The document outlines job evaluation as a systematic process for determining the relative worth of jobs within an organization, centering on job content, required skills, and market value. It details various job evaluation methods, including conventional and innovative approaches, and emphasizes the importance of stakeholder involvement and establishing a job evaluation committee. The benefits of job evaluation include linking pay with job requirements, creating equitable wage structures, and facilitating improved workforce utilization.

1. Module -3
Job Evaluation

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

3. Process of systematically determining the relative worth
of jobs to create a job structure for the organization.
Evaluation is based on a combination of job content,
skills required, value to the organization, organizational
culture and the external market.

4. Job Evaluation consists of the
following
1. Job Analysis.
2. Job Description.
3. Job specification
4. Job Grading.
5. Job Classification.
6. Job Assessment/Job Pricing.

5. Major Decisions in Job Evaluation
1. Establish purpose of evaluation.
2. Decide whether to use single or multiple plans.
3. Choose among alternative approaches.
4. Obtain involvement of relevant stakeholders.
5. Evaluate plan’s usefulness.

6. Job Evaluation Process
1. Gaining Acceptance
2. Creating job evaluation committee
3. Finding the jobs to be evaluated
4. Analysing and preparing job description
5. Selecting the method of evaluation
6. Classifying jobs
7. Installing the programme
8. Reviewing periodically

7. Features of Job Evaluation
• It tries to assess jobs, not people.
• The standards of job evaluation
are relative, not absolute.
• The basic information on which
job evaluations are made is
obtained from job analysis.

8. Features of Job Evaluation
• Job evaluations are carried out by groups, not by individuals.
• Some degree of subjectivity is always present in job evaluation.
• Job evaluation does not fix pay scales, but merely provides a
basis for evaluating a rational wage structure.

9. Benefits of job evaluation
• It tries to link pay with the requirements of the job.
• It offers a systematic procedure for determining the relative worth of
jobs.
• An equitable wage structure is a natural outcome of job evaluation
• An unbiased job evaluation tends to eliminate salary inequalities by
placing jobs having similar requirements in the same salary range.

10. Benefits of job evaluation
• Employees as well as unions participate as members of job
evaluation committee.
• Job evaluation, when conducted properly and with care, helps
in the evaluation of new jobs.
• It points out possibilities of more appropriate use of the
plant’s labour force by indicating jobs that need more or less
skilled workers than those who are manning these jobs
currently.

11. Job Evaluation Methods
Job Evaluation methods are divided into mainly 2 categories:-
1. Conventional
2. Innovative/Non-Conventional.
1.Conventional Methods:-
a) Non Quantitative methods:-
i) Ranking Method
ii) Classification Method.
b) Quantative methods:-
i) Points Ranking method.
ii) Factor Comparison method.

12. Innovative/Non-conventional:-
1. Time Span of Discretion Method
2. Decision Band Method.
3. Direct consensus method.
4. Guide Chart Profile Method.
5. Urwick Orr Profile Method.

13. RANKING METHOD
• It is the simplest method of job evaluation.
• In this method, jobs are arranged from highest to lowest, in order
of their value or merit to the organisation.
• Jobs can also be arranged according to the relative difficulty in
performing them.
• Jobs are usually ranked in each department and then the department
rankings are combined to develop an organisational ranking.

14. JOB CLASSIFICATION
• According to this method, a predetermined number of job groups or job
classes are established and jobs are assigned to these classifications.
• This method places groups of jobs into job classes or job grades.
• Separate classes may include office, clerical, managerial, personnel, etc.

15. JOB CLASSIFICATION
Following is a brief description of classification in an office:
 Class 1- Executives: Office manager, deputy office manager, department
supervisor, etc.
 Class 2- Skilled workers: Purchasing assistant, cashier, receipts clerk, etc.
 Class 3- Semiskilled workers: Stenotypists, machine operators,
switchboard operator, etc.
 Class 4- Semiskilled workers: file clerks, office boys, etc.

16. POINT METHOD or POINTS
RANKING METHOD
• This method is widely used currently.
• In this method jobs are expressed in terms of key factors.
• Points are assigned to each factor after prioritizing each factor in
order of importance.
• The points are summed up to determine the wage rate for the job.
• Jobs with similar point totals are placed in similar pay grades

17. Steps in Point Method
1. Create Job Evaluation Committee
2. Select Benchmark Jobs
3. Choose Compensable Factors
4. Define Factor Degrees
5. Determine Weight of each Factor
6. Determine Point Values
7. Verify Factor Degrees and Point Values
8. Evaluate All Jobs

18. Steps in Point Method
• Create Job Evaluation Committee
• Advantages of JE Committees
• Broader job knowledge from different perspectives
• Increased participation leads to increased understanding and
commitment to the Job Evaluations.
• Selecting members to be on the JE committee
• Job incumbents, managers, HR expert, union reps
• Employees who have knowledge of jobs
• Manageable size

19. Steps in Point Method
• Select Benchmark Jobs
• “Generic” jobs with similar and agreed upon characteristics
• Relatively stable
• Represent entire range of jobs in company
• Generally accepted in the labor market for purposes of
setting pay levels

20. Steps in Point Method
• Choose Compensable Factors
• “Universal” factors:
• Skill
• Effort
• Responsibility
• Working Conditions
• Custom factors
• Sub-Factors

21. Steps in Point Method
• Define Factor Degrees
• Provides levels within each factor or subfactor
• Best to define each level in job-specific terms
• Fewer degrees required if system only needs to cover a
smaller range of jobs
• Determine Weight of each Factor

22. Steps in Point Method
• Determine Point Values
• Set arbitrary maximum (1000 pts)
• Determine weighted maximum per factor
• If responsibility was weighted 10%, it can have maximum
score of 100
• Divide factor maximum by number of degrees
• If 4 factors, 25 pts per degree

23. Steps in Point Method
• Verify Factor Degrees and Point Values
• Committee members score random set of jobs
• Review scores to determine logical consistency and fairness
• Make sure points are consistent with business strategy of
your firm
• Adjust as necessary

24. Factor Comparison Method
• It is more systematic and scientific method of job evaluation.
• Though it is the most complex method of all, it is consistent
and appreciable.
• Under this method, instead of ranking complete jobs, each job
is ranked according to a series of factors.

25. These factors include:
>mental effort.
>physical effort.
>skills needed.
>responsibility.
>working conditions.
>know-how.
>problem solving abilities.
>accountibility, etc.
Wages are assigned to the job in comparison to its ranking on
each job factor.

26. Comparison of Job Evaluation Methods
Advantage Disadvantage
Ranking Fast, simple, easy to
explain, suitable for
small org, not
expensive.
Not very accurate ,
not useful for large
org.,least used
method
Classification Can group a wide
range of work
together in one
system, simple, more
accurate than raking
method.
Not useful for
large org, time
consuming, not
involved detailed
job analysis.
Point Compensable factors
call out basis for
comparisons.
Compensable factors
communicate what is
valued.
Can become
bureaucratic and
rule-bound.

27. Comparison of Job Evaluation Methods
Advantage Disadvantage
Factor comparison
method
Finds wages for a
job, wages can be
calculated speedily,
greater consistency in
the judgment, size of
jobs can be
measured.
Expensive, time
consuming

28. The Urwick Orr Profile Method
• This method was originated by the British firm of
management consultants, Urwick Orr and partners.
• It combines the feature of point rating and ranking
methods.

29. The Direct Consensus Method
It relies on the Paired Comparison techniques.
An important feature of this method is members of
the valuation panel record their individual
assessments of whole job rankings and these
assessments are fed into a computer.

30. Direct Consensus Method
Here the workman and evaluator reach the value by
mutual consensus.

31. Time span of Discretion Method
This system uses the concept that all make
decisions in their work and the effect of such a
decision on their work/organisation is felt after a
certain period for taking a follow up action.
For example:-
i) Unskilled worker – few hours.
ii) Marketing Manager – 2-3 years.
iii) Board of Directors – 10 years.

32. Decision Band Method
Here the type of decision to be made by the job is considered
and placed in the applicable band.
For ex:-
i) Band E – Policy making decision – Top Management.
ii) Band D – Programming decision – By senior managers.
iii) Band C – Interpretive decisions – By middle managers.
iv) Band B – Routine decisions – By skilled operators.
v) Band A – Automatic decisions regarding when, how and
where – By semi skilled workers.

33. Guide Chart profile method
Hay plan or Hay Guide chart Profile method is for
managerial pay. It emphasizes on three critical
factors:-
1) Know-how.
2) Problem – solving.
3) Accountability.

34. 1) Know-how:-
Practical experience, specialized expertise and technological depth.
Width of managerial knowledge.
Human Relations.
2)Problem – solving:-
Thinking environment
Challenging environment
3) Accountability:-
Freedom to act.
Impact on results.
Magnitude of success annually etc.

35. Obtain Job KSAOs
Knowledge
Skills
Abilities
Other Characteristics

36. Hay Group—Pioneer in Job
Evaluation
The Korn Ferry Hay Group Guide Charts
are proprietary instruments that yield consistent and
legally defensible evaluations of the content of jobs. Korn
Ferry Hay Group's job evaluation approach is the world's
most widely utilized, accepted, and tested over time as a
fair and unbiased way to determine job worth.
Hay Job Evaluation is a method used by corporates and
organizations to map out their job roles in the context of
the organizational structure.

37. • The general purpose for carrying out job evaluations using this
or similar job evaluation methods is to enable organizations to
map and align their roles/jobs. This can deliver the following
key benefits:
• Clarity in result areas and accountabilities in the processes of
the organization
• Enabling salary and benefit grading or benchmarking due to
standardization of job levels
• Improved succession planning or mobility within the
organization
• Creation of more useful and focused job descriptions

38. Steps in Hay Job Evaluation
• Training for representatives from major operational departments
and HR functions in the use of the method. This will include practical
exercises where a mix of people will act as a "job evaluation board“
• Revision of all job descriptions across the enterprise under HR
guidance. Typically a single standard (format) will be required if it is
not already in existence.
• Creation of job evaluation boards – mix of line management, HR and
experts to decide on plotting of jobs.

39. • Organization map and banding proposal – Typically the
HR function will work with senior management to put
together a proposal for banding (scales expressed in Hay
points) or grading staff and describing the benefits that
will be attracted by each band.
• Board review – once the jobs are all rated and the
organization map is completed, the company board or
equivalent will review the summary, the banding
proposals, cost if any, to the company and recommended
activities to go live. Assuming these are approved, the
overall project manager will then move to
implementation.

40. 1) Know-how:-
Practical experience, specialized expertise and technological depth.
Width of managerial knowledge.
Human Relations.
2)Problem – solving:-
Thinking environment
Challenging environment
3) Accountability:-
Freedom to act.
Impact on results.
Magnitude of success annually etc.

41. Online Salary Survey
A salary survey is a tool specifically for
remuneration specialists and managers to define a fair
and competitive salary for the employees of a
company. The survey output is data on
the average or median salary for a specific position,
taking into consideration the region, industry,
company size, etc

42. Pay Policy Alternatives
Companies can choose from three pay level policies
1. Market lead : The market lead policy distinguishes a
company from the competition by compensating
employees more highly than most competitors.
2. Market lag : It distinguishes a company from the
competition, but by compensating employees less than
most competitors.
3. Market match : This policy most closely follows the
typical market pay rates because companies pay
according to the market pay line.

43. Salary Survey
A salary survey is a systematic process of
collecting & making judgments about the
compensation paid by other employers. They
provide the data for setting the pay policy relative
to competition

44. Reasons for conducting salary
survey
1. To make adjustments to employees pay on the
overall movement of pay rates caused by the
competition foe people in the market.
2. To set the mix of pay forms relative to that paid by
competitors.
3. To analyze pay related problems.

45. 4. To estimate the labour costs of product/services market
competitors-to select relevant market competitors, based
on the following areas
The same occupations or skills.
Employees within the same geographic area.
Thee same products and service.

46. Design the Survey
Consulting firms offer a wide choice of ongoing surveys
covering almost every job family and industry group.
Designing a survey requires answering he following
questions:- 1) Who should be involved in the survey design?
2) How many employers should be included?
3) Which jobs should be included?
4) What information should be collected?

47. Interpreting survey results
1. The policy on competitive position is translated
into practice by pay policy lines.
2. The use of grades & ranges recognizes both
internal & external pressures on pay decisions.
3. Pay ranges permit the employers to value &
recognize these differences with pay.

48. Pay-Policy Line
• A mathematical expression that describes
the relationship between a job’s pay & its
evaluation points.
• Now you can define a pay-policy line by
plotting points reflecting the jobs in your
organizations based on two dimensions:
compensation value and a job ranking
(or job evaluation result).

49. The line that illustrates the relationship between the
external value of a job (from salary survey information) and
the internal value of jobs (from job evaluation) represents the
market line. A pay policy line portrays an organization's pay
policy with respect to the market line