Suggestion Schemes: Job Evaluation Prepared by: Bhakti Joshi Date: February 20, 2013

Job Evaluation …is a process of determining the relative worth of a job. Aims at… Reduction in inequalities in salary structure Specialisation Selection in employees Harmony between employees and manager Standardisation Creating relevance for new jobs

Job Evaluation: Pre-requisites Job content – job description and specification Top management support Cooperation of union and individual workers Comparison of Jobs Involvement of expert in job-evaluation techniques

Job Evaluation Methods Non-Analytical Methods Analytical Methods Ranking Method Classification Method Factor Comparison Point Method Methods designed on the basis of the jobs as a whole Methods designed on the basis of the requirements and elements of the jobs

Example: Ranking Method Job Monthly Salaries 1. Accountant Rs 60,000 2. Accounts Clerk Rs 30,000 3. Purchase Assistant Rs 25,000 4. Machine-Operator Rs 20,000 5. Typist Rs 17,000 6. Office Boy Rs. 15,000

Ranking Method Worth of a job based on: Processes: Judgement of skill; Effort (physical and mental); Responsibility (supervisory and fiscal); Working conditions; Ranked in descending order from best to worst Processes: Make a list of benchmark jobs or list of each position in a business (benchmark jobs as in producers, maintainers, administrators, cashiers, etc) [NOT employees] Write short description or primary duties of each position Determine the characteristics that is considered most important for the company Jobs are perceived to be the ones with the highest and lowest value; selecting a job mid-way and finally choosing others at lower or higher intermediate points. Divide the ranked jobs into grades and an initial estimate (based on common features among groups to bring about distinction between groups)

Ranking Method (Contd…) Presentations and continuous iterations Simple, quick and inexpensive only if agreement of the jobs and ranks are reached easily Used in small organisations LIMITATIONS: Highly subjective. Not diagnostic to point the specific areas of weakness and strength of a worker. Existing jobs must be re-ranked to accommodate new position Requires detailed knowledge of every job for evaluation and ranking and difficult when a large number of jobs are under consideration Difficult to justify slotting new jobs

Example: Classification Method Executives: Office manager, Deputy office manager, Office superintendent, Departmental supervisor, etc. CLASS I Skilled Workers: Purchasing assistant, Cashier, Receipts Clerk, etc CLASS II Semi-Skilled Workers: Stenotypists, Machine-operators, Switchboard operators, etc. CLASS III Semi-Skilled Workers: Daftaris (book-binders), File clerks, Office boys, etc. CLASS IV

Classification Method One whole job Slots jobs into grades Hierarchy of grade definitions Skill Competence Experience Initiative Responsibility Grades are limited to 4 to 8 levels and more than 8 grades become unmanageable Simplicity and easily understood

Classification Method (Contd…) Limitations Cannot cope with complex jobs Grade definitions tend to be generalised – When individual job descriptions and grade descriptions do not match well, evaluators have a tendency to classify job using subjective judgements Requirements of different jobs differ but are combined in the single category

Factor Comparison Method Analytical extension of Classification Method Select a number of “key jobs” (generally 15 to 20) [NOT whole but separate] Analyse them on certain critical factors. For example, 5 critical factors are identified Mental Requirement Physical requirements Skill requirements Working conditions Responsibility

Factor Comparison Method (Contd…) Rank each key-job within each factor which will be different for different jobs Assign wages to each factor. Wages should be in proportion to the estimated total price of a job Calculate total wage for a job by adding wage rate for each factor. This provides a job comparison scale and insert key jobs in it

Factor Comparison Method (Contd…) Evaluate the job under consideration based on the job comparison scale identified above. Then evaluate and compare each job with other jobs in terms of each factor Design, adjust and operate the wage structure

Example: Factor Comparison Method – Tools Workshop Job Skill Mental Requirement Physical requirement Responsibilities Working conditions Tool maker 1 4 Craft worker 2 3 Process Operator Maintenance assistant Ranking Jobs by Factors

Example: Factor Comparison Method – Tools Workshop Job Skill Mental Requirement Physical requirement Responsibilities Working conditions Tool maker 35 30 5 20 10 Craft worker 25 15 Process Operator Maintenance assistant Relative Importance of Jobs

Example: Factor Comparison Method Job Skill Mental Requirement Physical requirement Responsibilities Working conditions Tool maker 91 78 13 52 26 Craft worker 66 55 33 Process Operator 54 27 18 Maintenance assistant 32 24 40 Allocation of Money Values (in Rs)

Example: Factor Comparison Method – Tools Workshop Job Benchmark Jobs (Rs) Non-Benchmark jobs (Rs) Tool maker 91 Craft worker 66 Process Operator 54 Assembler 42 Maintenance Assistant 32 Jobs evaluation based on: Education Financial Responsibility Job-related experience Supervision Teamwork Creativity Slotting Non-Benchmark jobs

Factor Comparison Method: Advantages Job comparison on factor-to-factor basis Rankings made by defining factors thus avoiding imprecise definitions Not need to convert points to money value – leads directly to a price for a job Useful for medium to large organisations

Factor Comparison Method: Disadvantages Complete dependence on the benchmark jobs…How do you believe that the benchmark jobs lead to equal incomes? Could be held to be discriminatory Though analytical still requires subjective judgement

Example 2: Factor Comparison Method Job Hourly Rate Skill Physical requirement Responsibilities Working conditions Secretary Rs. 90 Rs 45 Rs 20 Rs 5 Admin Assistant Rs 110 Rs 55 Rs 25 Supervisor Rs 150 Rs 60 Rs 35 Rs 40 Rs 15 Manager Rs 210 Rs 90 Rs 70

Point-Method Select job cluster and the jobs to be evaluated Jobs should be analysed and job descriptions/specifications should be prepared Select compensable factors Define each factors’ specifications Working conditions: noise levels, temperature Education: SSC, HSC, Undergraduate, Graduate,Post-graduate Experience: Entry-level, 0 – 2 years, 3-5 years, etc

Point Method (Contd…) Define factor degrees: Degree 1 for entry-level, Degree 2 for 0-2 years of experience, Degree 3 for 3 – 5years of experience, etc. Determine total points in plan Degree 1 for entry-level = 30 points Degree 2 for 0-2 years of experience = 75 points Degree 3 for 3 – 5 years of experience = 120 points Degree 4 for 6-10 years of experience = 165 points Degree 5 for 11 to 25 years = 255 points, Degree 6 for 26 to 40 years = 300 points

Point Method (Contd…) Evaluate jobs Key jobs are known Then other jobs are evaluated based on the factors identified

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