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PRM/U4 Topic 3 Job Evaluation Method

Methods of Job Evaluation

There are many methods by which job evaluation is done.

  1. Ranking / Grading Method: Under ranking method, jobs are organized in descending order of importance with the help of job description and job specification. The ranking of job is done by a committee of experts called raters. The ranking is done at departmental level, for every department the job is ranked in order of importance. The main benefits of this method are that it is simple, easily understood by all concerned and easy to operate, inexpensive and can be used conveniently in small establishments. The limitations include the degree of differences in the jobs. Sometimes it is based on the rater’s general knowledge of the jobs. It is inappropriate for big company with a complex organisational structure.
  2. Factor Comparison / Weight-in-Money Method: In this type of procedure, the jobs are ranked in the following way: Common key elements of different jobs are selected. These selected key elements are weighted and ranked. A monetary value is assigned to each element of all jobs. Then these monetary values of individual jobs are weighted. Then total value of each job is available. The major benefits if this methods are that it is more accurate and systematic as compared to simple ranking method. Different jobs also can be rated on the basis of common factors. The drawbacks of this method comprise that it is complicated, not easily explainable and expensive. Application of weight age and monetary values may involve bias of rankers. It is difficult to install hence not used extensively.
  3. Point Rating Method: In this method, each job is appraised separately, considering each of the job factors such as skill, effort, responsibility and working conditions and combining them into a single point score for each job. Main advantages are that it is analytical in its approach, it gives a quantitative value for each job. Basis and guidelines of valuation are standardized and codified in a user manual. Disadvantages include, manual used for rating the jobs needs periodical revision and update. It is difficult for application and unintelligible for workers.

Procedure of job evaluation:

Though the common objective of job evaluation is to establish the relative worth of jobs in a job hierarchy, there is no common procedure of job evaluation followed by all organizations. As such, the procedure of job evaluation varies from organization to organization. For example, a job e valuation procedure may consist of the eight stages as delineated.

  1. Preliminary Stage:

This is the stage setting for job evaluation programme. In this stage, the required information’s obtained about present arrangements, decisions are made on the need for a new programme or revision of an existing one and a clear cut choice is made of the type of programme is to be used by the organization.

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  1. Planning Stage:

In this stage, the evaluation programme is drawn up and the job holders to be affected are informed. Due arrangements are made for setting up joint working parties and the sample of jobs to be evaluated is selected.

  1. Analysis Stage:

This is the stage when required information about the sample of jobs is collected. This information serves as a basis for the internal and external evaluation of jobs.

  1. Internal Evaluation Stage:

Next to analysis stage is internal evaluation stage. In the internal evaluation stage, the sample of bench-mark jobs are ranked by means of the chosen evaluation scheme as drawn up at the planning stage. Jobs are then graded on the basis of data pending the collection of market rate data. Relative worth of jobs is ascertained by comparing grades between the jobs.

  1. External Evaluation Stage:

In this stage, information is collected on market rates at that time.

  1. Design Stage:

Having ascertained grades for jobs, salary structure is designed in this stage.

  1. Grading Stage:

This is the stage in which different jobs are slotted into the salary structure as designed in the preceding stage 6.

  1. Developing and Maintaining Stage:

This is the final stage in a job evaluation programme. In this stage, procedures for maintaining the salary structure are developed with a view to accommodate inflationary pressures in the salary levels, grading new jobs into the structure and regarding the existing jobs in the light of changes in their responsibilities and market rates.

In India, the Indian Institute of Personnel Management, Kolkata has suggested the following five steps to be taken to develop a job evaluation programme:

  1. Analyze and Prepare Job Description
  2. Select and Prepare a Job Evaluation Programme/Plan
  3. Classify Jobs
  4. Install the Programme
  5. Maintain the Programme

These steps are self-explanatory. Hence are not discussed in detail.

Advantages of job evaluation:

According to an ILO publication job evaluation offers the following advantages:

  1. Job evaluation being a logical process and objective technique helps in developing an equi­table and consistent wage and salary structure based on the relative worth of jobs in an organization.
  2. By eliminating wage differentials within the organization, job evaluation helps in minimizing conflict between labour unions and management and, in turn, helps in promoting harmoni­ous relations between them.
  3. Job evaluation simplifies wage administration by establishing uniformity in wage rates.
  4. It provides a logical basis for wage negotiations and collective bargaining.
  5. In the case of new jobs, job evaluation facilitates spotting them into the existing wage and salary structure.
  6. In the modem times of mechanization, performance depends much on the machines than on the worker himself/herself. In such cases, job evaluation provides the realistic basis for determination of wages.
  7. The information generated by job evaluation may also be used for improvement of selection, transfer and promotion procedures on the basis of comparative job requirements.
  8. Job evaluation rates the job, not the workers. Organizations have large number of jobs with specializations. It is job evaluation here again which helps in rating all these jobs and determining the wages and salary and also removing ambiguity in them.

Drawbacks of job evaluation:

In spite of many advantages, job evaluation suffers from the following drawbacks/limitations:

  1. Job evaluation is susceptible because of human error and subjective judgment. While there is no standard list of factors to be considered for job evaluation, there are some factors that cannot be measured accurately.
  2. There is a variation between wages fixed through job evaluation and market forces. Say Kerr and Fisher, the jobs which tend to rate high as compared with the market are those of junior, nurse and typist, while craft rates are relatively low. Weaker groups are better served by an evaluation plan than by the market, the former places the emphasis not on force but on equity”.
  3. When job evaluation is applied for the first time in an organisation, it creates doubts in the minds of workers whose jobs are evaluated and trade unions that it may do away with collective bargaining for fixing wage rates.
  4. Job evaluation methods being lacking in scientific basis are often looked upon as suspicious about the efficacy of methods of job evaluation.
  5. Job evaluation is a time-consuming process requiring specialized technical personnel to undertake it and, thus, is likely to be costly also.
  6. Job evaluation is not found suitable for establishing the relative worth of the managerial jobs which are skill-oriented. But, these skills cannot be measured in quantitative terms.
  7. Given the changes in job contents and work conditions, frequent evaluation of jobs is essential. This is not always so easy and simple.
  8. Job evaluation leads to frequent and substantial changes in wage and salary structures. This, in turn, creates financial burden on organization.

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