Unit I: Job Evaluation Prepared by Shyam K. Fardale.

Job Evaluation  Job evaluation is a systematic process of analyzing and evaluation jobs to determine the relative worth of each job in an organization.  It forms the basis for designing the compensation management system in an organization. since the compensation management and the perceived fairness of compensation administration have a big influence on employee morale and satisfaction.

Cont....  According to the Bureau of Labor Statistics (USA), “Job evaluation is the evaluation or rating of jobs to determine their positions in the job hierarchy. the evaluation may be achieved through assignment of points or use of some other systematic method for essential job requirements such as skill, experience and responsibility”.

Objectives  To determine relative worth of different jobs in an organization and providing the basis for the compensation management system.  To determine the position and place of a job in the organizational hierarchy.  To clarify the responsibility and authority associated with each job.  To manage internal and external consistency in the compensation.

Cont....  To maintain complete and accurate data relating to job description and job specification of various jobs.  To ensure employee satisfaction with respect to the compensation.  To avoid discrimination of any kind in wage administration.  To provide the basis for classification of new or changed jobs.

Principles of Job Evaluation  The job dimensions have to be properly selected and should be rated in accordance with the demands of the job.  The dimensions selected for the purpose of rating should be clearly defined to ensure clear understanding by the employees.  The evaluation program should be explained and illustrated to the employees at all levels.The employees as well as the supervisors should have confidence in the system of evaluation.

Cont...  The employees must be actively involved in the evaluation program. This helps develop a sense of trust in the whole exercise.  Market factors should be taken into consideration while evaluating jobs. For example, if there is a scarcity of statisticians in the job market, this fact has to be given due importance while evaluating the job of a statisticians.

Process of Job Evaluation  Preparation of a Job Evaluation Plan  Job Analysis  Job Description & Job Specification  Selection of job dimensions  Classification of jobs  Implementation of the evaluation  Maintenance

Techniques of Job Evaluation Quantitative Point Rating Method Factor comparison Method Decision – Band Method

Non-Quantitative Ranking Method Job Classification/ Job Grading Method

Ranking Method  Ranking is the method in which the jobs in an organisation are assessed based on the knowledge,skills,effort and other job dimensions associated with each job. Ranking involves preparation of brief job descriptions and assigning ranks to the jobs in accordance with their worth in the organization.

Techniques Of Ranking  Relative Ranking  Paired Comparison Ranking  Single Factor Ranking  Once the ranking of the jobs is complete, a monetary value is attached to each job.

Job Grading  In this method of job evaluation, the jobs are classified and graded based on their significance and their worth to the organization, the jobs at various levels in an organization are placed under different grades, which are clearly defined. Grades are formulated on the basis of the nature of the tasks and responsibilities of the jobs. For e.g.:-a grade may comprise jobs like Financial Accountants, Management Accountants, Cost Accountants

Point rating method  The point method or the point rating method is one of the most widely used methods of job evaluation. In this method, a quantitative point scale is developed to evaluate the jobs. The number of scales to be used and other aspects of implementation are determined by the job evaluation analyst or the human resource function.

Steps in Point method  Determine the job factors or compensable  Determine the sub factors  Define the degree statements or profile statements  Assign points to factors,subfactors and degrees ( For e.g. if experience is critical to a job, degree I might be 20 points, degree II might be 60 points, degree III-60 points, degree IV -80 points).

Cont....  Preparation of chart  Applying point system

Factor comparison method  It is based on the principles of point rating and ranking.  Steps involved-  Determining & defining specific factors(4 to 7)  Identify key or bench mark jobs  Comparison and ranking of various factors upon their importance  Assigning monetary values and adding up to pay of the bench mark job and evaluation.

Decision Band Method  It is more popular in both public & private firms for more than 25 years. It was developed by Prof.Emeritus Thomas T.Paterson in 1970’s and further developed & refined by Ernst & Young’s compensation specialist in client organisation.  The basic premise of DBM is that the value of a job depends on its decision-making requirements’. Decision-making is logical and equitable basis for comparing jobs because all jobs involved decision-making on all levels.

Cont....  The DBM distinguishes six levels of decision making or “decision-bands", ranging from the most far reaching decisions on organizational goals to the simplest decisions, such as how fast to key-enter data.  The DBM job evaluation produces a decision–based structure.

Merits of Job Evaluation  It is logical and objective method of ranking and grading jobs for the purpose of compensation management.  It helps in preventing & removing discrepancies in the wage structure of an organization.  It helps in maintaining higher worker satisfaction level by logical explanation of issues related to job differentials

Cont....  It facilitates the entry of new jobs into the organizational wage structure and help in appropriate evaluation and pay structure fixation accordingly.  It helps in comparison of organization’s wage structure with that of competitors and market rates.  It helps in decisions related to selection, transfer and promotion of employees

Demerits  Changes in jobs and its factors can render job evaluation techniques outdated and irrelevant.  It can give rise to employee grievance if not properly formulated or implemented.  It introduces rigidity into the pay system and reduces opportunities for mangers top exercise discretion.  It takes long time to implement and may involve formalization of rules leading mismatch b/w financial condition of firm and established wage structure.

Job Analysis  Job analysis is the procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it.  Organizations consist of positions that have to be staffed. Job analysis is the procedure through which you determine the duties of these positions and the characteristics of the people who should be hired for them.The analysis produces information on job requirements, which is then used for developing job descriptions (what the job entails) and job specifications (what kind of people to hire for the job).

To analyses any job there are 6 steps :–  1.Identify how information will be used  2.Review background information  3. Select representative positions to analyze  4.Collect data to analyze job  5.Review information with incumbents  6.Develop Job Description / Job Specification

job analysis consists of two parts  A job description is a list of the elements  A job description is a list of the elements that make up a particular job.  A job specification is a list of the  A job specification is a list of the qualifications required to perform particular job.

Job Analysis helps to find information Job Analysis helps to find information  Work activities  Work activities  Human behaviors  Human behaviors  Performance standards  Performance standards  Job context  Job context  Human requirements  Human requirements

Scope of Job Analysis :–  Recruitment and Selection  Recruitment and Selection  Compensation  Compensation  Training  Performance Appraisal  Performance Appraisal

Methods of Collecting Job Analysis Data  Job performance  Job performance  Personal observation  Personal observation  Critical incidents  Critical incidents  Interview  Questionnaire method  Questionnaire method

Job performance  In this method the job analyst actually  In this method the job analyst actually performs the job in question. performs the job in question. The analyst, thus, receives first hand experience of contextual factors on the job including physical hazards, social demands, emotional pressures and mental requirements. This method is useful for jobs that can be easily learned. It is not suitable for jobs that are hazardous (e.g., fire fighters) or for jobs that require extensive training (e.g., doctors, pharmacists ).

Personal observation  The analyst observes the worker(s) doing the job.  The tasks performed, the place at which  The tasks performed, the place at which activities are done, the working conditions, etc., activities are done, the working conditions, etc., are observed during a complete work cycle During observation, certain precautions During observation, certain precautions should be taken

Cont….  a. The analyst must observe average  a. The analyst must observe average workers during average conditions.  b. The analyst should observe without  b. The analyst should observe without getting directly involved in the job.  c. The analyst must make note of the  c. The analyst must make note of the specific job needs and not the behaviors specific job needs and not the behaviors specific to particular workers.

Critical incidents  The critical incident technique (CIT) is a qualitative approach to job analysis used to obtain specific, behavioral focused descriptions of work or other activities. focused descriptions of work or other activities.  Here the job holders are asked to describe several incidents based on their past experience. The incidents so collected are based on their past experience. The incidents so collected are analyzed and classified according to the job areas they describe. analyzed and classified according to the job areas they describe. The job requirements will become clear once the analyst draws the line between effective and ineffective behaviors of the line between effective and ineffective behaviors of workers on the job.

Interview  The interview method consists of asking questions to both incumbents and supervisors in either an individual or a group incumbents and supervisors in either an individual or a group setting. The reason behind the use of this method is setting. The reason behind the use of this method is that jobholders are most familiar with the job and that jobholders are most familiar with the job and can supplement the information obtained through observation. can supplement the information obtained through observation. Workers know the specific duties of the job and supervisors are aware of the job’s relationship to the rest of the organization

Questionnaire method  The questionnaire is a widely used method of analyzing jobs and work.  The questionnaire is a widely used method of analyzing jobs and work.  Here the job holders are given a properly designed questionnaire aimedatelicitingrelevant job-related information. After completion,  Here the job holders are given a properly designed questionnaire aimedatelicitingrelevant job-related information. After completion, the questionnaires are handed over to supervisors. The supervisors can seek further the questionnaires are handed over to supervisors. The supervisors can seek further clarifications on various items by talking to clarifications on various items by talking to the jobholders directly. After everything is finalised, thedata is given to the job analyst.