Grading method is also known as ‘classification method’. This method of job evaluation was made popular by the U.S. Civil Service Commission. Under this method, job grades or classes are established by an authorized body or committee appointed for this purpose. A job grade is defined as a group of different jobs of similar difficulty or requiring similar skills to perform them. Job grades are determined on the basis of information derived from job analysis.
The grades or classes are created by identifying some common denominator such as skills, knowledge and responsibilities. The example of job grades may include, depending on the type of jobs the organization offers, skilled, unskilled, account clerk, clerk-cum-typist, steno typist, office superintendent, laboratory assistant and so on.
Once the grades are established, each job is then placed into its appropriate grade or class depending on how well its characteristics fit in a grade. In this way, a series of job grades is created. Then, different wage/salary rate is fixed for each grade.
The main merits of grading method of job evaluation are:
- This method is easy to understand and simple to operate.
- It is economical and, therefore, suitable for small organisations.
- The grouping of jobs into classifications makes pay determination problems easy to administer.
- This method is useful for Government jobs.
- The method suffers from personal bias of the committee members.
- It cannot deal with complex jobs which will not fit neatly into one grade.
- This method is rarely used in an industry.