JOB EVALUATION SUBMITTED TO: SUBMITTED BY: Deepali Gangwar INSTITUTE OF MANAGEMENT STUDIES (DAVV, INDORE) Ms. Nisha Siddiqui

DEFINING JOB EVALUATION Job evaluation is an orderly and systematic technique of determining the relative worth of the various jobs within the organization so as to develop an equitable wage and salary structure.

Definition According to I.L.O. “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 workers concerned.”

Why Job evaluation?  Internal equity Comparisons inside an organization – among jobs Weighs jobs in terms of relative value of their contributions to the organization ’ s objectives 2 aspects:  Relative similarities & differences in the work content of jobs  Relative value / contribution of the work to the organization ’ s objectives Eg. How much do you wish to pay accountants in comparison with purchase clerk within the same organization?

Job Evaluation : Perspective & Design  Results of Job Analysis & Job Description serve as input for evaluating jobs & establishing job structure  Job Evaluation involves the systematic evaluation of the Job Description based on many factors: Content of the work Relative value of the work to the organization Culture of the work place External market forces

Determining an Internally Aligned Job Structure Internal alignment Job analysisJob descriptionJob evaluation Job structure Work relationships within the organization

bjectives  To eliminate wage inequities from jobs of equal worth or value  To compare the duties, responsibilities and demands of a job with other jobs  To minimize wage discrimination based on sex, age, caste, region, religion etc.  To gauge and control the payroll costs  To provide a framework for periodic review and revision of wage rates

Pay structure design Manage relativities Develop performance mgt. Competency framework Harmonise after merger Facilitate career moves Compare with market rates Provide for equal pay Create equitable structure Assimilate new jobs Per cent of organisations WHY DO IT? E-Reward Survey 2007

Process of Job Evaluation  Gaining acceptance  Constituting job evaluation committee  Selecting the key jobs to be evaluated  Describing the job  Selecting the method of Evaluation  Weighting job factors  Assigning money values  Periodic review

Methods of Job Evaluation Job Evaluation Non quantitative Ranking Or Job comparison Grading Or job classification Quantitative Point Method Factor comparison

1) Ranking Method  Involves ordering of Job Descriptions from highest to lowest in values  Paired comparisons  Ranking along a number line

Job Evaluation : Alternation Ranking  Ordering the job descriptions alternatively at each extreme (all jobs are considered)  Eg. of alternation ranking JobsRank No.Title Most Valued 1 Welder  Tool maker 2Machine operatorWelder 3 Packer  4 Grinder  5Unit assembler 6Janitor 7 Tool maker  8 Spray painter  Spray painter 9Engine operatorGrinder 10InspectorPacker Least Valued

Job Evaluation : Paired Comparison  Comparing all possible pairs of jobs  No. of pairs to compare = [n (n-1)] / 2  Eg. If you have 5 jobs then there are 10 paired comparisons  Jobs with highest total no. of “ Most Valuable ” ranking becomes the highest-ranked job. Job Numbers AABABBAA 2B 3BA 4A 5B 6AB 7A 8B 9B A = Better B = Worse

Advantages IIt is simplest and oldest method. IIt is very economical and less time consuming. IIt involves little paper work. Disadvantages IIt does not indicate degree of difference between jobs. IIt involves subjective judgement. TThe rater is required to be thoroughly familiar with all the jobs to be rated.

2) Grading/Classification method  Job classes or grades are established.  Job description of each job is defined in written form.  Analysis of job grades.  A series of job grades is developed and a different wage rate is fixed for each job.

Description of job grades Grade Description Unskilled This grade involve manual work. Little mental ability is required.No formal education is essential. Skilled Clerical in nature. Little physical effort is involved. High school certificate is essential. Supervisory In this grade job requires ability to apply established procedures and to guide others. Graduate degree is essential. Executive Jobs in this grade involve decision making and administrative work. Professional qualifications are necessary. Policy This grade involves policy making and control. Considerable work eperience at policy level is required.

Example In Grasim Industries Ltd.,there are ten job bands as follows: Manage self 10 & below Manage others 8-9 Manage managers 6-7 Function heads 4-5 Unit heads 2-3 Business heads 1

Advantages EEasy to understand and operate. MMore economical for smaller organizations. MMore accurate and systematic than ranking. GGrouping of jobs into grades simplifies the wage administration. Disadvantages DDifficult to write accurate and precise descriptions of job grades. DDoes not indicate the extent to which job is worthy than the other job. DDifficult to administer as the number of jobs increases CClassification judgements are subjective.

3) Points Rating method This method was introduced by Merrill R. Lott. It is the most widely used method of job evaluation. The method is quantitative and analytical as each component of the job are broken into components for the purposes of comparison.

Procedure involved:  Constituting a representative committee of members from various departments for job evaluation.  Preparing job descriptions, job specifications and employee specifications for a sample of jobs.  Selecting and defining those compensable factors which are related to all jobs and are most critical in determining the relative degrees of difficulty and responsibility of jobs.

Procedure contd..  Compensable factors are:  Skill: the experience, training, ability, and education required to perform a job under consideration - not with the skills an employee may possess  Effort: the measurement of the physical or mental exertion needed for performance of a job

 Compensable factors are:  Responsibility: the extent to which an employer depends on the employee to perform the job as expected, with emphasis on the importance of job obligation.  Working Conditions: Hazards, physical surroundings of the job, potential hazards, degree of danger etc.

Procedure contd….  Determining the weight of each according to its relative importance. Assigning value to each factor. The total percentage of all factors is 100.  Dividing each factor into levels and defining each level.  Determining relative value of each level within factors. Factors can be divided into point values by arithmetic progression.

Example: Software Engineer  Job Description The Software Engineer designs, develops, tests and maintains one or more of our products or internal applications. The software engineer works as a member of an engineering team developing, designing, and maintaining one or more of our products or internal applications. This position reports to the appropriate Project Manager.  Job Specification Bachelor's or undergraduate degree in Computer Science, Information Systems, Electrical Engineering or equivalent experience. Masters or graduate degree is desirable. Understand Intranet and Internet technologies: http, firewall.

Develop a list of compensable factors… A set of standards the organization uses to distinguish among jobs for pay purposes Examples of commonly used compensable factors: Degree of responsibility, supervision Knowledge needed to perform the job Discretion in performing the job, independent judgment Job conditions Effort Hazard Consequence of error

 Create a matrix of points for the degrees of each factor… Judgment and Decision Making: 1 st degree = 50 points 2 nd degree = 100 points 3 rd degree = 225 points 4 th degree = 350 points 5 th degree = 500 points 6 th degree = 700 points Communication, Work Environment, Coaching, Innovation, Knowledge – Education - Experience

Matrix: Factors v/s degrees Factors - Degrees1 st 2 nd 3 rd 4 th 5 th 6 th Job Knowledge Judgment & Decision Making Independent judgment Accountability Working conditions Mental

 Evaluate benchmark jobs to determine Job Evaluation Point Totals… Benefits supervisor = 700 Training material development specialist = 650 Job evaluation specialist = 460 Compensation manager = 920 Evaluation of benchmark jobs:

Trend Line through a scatter of points

Advantages  The value of the job is expressed in monetary terms.  Can be applied to a wide range of jobs.  Can be applied to newly created jobs

Disadvantages  The pay for each factor is based on judgments that are subjective.  The standard used for determining the pay for each factor may have built-in biases that would affect certain groups of employees (females or minorities).

4) Factor comparison method  This method is based both on the principles of point rating and ranking.  This method is analytical as the jobs are broken into sub factors and components.  Under this method, first the component sub-factors are ranked under various factor headings.

Factor Comparison method  The next step is assigning monetary values to the components or sub factors of each job.  Thus, each job is ranked a number of times.

Example The hourly rate is decided on the basis of following factors: jobHourly rate Pay for SKILL Pay for EFFORT Pay for RESPON SIBILITY Pay for WORKING CONDITN Secretary$ Admin Assistant $ Superviso r $ Manager$

Advantages  It is relatively more analytical and objective method.  Process involved is logical and cannot be manipulated easily.  The method is flexible as there is no upper limit on the rating of factor.  Each job is compared to all other jobs in terms of key factors.

Disadvantages  It is difficult to understand and operate.  It is a time consuming and expensive method.  It is difficult to determine factor levels and assign point values.

HAY SYSTEM  Hay system is a method of job evaluation given by Global Human Resource management consulting firm.  Hay’s Methodology is the “most widely used process in the world”

Hay system factors:  Hay’s Job Evaluation Methodology values all jobs against three factors: Know-How Problem Solving Accountability

THANK YOU!!