The Factor Comparison Method is a systematic job evaluation method that ranks jobs based on key factors rather than overall ranking. It involves selecting key jobs representing different salary levels, identifying factors to evaluate all jobs, independently ranking each job under each factor, and assigning monetary values to factors. The wage rate for other jobs is determined by comparing them to key jobs based on their factor rankings. While more analytical, it can be difficult to implement and questionably uses uniform criteria across diverse jobs.

1. FACTOR COMPARISON METHOD
Copyright :: Sneha Husaina & Jugnoo Raja

2. Introduction ::
- A more systematic and scientific method of job evaluation.
- Under this method , instead of ranking complete jobs, each job is
ranked according to a series of factors.
- Pay will be assigned in this method by comparing the weights of
the factors required for each job.
- In other words, wages are assigned to the job in comparison to its
ranking on each job factor.

3. Steps involved in Factor Comparison Method ::
• Select key jobs (say 15 to 20), representing wages/salary levels
across the organization. The selected jobs must represent as many
departments as possible.
• Find the factors in terms of which the jobs are evaluated.
• Rank the selected jobs under each factor independently.
• Assign money value to each factor and determine the wage rates
for each key job.

4. Continued…….
• The wage rate for a job is apportioned along the identified
factors.
• All other jobs are compared with the list of key jobs and wage
rates are determined.

5. An example of how the Factor Comparison Method works is
given below ::
Factors/
Key Job
Daily Wage
Rate
Physical
Effort
Mental
Effort
Skill Responsibility Working
Conditions
Electrician 60 11(3) 14(1) 15(1) 12(1) 8(2)
Fitter 50 14(1) 10(2) 9(2) 8(2) 9(1)
Welder 40 12(2) 7(3) 8(3) 7(3) 6(3)
Cleaner 30 9(4) 6(4) 4(5) 6(4) 5(4)
Labourer 25 8(5) 4(5) 6(4) 3(5) 4(5)

6. Continued…….
• After the wage rate for a job is distributed along the identified
and ranked factors, all others jobs in the department are
compared in terms of each factor.
• Suppose the job of a ‘Painter’ is found to be similar to Electrician
in skill(15), Fitter in mental effort (10), Welder in physical effort
(12), Cleaner in responsibility (6), Labourer in working conditions
(4). The wage rate for this job would be (15+10+12+6+4) is 47.

7. Merits ::
• Analytical and objective.
• Relative and valid as each job is compared jobs with all other jobs
in terms of key factors.
• Money values are assigned in a fair way based on an agreed rank
order fixed by the job evaluation committee.
• Flexible, as there is no upper limitation on the rating of a factor.

8. Demerits ::
• Difficult to understand, explain and operate.
• Its use of the same criteria to assess all jobs is questionable as
jobs differ across and within organizations.
• Times consuming and costly.