Job Evaluation

In simple words, job evaluation is the rating of jobs in an organisation.

This is the process of establishing the value or worth of jobs in a job
hierarchy. It attempts to compare the relative intrinsic value or worth
of jobs within an organisation. Thus, job evaluation is a comparative
process.

According to the International Labour Office (ILO) “Job evaluation is

an attempt to determine and compare the demands which the normal
performance of a particular job makes on normal workers, without
taking into account the individual abilities or performance of the
workers concerned”.

The British Institute of Management defines job evaluation as “the

process of analysis and assessment of jobs to ascertain reliably their
negative worth using the assessment as the basis for a balanced wage
structure”. In the words of Kimball and Kimball “Job evaluation is an
effort to determine the relative value of every job in a plant to
determine what the fair basic wage for such a job should be”.

Wendell French defines job evaluation as “a process of determining

the relative worth of the various jobs within the organisation, so that
differential wages may be paid to jobs of different worth. The relative
worth of a job means relative value produced. The variables which are
assumed to be related to value produced are such factors as
responsibility, skill, effort and working conditions”.

Now, we may define job evaluation as a process used to establish the

relative worth of jobs in a job hierarchy. This is important to note that
job evaluation is ranking of job, not job holder. Job holders are rated
through performance appraisal. Job evaluation assumes normal
performance of the job by a worker. Thus, the process ignores
individual abilities of the job holder.

Objectives of job evaluation:

The main objective of job evaluation is to determine relative worth of
different jobs in an organisation to serve as a basis for developing
equitable salary structure. States an ILO Report the aim of the
majority of systems of job evaluation is to establish, on agreed logical
basis, the relative values of different jobs in a given plant or machinery
i.e. it aims at determining the relative worth of a job. The principle
upon which all job evaluation schemes are based is that of describing
and assessing the value of all jobs in the firms in terms of a number of
factors, the relative importance of which varies from job to job.

The objectives of job evaluation, to put in a more orderly

manner are to:
1. Provide a standard procedure for determining the relative worth of
each job in a plant.

2. Determine equitable wage differentials between different jobs in the

organisation.

3. Eliminate wage inequalities.

4. Ensure that like wages are paid to all qualified employees for like
work.
5. Form a basis for fixing incentives and different bonus plans.

6. Serve as a useful reference for setting individual grievances

regarding wage rates.

7. Provide information for work organisation, employees’ selection,

placement, training and numerous other similar problems.

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. Analyse 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 organisation.
2. By eliminating wage differentials within the organisation, 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 mechanisation, 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. Organisations have
large number of jobs with specialisations. 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 specialised

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
organisation.

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

weightage 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.

Summary of job evaluation

Computer Assisted Job Evaluation

Computers can be used to assist directly with the job evaluation process.

There are many types of schemes:

There are two types of computer-assisted systems. First, there are job analysis-

based schemes such as that offered by Link Consultants in which the job

analysis data is either entered direct into the computer or transferred to it from a

paper questionnaire. The computer software applies predetermined rules based

on an algorithm that reflects the organization's evaluation standards to convert

the data into scores for each factor and produce a total score. The algorithm

replicates panel judgements both on job factor levels and overall job score.
Secondly, there are interactive schemes using software such as that supplied by

Pilat UK (Gauge) in which the job holder and his or her manager sit in front of a

PC and are presented with a series of logically interrelated questions forming a

question tree. The answers to these questions lead to a score for each of the

built-in factors in turn and a total score.

There are numerous benefits of computer-assisted job evaluation. Computer-

assisted job evaluation systems can provide for greater consistency. The same
input information will always give the same output result because the
judgemental framework on which the scheme is based (the algorithm), can be
applied consistently to the input data. It offers extensive database capabilities for
sorting, analysing and reporting on the input information and system outputs.
This method speeds up the job evaluation process once the initial design is
complete.

Process of Job Evaluation

The process of job evaluation involves following steps:

Securing acceptance from employees after explaining the purpose and use of job

eCreating job evaluation committee consisting of experienced employees, union

representatives and HR experts.Deciding the job to be evaluated, which may

represent the type of work performed in the organisation.Analysing and preparing

job description.Selecting method of evaluation, according to the job factors and

organisational demand.Classifying the jobs on the basis of weightage and

monetary values. Installing the programme in the whole organisation after

explaining it to employees.Conducting periodical review in the light of changes in

environment from time to time.