CERTIFIED HUMAN RESOURCE

PRACTITIONER
Course Title: Job Evaluation

CONDUCTED BY:
MUHAMMAD USMAN
ZAFAR

Job Evaluation
Job evaluaton is a
systematic way of
determining the
value/worth of a job
in an organisation.

Contents of Presentation
A. Course Overview
B. Introduction to Job Evaluation
C. Job Evaluation Methods
D. Standard Job Evaluation
Systems
E. Installing Process of JE in an
Organization.
Summary

A. Course Overview
Overview:
While market-based pay systems continue to replace internally focused
pay systems, job evaluation remains an important tool in the field of
compensation.
We will guide you through the steps of job evaluation, where jobs are
classified based on their duties and importance. Upon completion of this
course, you will be ready to implement and use a job evaluation
program in your own organization.
Learning Objectives:
Explain the purpose and various uses of job evaluation
Choose a job evaluation methodology that is appropriate for your
organization.
Design a customized Job Evaluation Scheme by choosing compensable
factors to compare jobs.
Use job evaluation scores and labor market rates to determine salary
structures.

B. Introduction to Job Evaluation

Definition

B. Introduction to Job Evaluation

Applications of Job Evaluation

B. Introduction to Job Evaluation

Principals of Job Evaluation

C. Job Evaluation Methods

Basic methods of Job Evaluation

1. Ranking Method
2. Classification Method
3. Factor Comparison Method
4. Point Factor Method
5. Market Pricing Method

C. Job Evaluation Methods

Comparison of Job Evaluation Methods

QUALITATIVEvs.QUANTITATIVE
Ranking
&
Classification

Factor Comparison
&
Point Factor

JOB-TO-JOBvs.JOB-TO-STANDARD
Ranking
&
Factor Comparison

Point Factor
&
Classification

TOTAL JOBvs.SEPARATE FACTOR

COMPARISONS
Ranking
&
Classification

Factor Comparison
&
Point Factor

C. Job Evaluation Methods

1. Job Ranking Method: This method ranks the
jobs in an organization from highest to lowest.

Advantages
Simplest to administer
Easiest to explain
Takes less time
Costs less money

Disadvantages
Adjacent Ranks (equal
Diff.)
Does not
require Job
Analysis
Different
bases of
Comparison
Influenced Raters
Highly Subjective

C. Job Evaluation Methods

Job Ranking Method Recommended Implementation

Steps
Obtain Job Information

Conduct job analysis and secure the adequate information.

Select Raters
Select raters who will make unbiased judgments. Train them in the rating
procedure.
Select Compensable Factor(s)
If judgments are to be reliably comparable, compensable factors must be
selected and defined.
Make sure that raters understand the factors on which jobs are to be
compared.
Rank
Jobs
Straight ranking Ordering Cards, or
Alternation ranking Sorting the list, or
Paired comparison Compare each pair of jobs at least once.
Combine Ratings
Have several raters rank the jobs independently.

C. Job Evaluation Methods

Job Ranking Method Example

If a job is considered to be of a higher value than the one with which it
is being compared, it receives two points;
If it is thought to be equally important, it receives one point;
If it is regarded as less important, no points are awarded.
The scores are added for each job and a rank order is obtained.

C. Job Evaluation Methods

2. Classification Method: The classification
method involves defining a number of classes
or grades of jobs and fitting jobs into them.
Although classification tends to produce more
defensible and acceptable job structures than
ranking, it may substitute flexibility for
precision.
Advantages

Disadvantages

Flexibility (All kinds &

levels )

Difficulty of writing
descriptions

Easy to Communicate

Lower Acceptance

Solves Grading issues

Highly Subjective

C. Job Evaluation Methods

Classification Method Recommended Implementation

Steps
Obtain Job Information
Conduct job analysis and secure the adequate information.
Select Compensable Factor(s)
Review Job descriptions to distill factors that distinguish jobs at different
levels.
Select key jobs at various levels of the organization, rank them, and seek
the factors that distinguish them.
Determine No. of Classes
Select classes depending upon tradition, job diversity, size of organization
and the promotion policies of the organization.
Develop Class Descriptions
Assign the task to the committee
Describe levels of compensable factors that apply to the jobs in a class
Write the descriptions of the two extreme grades first, then those of the
others.
Classify Jobs
Compare job descriptions with class descriptions.

C. Job Evaluation Methods

3. Factor Comparison Method
The original and now little-used factor comparison method
compared jobs factor by factor using a scale of money values to
provide a direct indication of the rate for the job.

Advantages

Disadvantages

Custom Built
Logical
Comparable Results
Use of Monetary Value
Quantifiable

Complicated
Changes in definition of
Key Jobs
Common definitions of
Factors
Biased Rating (monetary
value)

C. Job Evaluation Methods

Factor Comparison Method Recommended

Obtain Job Information
Implementation
Steps
Conduct job analysis and secure the adequate information.
Write Job descriptions in terms of the five universal factors.
Selection
the job evaluation committee selects 15 to 25 key jobs.
The major criterion for selection is the essential correctness of the wage
rate.
Rank Key Jobs
Rank key jobs on each of the chosen factors.
Distribute Wage Rates Across Factors
Decide for each key job how much of its wage rate should be allocated to
each factor.
Compare Vertical and Horizontal Judgments
This involves crosschecking the judgments in steps 3 and 4. If a key job is
assigned the same position in both comparisons, the judgments reinforced
or else it is not a true key job.

C. Job Evaluation Methods

Factor Comparison Method Recommended

Implementation Steps
Construct the Job-Comparison Scale

The job comparison scale incorporates the corrected money distribution

allocations to the key jobs.
Use the Job-Comparison Scale to Evaluate the Remainder
of the Jobs
This is done by comparing the job descriptions of non-key jobs, one factor
at a time, with jobs on the scale to determine the relative position. The
evaluated wage for each non-key job is the sum of the allocations to the
five factors.

C. Job Evaluation Methods

Factor Comparison Method Example

C. Job Evaluation Methods

4. Point Factor Method: This technique involves rating each job
based on several compensable factors. The scores given for each
factor are added to obtain a point total for a job. This is also called
the point-factor method of job evaluation.

Advantages
Stability
Accuracy & Consistency
Acceptance &
Transparency
Many Uses (Grade, Pay
Structure)
Quantifiable

Disadvantages
Complexity
Time Consuming
Expensive

C. Job Evaluation Methods

Point Factor Method Recommended Implementation

Steps
Obtain Job Information
Conduct job analysis and secure the adequate information.
Write Job descriptions
Select Compensable Factors
Compensable Factors refers to the criteria used to provide a basis for
judging job value. The main characteristics of compensable factors;
Universal, Variable, Unique, Observable, Acceptable, Suitable
Define Compensable Factors
Factors must be detailed enough to permit raters to use them as yardsticks
to evaluate jobs.
Determine and Define Factor Degrees
Decide the number of divisions.
Ensure that the divisions are well defined and differentiated.
Assign Points for Factors and Degrees
Only rarely are compensable factors assigned equal weight. It is usually
determined that some factors are more important than others and should
bear more weight.

C. Job Evaluation Methods

3. Multiply the
% assigned to
a factor with
total points in
the plan

1. Rank the
Factors

2. Distribute
100%
weightage
among all
factors in order
of their rank &
importance

4. Divide the
result by total
no. of steps
(degrees)

Example:
Total points possible in the plan = 1,000, Weightage assigned to a
factor = 30%
Total Degrees of the factor = 5.
Maximum value for the concerned factor = 300 points. (0.30 x 1,000 =
300)
Minimum assigned points in the plan = 60 points. (300/5 = 60).
Max. points assigned for each degree of factor:
Degree 1= 60, Degree 2=120, Degree 3: 180, Degree 4=240, Degree 5:
300

C. Job Evaluation Methods

Point Factor Method Recommended Implementation

Steps
Write a Job Evaluation Manual
A job evaluation manual will consolidate the:
factor definitions
degree definitions
point values
The job evaluation manual should also include a review procedure.
Rate the Jobs
When the job evaluation manual is complete, you can begin job rating. Key
jobs are usually rated first. Then, the remaining jobs are rated.

C. Job Evaluation Methods

Point Factor Method Example

C. Job Evaluation Methods

Point Factor Method Application

C. Job Evaluation Methods

5. Market Pricing Method

The term market pricing in its extreme form is used to denote a

process of directly pricing jobs on the basis of external relativities
with no regard to internal relativities. In its crudest form, market
pricing simply means fixing the rate for a job at the level
necessary to recruit or retain someone.

Advantages

Disadvantages

Less Time Consuming

Easy to Implement &
Execute

Ignores Internal Equity

Perpetual Marketplace
inequities
Availability of Reliable Data

Quantifiable

Gender Biased

C. Job Evaluation Methods

5. Market Pricing Method - Example

C. Job Evaluation Methods

Comparison of JE Methods

D. Standard Job Evaluation Systems

Hay Job
Evaluation

Mercer
Patterson
Internation
Job
al Position
Evaluation
Evaluation

D. Standard Job Evaluation Systems

1. Hay System of Job Evaluation - Introduction

The Hay method of job evaluation is generally understood to be a

point plan.
Hays Methodology is the most widely used process in the world
used by more than half the Fortune 500 companies in 90 +
Countries
Applied by both public and private organisations in all sectors.
Can be customizable upto a certain extent.
Hays Job Evaluation Methodology values all jobs against three/four
factors:
Know-How
Problem Solving
Accountability
Working Conditions (optional)

D. Standard Job Evaluation Systems

1. Hay Job Evaluation System Sample Evaluation

D. Standard Job Evaluation Systems

2. Mercer International Position Evaluation Introduction

Mercer IPE method is mostly used in US, Europe, South Asia &
South East Asia.
The major strength of the system lies with its functionality which
allows the users to use qualifying statements instead of
allocating numbers which in turn reduces biasness.
Unlike Hay JE System, the IPE method requires the JE experts to
define businesses and determine the size of organization
before evaluating jobs. This feature allows better benchmarking.
Mercers IPE Methodology values all jobs against four/Five factors:
Impact
Communication
Innovation
Knowledge
Risk (Optional)

D. Standard Job Evaluation Systems

2. Mercer IPE Sample Evaluation

D. Standard Job Evaluation Systems

3. Patterson Job Evaluation System- Introduction

Patterson JE system is a perfect example of Classification method.

The method is most popular in Africa and its acceptability is found
considerably higher due to its simplicity.
The basic premise of the method is that , the value of any job is
depend on the level of its responsibility which is reflected and
measured by the Decision making requirements of the job.
The Patterson Plan is based on six decision Bands:
Band F policy Making
Band E programming
Band D Interpretive
Band C Band Routine
Band B Automatic
Band A Defined

E. Installation Process of JE in an
Organization
1. Prepare

2. Analyse

3. Evaluate

4. Validate

Organizati
onal
Analysis
Identify
Benchmar
k Posts.
Training of
Line
Managers
& Internal
Analysts

Review
existing
JDs
Conduct
Job/Role
Analysis
Fill JAQ,
Role
Clarificatio
n
Document
and/or
prepare
JDs.

Establish
JE Panel
Committe
e
Rank jobs
Get buy-in

Common
Sense
Check
Vertical &
Horizontal
Check
Consistenc
y Check
QA Check
Final
Approval

5.
Communica
te
Announce
the project
Identify
key
players
Gain their
support
Communic
ate
frequently
Encourage
HR to take
ownership
Develop a
set of
frequently
asked
questions

Summary
1. JE Methods

2. Customized JE
System

4. JE Implantation
Steps

Ranking

Selection of Comp.
Factors

Prepare

Classification

Scoring Mechanism

Analyse

Factor Comparison

Choices of Plan

Evaluate

Point Plan

Validate

Market Pricing

Communicate

End of Week 4 (Day 1)