal value

Uses of Job Evaluation

• To provide a basis for a simpler, more rational wage structure
• To provide an agreed on means of classifying new or changed jobs
• To provide means of comparing jobs and pay rates with those of other organisations
• To provide basis for employee performance measurements.
• To reduce pay grievances by reducing their scope and providing an agreed on means of resolving disputes
• To provide incentives for employees to strive for higher – level pay
• To provide information for wage negotiations
• To provide data on job relationships for use in internal and external selection, HR planning, career management and other personnel functions

Introducing Job Evaluation

A new altered job evaluation system is a change, which must be very carefully introduced by management because it affects the vital subject of pay. The method of evaluation must be clearly explained to employees and their representatives.

Prerequisites for Effective Evaluation

1. Well defined system of job analysis, job design, job description and job evaluation provide the basis
2. Participation of a recognized union, where one exists, it is an imperative
3. The system should be simple and easy to understand rather than being too technical and complex
4. Labour market survey to ascertain prevailing wage rates/salary levels. This should be done before the job evaluation
5. The job evaluation exercise should not be viewed as an exercise to cut wages or retrench employees
6. There could be a system of steering, implementation and evaluation committees with due representation to recognized unions
7. Employees and union should be aware about the objectives and implications of job evaluation. Communication is essential here.

The first step in a job evaluation program is to gather information on the jobs being evaluated.  Such information is obtained from the current job descriptions.  The job evaluation process then identifies the factor or factors to be used in determining the worth of different jobs to the organization

JOB EVALUATION METHODS

Job evaluation methods can be divided broadly into: –

1. Non – analytical methods
2. Analytical methods

 The non – analytical methods take whole jobs and rank them. They compare whole jobs that may differentiate them.  Non-analytical methods include; job ranking, paired comparisons, job classification, decision banding and internal benchmarking.

The analytical methods break jobs down into their component parts and then compare them factor-by-factor such as the number of subordinates, financial responsibility, qualifications and experience.  They provide a more refined means of measurement than the non-analytical methods. The most widely used analytical methods are the Points Rates Method, Factor Comparison and the Hay –Guide Chart Scheme.

JOB EVALUATION:

THE NON-ANALYTICAL METHODS

1. JOB RANKING.

This method compares whole jobs and does not attempt to assess separately different aspects of the jobs. It determines the position of jobs in a hierarchy by placing them in a rank according to perceptions of their relative size.

Ranking 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.

The basis process in job ranking is to select a representative sample of jobs (so – called benchmarks), prepare basic job descriptions for them, compare them on the basis of the information in the job descriptions and rank them in order of their perceived importance.

Each evaluator’s ranking is discussed in a job evaluation committee, compared with the results obtained by other evaluators and eventually a final rank order is drawn up. The remaining jobs in the organisation are then slotted into the evaluated rank order on a like-for –like basis. Ranking jobs entails having them ordered from the simplest to the most difficult.

Advantages

• It’s the easiest and most simplest method of evaluation
• It’s quick and requires no complicated administration
• It is easily understood
• It is particularly suitable for fairly homogeneous jobs e.g. all clerical, or where it is known that the pay structure is already reasonably satisfactory
• It can be used effectively in smaller organisations with clearly defined jobs.

Disadvantages

• There is no rationale to defend their rank order
• Although the method is easy to understand, the result are difficult to defend as they are based on no standards
• Method is impracticable in large companies or in small companies in which the jobs are varied
• It does not indicate the spaces between positions in the rank order.
• This type of system also referred to as “felt fair evaluation” may provoke industrial tribunal actions
• Difficult to administer as the number of jobs increases.
• 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.

 

2. PAIRED COMPARISON

A refinement of the ranking method is the paired comparison method, in which each job is ranked against every other job, taking a pair of jobs at a time. It is usual to distribute the pairs of jobs among several judges and collate the result on a computer. By showing how many times a job has been given first preference, not only may a rank order be prepared but spacing along the rank order will also be shown. The method enables jobs of different types to be evaluated.   Decisions are analyzed by scoring 2 points for a win; 1 point for a draw and none for a loss.  When all decisions have been made jobs can be listed in points order. Jobs are listed in an order that reflects their number of wins against other jobs.

 

3. JOB CLASSIFICATION / JOB GRADING

This method provides a frame work into which jobs can be fitted. It is decided in advance how many grades or classes of pay shall be created, and the jobs, which should fall into each grade, are defined. The lowest grade, for example will be defined as containing those jobs, which require little skills are closely supervised. With each successive grade skills, knowledge and responsibility increase.

A job grade structure is a set of several job grades across which a population of jobs is spread. Jobs in the same grade will have the same level of basic pay and jobs in different grades will have different levels of basic pay, the differences reflecting the differing level of responsibility in each grade

The committee then reads the specification for job, matching it against various grade definitions until an appropriate grade is found. Eventually every job in the company has been allocated to a grade. The number of grades should be kept to a minimum so that when pay is attached a significant increase occurs on being promoted to a higher grade. A larger number of grades will cause such pay increases to be much smaller. A lot of small differences of pay cause a lot of conflict so a smaller number of job grades is preferred

Advantages.

• Relatively simple, quick and inexpensive
• It attempts to provide some standards for judgment in the form of grade definition
• It is suitable for large worker populations and for decentralized operations in which more complex evaluation systems may not work.

Disadvantages

1. It cannot cope with complex systems with features, which will not fit neatly into one grade. Such a job may seem to have the characteristics of two or more grades. Method is only suited for homogeneous family of jobs
2. Because of the difficulty in (i) above, the original grades tend to be sub-divided into smaller grades, making the scheme more difficult to operate

• The method is less objective than it appears at first sight. It is a crude means of distinguishing between jobs, and is not as widely used for managerial, supervisory, professional and other white collar jobs

 

4. INTERNAL BENCHMARKING

This is what people often do intuitively when they are deciding on the value of jobs. Evaluation by internal benchmarking simply means comparing the job under review with any internal benchmark job which is believed to be properly graded and paid, and slotting the job under consideration into the same grade as the benchmark job. The comparison is made on a whole job basis and not factor by factor.

• The job is simple and quick since it involves comparing one job with another.
• It can produce reasonable results as long as it is based on the comparison of accurate job or role descriptions. But it relies on judgments, which may be entirely subjective and could be hard to justify.
• It is also dependent on the identification of suitable benchmarks, which are properly graded and paid.
• The method cannot be accepted in equal value cases.

Remember:

In the job classification/grade method, predetermined job grades are based on such values as; differences in duties, responsibilities, skills, working conditions and the job – related factors

 

5. DECISION BANDING

Several techniques fit into this category. The concept is that the best single factor of relevance to the value of a job is the level of responsibility for decisions. This responsibility can be measured by the financial value of decisions taken by a jobholder or the time-span of discretion, which measures the time period during which an employee is left unsupervised and taking decisions without the need to report to a manager.

The benefit suggested for these approaches is that is that they are measures suitable for all jobs and thus generate a feeling of fairness that all jobs are being evaluated using the same criterion. This avoids conflicts that might otherwise occur. With these techniques the decision factor is measured for each job and then jobs are listed (ranked) in order of the factor.

JOB EVALUATION:

THE ANALYTICAL METHODS

Analytical methods of job evaluation examine jobs in terms of their principal components and not as whole entities. Such methods require much more time and effort than non – analytical methods and are therefore more costly to operate. But they provide a sounder and more defensible basis of wage and salary administration than non-analytical methods.

 

The basic procedure for introducing a job evaluation analytical method is: –   

• The aims/objectives of the exercise are agreed
• A job evaluation team from the organisation is appointed from amongst its own staff hiring of consultants done.
• Relevant job factors are agreed upon
• Each factor is sub-divided by ‘degrees’ or ‘levels’
• Each factor (and its sub-divisions) is given a weighting
• Points are then allocated to each factor and sub – divisions
• Benchmark jobs are identified
• Detailed job descriptions are written for these jobs
• Each benchmark job is evaluated in accordance with the points system
• Benchmark jobs are ranked according to its score the initial ranking of benchmarks is reviewed to identify any anomalies
• The final benchmark ranking is agreed
• The remaining jobs slotted into the benchmark ranking
• Jobs are grouped within the ranking to isolate possible salary grades or may be allocated a salary scale on the basis of their individual point’s total.

COMPENSABLE FACTORS

Are those factors or characteristics of jobs that are deemed important by the organisation to the extent that it is willing to pay for them. The degree to which a specific job posses these factors determines its relative worth. Therefore, the choice of factors and the weighting given to them will be influenced by the values of the organisation or what it’s considered important when valuing the contribution of people in their roles.

Choice of factors

A factor is a characteristic that occurs to a different degree in the jobs to be evaluated and can be sued as a basis for assessing the relative value of the jobs.

A typical list of Factors would be: –

 

KNOWLEDGE  AND SKILLS ·    Education & training required ·    Breadth/depth of experience required ·    Social skills required ·    Problem – solving skills ·    Degree of discretion/use of judgment ·    Creative thinking	RESPONSIBILITY/ ACCOUNTABILITY ·    Breadth of responsibility ·    Specialized responsibility ·    Complexity of work ·    Degree of freedom to act ·    Number and nature of subordinate staff ·    Extent of accountability for equipment / plant ·    Extent of accountability for product / materials
EFFORT ·    Mental demands of job ·    Physical demands of the job ·    Degree of potential stress	WORKING CONDITIONS ·          Time scale of operations ·          Turbulent or steady – state ·          Amount of necessary travel ·          Diversity of subordinates ·          Pressure from groups ·          Difficult or hazardous surroundings

6. POINT FACTOR RATING

This is a widely used method. A number of factors are first agreed against which jobs can be analyzed. This method uses job scale comparisons. The method is based on the breaking down of jobs into factors or key elements.  These are further broken down into Sub-factors.  Using numerical scales, points are allocated to a job under which is present in the job. The separate factor scores are then added together to give a total score, which represents job size.   A job rating form is used which lists the factors to be considered, the maximum points that can be allocated under each factor and some guidance on the allocation of points within each factor.

ASSIGNING WEIGHTS TO FACTORS

Weights are assigned to each of the factors, sub factors and degrees to reflect their relative importance. The weight assigned varies from job to job. Points progressions is usually arithmetic e.g. 20, 40, 60, 80, 100. Regardless of the techniques used, both past experience and judgment play major roles in assigning weights. Points are assigned arbitrarily.

 

1. Points are then assigned to the compensable factors, sub factors and degrees on the basis of relative importance.

Job title				Job number
Department				Number of jobs
Factor	Extent of application of the factor						Points
Qualification Needed	Master	Degree	BTECH	A-level	KCSE
	15	12	10	5	2
Experience Needed	20 years	15 years	10 years	5 years	2 years
	15	12	10	5	2
Responsibility for resources	2 points per digit of financial value of resource (maximum 16 points)
Supervision (No. supervised)	100+	50+	20+	10+	5+
	20	15	10	7	3
Complexity	Value judgment  (maximum 10 points)
Communication	Critical	Extensive	Important	Normal	Little
	10	8	6	4	2
Decision span	5 years	1 year	1 month	1 week	1 day
	10	7	5	2	1
Physical needs	Heavy	very hot	moderate	slight	clean
and environment	or dirty	or cold	discomfort	adverse	warm
	4	3	2	1	0
Max. total points		100	Points for this job

The method is relatively simple to use and reasonably objective. However the amount of time required developing the point scale is a lot. Efforts should be made to keep the system simple and easily understood by employees

Advantages

• Points schemes provide evaluator with defined yardsticks which help them to be objective and consistent in making judgment
• Method is accepted in equal value cases
• It adapts well to computerization

Disadvantages

• Complex to develop, install and maintain

7. FACTOR COMPARISON METHOD

This method was originated to overcome the perceived inadequacies of the point method. The method is similar to point method except that it involves a monetary scale instead of a point scale.

As with the point method, key jobs are selected. It is essential that the rates of pay of key jobs be viewed as reasonable and fair to all those making evaluations. Compensable factors are also identified.

Unlike the point method, factor comparison method does not break down the compensable factors into sub-factors and degrees. Instead, each compensable factor is ranked according to its importance in each key job-done by assigning a rank to envoy key job on one factor at a time rather than ranking one job at a time on all factors.

 

The next step is to allocate the wage/salary for each job according to the ranking of the factors.

Advantages

• Detailed and specific – jobs are evaluated on a component basis and compared against other jobs.
• Usually easier to develop than the point method
• Tied to external wage rates

Disadvantages

• Difficult to explain to employees
• Not easily adapted to changes in jobs being evaluated

 

8. HAY-GUIDE CHART SCHEME

It has become the most widely used single process for the evaluation of management, professional and technical jobs in existence.  In this method, the basic point’s matrix is a standard one, applicable across organizational and national boundaries. Jobs could be ranked not only in the order of importance within the structure of an organisation, but the distances between the ranks could be determined.

The basic structure of the HAY system is as follows

1. Three – broad factors are employed for the evaluation; know-how, problem solving and accountability, each scored on a Guide Chart
2. Each factor is considered by breadth and depth

• Know-how refers to the knowledge and skills required to attain average acceptable performance. It is knowledge required to do a job.

Know-how is the sum total of every kind of capability or skill, however acquired, needed for acceptable job performance.  Its three dimensions are requirements for:

• Practical procedures, specialised techniques and knowledge within occupational fields,    commercial functions,   and professional or scientific disciplines.
• Integrating and harmonising simultaneous achievement of diversified functions within managerial situations occurring in operating, technical, support or administrative fields. This involves, in some combination, skills in planning, organising, executing, controlling and evaluating and may be exercised consultatively (about management) as well as executively.
• Active, practicing person-to-person skills in work with other people.

Problem – solving refers to the analytical and evaluation aspects of the job.  It is the kind of thinking needed to solve the problems commonly faced.

Problem solving has two dimensions:

• The environment in which thinking takes place.
• The challenge presented by the thinking to be done.

1. Accountability refers to the responsibilities assigned. it has 3 dimensions
   1. Extent of freedom to act
   2. The job impact on end results
   3. Magnitude of the job primarily seen in terms of responsibility for financial results

A fourth factor, WORKING CONDITIONS, is used, as appropriate, for those jobs where hazards, an unpleasant environment, and/or particular physical demands are significant elements.

Within the definitional structure, each Guide Chart has semantic scales which reflect degrees of presence of each element.  Each scale, except for PROBLEM SOLVING, is expandable to reflect the size and complexity of the organisation to which it is applied.   For each factor, the judgment of value is reflected in a single number

After evaluation the Hay system ranks benchmarks jobs in accordance with the points total.

Comparison of job evaluation methods.

The point and factor comparison methods are commonly referred to as quantitative plans because a number or shilling value is ultimately assigned to each job being evaluated.  The job classification and ranking methods are called qualitative or non-quantitative techniques and they compare whole jobs.

The point system and job classification system evaluate jobs against a pre-determined scale or class whereas the factor comparison and job ranking methods evaluate jobs only in comparison to the other positions in the company.