JOB EVALUATION

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Bangladesh University of Business and Technology
(BUBT)
Assignment No. ……
Job Evaluation
Course Title: Compensation Management
Course Code:HRM- 405
Submitted To:
Sharmin Sultana
Assistant Professor
Department of Management
(BUBT)
Submitted By:
Group Name:Global Asset
No Name ID Intake Section
1 Tasnim Alom 14153101258 37 6
2 Md Abdul Naym Joarder 14153101261 37 6
3 Maliha Tarannum 14152101500 36 12
4 Jannat Tania 17182101188 45 5
5 Sibli Sakif 17182101192 45 5
6 Md. Sayad Khan 16173101067 43 2

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Summary
By using a job evaluation process in your business organization, you assess the
relative content and value of positions and determine equitable, understandable and
competitive compensation. Job content is evaluated based on work type, skills and
knowledge required; value is evaluated based oneach job's contribution to company
goals. Three of the most commonly used methods of job evaluation, upon which
other methods are based, can be customized to your company's specific needs.

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WRITTEN ASSIGNMENT: JOB EVALUATION
Job evaluation is an assessment of the relative worth of various jobs on the basis of a consistent
set of job and personal factors, such as qualifications and skills required .The objective of job
evaluation is to determine which jobs should get more pay than others. Several methods such as
job ranking, job grading, and factor comparison are employed in job evaluation. Research
indicates, however, that each method is nearly as accurate and reliable as the other in ranking and
pricing different jobs (Mathis & Jackson 2008). By job evaluation, mean using job analysis
information to systematically determine the value of each job in relation to all jobs within the
organization.
1. Meaning of job evaluation:
Job Evaluation (JE) is the analysis and evaluation of work for the purpose of determining the
relative value of each job in an organization. Job evaluation is the basis for fair compensation.
According to Kimball and Kimball, “Job evaluation represents an effort to determine the relative
value of every job in a plant and to determine what the fair basic wage for such a job should be.”
Job evaluation is related to job analysis. Job analysis is the process of describing the duties of a
job, authority relationships, skills required, conditions of work, and additional relevant
information. Job analysis involves creating job descriptions and specifications. Firstly, an analysis
is made of the jobs in the organization, with particular attention given to the tasks and skills
involved in performing them.
International Labor Organization (ILO) has defined job evaluation as follows:

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“Job evaluation is an attempt to determine and compare demands which the normal performance
of a particular job makes on normal workers without taking into account the individual
performance of the workers concerned”.
2. Objectives:
 To ensure fair and equitable wage-structure on the basis of relative worth or value of jobs.
 To determine upon a standard for performance appraisal for determining relative worth of
each job in a plant.
 To form a basis for fixing incentive and different bonus plans.
 To provide information for work organization, employee’s selection, placement training,
career development, etc.
 To provide a framework for periodic review of wages.
 To ensure the competitiveness of the organization in the labor market.
 To justify the existing pay structure to employees.
 To identify a ladder of progression for employees by providing benchmark for career
planning.
 To strengthen compliance with equal pay legislation and regulations that encourages basic
pay on difference in job contents.
 To produce pay structure that reconciles the conflicting demands of internal and external
equity
 To provide a sound basis for merit or pay-for-performance systems.
 To undergo organizational development in times of change.

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3. Features of Job Evaluation:
The primary objective of job evaluation is to find out the value of work, but this is a value which
varies from time to time and from place to place under the influence of certain economic pressure,
not least of which is the worth of money itself. The main features of job evaluations are:
 To supply bases for wage negotiation founded on facts rather than on vague intermediate
ideas.
 It attempts to assess jobs, not people.
 Job evaluation is the output provided by job analysis.
 Job evaluation does not design wage structure, it helps in rationalizing the system by
reducing number of separate and different rates.
 Job evaluation is not made by individuals rather it is done by group of experts.
 Job evaluation determines the value of job. Further the value of each of the aspects such as
skill and responsibility levels are also related and studied in connection with the job.
 Job evaluation helps the management to maintain high levels of employee productivity and
employee satisfaction

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4. Reasons for Job Evaluation:
Job evaluations are performed for these reasons.
 To determine what positions and job responsibilities are similar for purposes of pay,
promotions, lateral moves, transfers, assignments and assigned work, and other internal
parity issues. It is important that employees perceive your workplace as fair, equitable, and
the provider of equal opportunities for employees.
 To determine appropriate pay or salary grades and decide other compensation issues. This
is a significant factor in employee satisfaction in the workplace. Employees do talk about
their pay and it's legal for them to talk about their pay. Public employee pay is posted to
the world. Employees will identify any compensation inequities in your company pay
system.
 To help with the development of job descriptions, job specifications, performance
standards, competencies, and the performance appraisal system. These vehicles,
particularly in large companies, need to be equitable, and not dependent on the boss,
individual managers, and departmental whims.
 To assist with employee career paths, career planning or career pathing and succession
planning. Having a career path that provides opportunities for employees is important to
all employees, but it's especially important to your millennial employees. Listen to the
language they use when they move on to another company.
 To assist the employee recruiting process by having in place job responsibilities that help
with the development of job postings, the assessment of applicant qualifications, suitable
compensation, and salary negotiation, and other factors related to recruiting employees.

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5. Benefits of job evaluation:
1) Promotes transparency around pay decisions
2) Achieves a fair system of pay
3) Ensures pay levels are externally competitive
4) Supports equal pay
5) Supports recruitment, career development and succession planning
6. Job Evaluation methods:
Job evaluation
mathods
Qualitative
Factor
comparison
Point Rating
Quantitative
Job ranking
Garding

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7. Grading Method:
Grading method is also a non-quantitative method. It is also known as Job Classification
method. This method is an improvement over ranking method. Under this method
predetermined scale or grade is provided. These grades or classification determined in
advance by an authorized body or a committee appointed for the purpose.
Job grading method also known as job classification method establishes various grades for
different categories of jobs. For example, jobs of an operative may be classified as
unskilled, semi-skilled, skilled and highly-skilled. The process followed in this method is
as under:
 At the initial stage. a number of job classes or grades is decided on the basis of
job analysis. Job grades can be determined on either of two bases. First, all jobs
may first be ranked and their natural classes may be determined. The description
of each job class is prepared covering all jobs falling in a class. Second, the job
evaluation committee may prepare a series of job class description in advance on
the basis of which various jobs may be graded.
 Different characteristics of each job are matched with description of job class and
a job is placed in the class with which it matches best.

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Merits
Grading system of job evaluation particularly in government jobs is quite popular as this
has certain merits over the ranking method. These are as follows:
 It is quite simple to operate and understand as the relevant information is provided
by job analysis which serves other purposes too.
 Job evaluation done on grading method makes wage and salary determination easier
as these are fixed in terms of various grades of jobs.
Demerits
This system of job evaluation suffers with the following limitations:
 Job grade description is vague and personal biases may distort job grading as the
method is not based on any scientific analysis.
 There are chances of employees’ resistance when new clusters of jobs are prepared.
This is evident by the fad that government employees agitate when
recommendations of a new pay commission come.
Merits of Point Method:
This is widely used method of job evaluation. Under this system a manual is prepared
highlighting the various factors such as education, skill, competence, knowledge, training,

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responsibility, job conditions, complexity, hazards, coordination, physical and mental
efforts, mechanical ability etc. The jobs are rated on the basis of these factors which work
as yardstick for evaluation. In all the jobs some of these factors are inherent.
Merits – The points rating has several advantages. The major merits of the method are:
 It is the most comprehensive and accurate method of job evaluation.
 Prejudice and human judgement are minimized. The method cannot be
manipulated.
 Being the systematic method, workers of the organization favor this method.
 The scales developed in this method can be used for long time.
 Jobs can be easily placed in distinct categories
8. Merits of Factor Comparison Method:
This method is mostly used in evaluating professional and managerial positions. It is a
combination of ranking and point methods. It rates the jobs by comparing them like that in
ranking method and it makes analysis by subdividing jobs into compensable factors like
than in point method. The relative rank of the jobs evaluated assigning money value. Under
this method each job is ranked for each compensable factor separately. Each job factor is
broadly defined. The most common factor used in job evaluation includes skills, physical
and mental requirements, working conditions and responsibilities. This method, also
known as key job method, was originally developed at the Philadelphia Rapid Transit
Company, USA by Eugene J.Benge in 1926 to overcome two major problems faced in

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point method of job evaluation. Viz. Determining the relative importance of factors and
describing their degrees. The procedure for factor comparison method of job evaluation is
as follows:
 At the initial stage, some key jobs which are well recognized are selected. These
jobs should be from a cross-section of departments. These should represent all
levels of wages and salaries which are considered fair, both internally as well as
externally.
 Various factors of the jobs which are to be considered for comparison, should be
identified. These factors may be mental requirement. Skills, physical requirement,
responsibility and working conditions.
 Each factor of a job is compared with the same factor of the key job and rank is
awarded. This exercise is repeated for all other factors.
 The relative worth of a job is determined by adding the ranks obtained by different
factors of a job. Sometimes, the rank is expressed in terms of monetary values and
these values are added together to get the correct wage rate for the job.
Merits
The factor comparison method is more systematic and analytical as compared to any other
method and offers following merits:
 It provides more accurate information about the relative worth of a job as different
comparable factors are compared with key jobs.

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 Since only limited number of factors relevant for the effective job performance are
compared, there are reduced chances of overlapping.
 Since the evaluation is more systematic and analytical, its logic can be accepted by
trade unions and workers.
9. Demerits of Factor Comparison Method:
However, factor rating method has its own operational problems which restrict its
adaptability. The major problems are as follows:
 This method is quite costly and time consuming to install and difficult to understand
by those not fully conversant with job evaluation process.
 If wage rates are adopted for making comparison, the system may become obsolete
very soon as there may not be proportionate increase in wages for all jobs.
 This system considers only limited factors of job for comparison. This may be a
positive point so far as avoidance of duplication and simplicity of procedure are
concerned, but may ignore other factors which may be important for the
performance of the job.
10. Limitations of JobEvaluation:
Job evaluation systemsuffers from the following limitations:
1. Human bias cannot be eliminated completely from any job evaluation method even if efforts are
made to make it systematic. The element of human judgement is present in all the methods of job
evaluation.

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2. The factors considered for job evaluation sometimes overlap. The weightage given to them and
their reliability becomes questionable.
3. Job evaluation will have to be done regularly because the factors considered for it today may
not remain valid tomorrow because of technological changes.
4. There are apprehensions among workmen when job evaluation is introduced for the first time.
It may create doubts in the minds of those whose jobs are evaluated.
5. Job evaluation programmer requires lot of time and specialized technical personnel.
6. The introduction of job evaluation scheme may require substantial changes in the existing set
up. This change may involve appreciable costs and the concern may not be able to bear this
financial burden.