Job Evaluation is a technique to rank jobs in an organization on the basis of the duties and responsibilities assigned to the job. It is basically concerned with measuring the demands the job places on its holder (Jenss & Associates, 2008).
Job evaluation is basically a systematic process which an organization uses to determine the relative level, complexity and the value of each job in an organization. It is basically a tool to measure the worth of each job not only in an organization but in the whole labor market as well. In short we can say that it is basically a blend of job content, skill required, value to organization, organization culture and the external market (Evaluating Work: Job Evaluation, 2008).
Job evaluation helps in creating a job structure for an organization and a flourishing job evaluation plan also helps in making the pay system of an organization equitable, understandable, legally defensible, approachable, and externally competitive
Job evaluations can be use to elucidate job descriptions so that employees understand the expectations of their roles and the relationship of their roles to other jobs within the organization, attract desirable job candidates, retain high-potential employees (Heathfield).
Job evaluation is often used in making following decisions:
- determining pay and grading structures
- ensuring a fair and equal pay system
- deciding on benefits provision - for example, bonuses and cars
- comparing rates against the external market
- undergoing organizational development in times of change
- undertaking career management and succession planning
- Reviewing all jobs post-large-scale change, especially if roles have also changed.
Types of Job Evaluation
There are two main types of job evaluation:
Analytical Scheme: These offer greater objectivity in assessment as the jobs are broken down in detail, and are the ones most often used by organizations. Examples of analytical schemes include Points Rating and Factor Comparison.
- Points Rating.
This is the most commonly used method. The key elements of each job, which are known as 'factors', are identified by the organization and then broken down into components. Each factor is assessed separately and points allocated according to the level needed for the job. The more demanding the job, the higher the point’s value. Factors usually assessed include:
Knowledge and skills,People management,Freedom to act, Decision-making, Working environment, Impact and influence,Financial responsibility etc.
- Factor Comparison.
Factor Comparison is similar to Points Rating, being based on an assessment of factors, though no points are allocated. Use of the Factor Comparison method is not as widespread as the Points Rating systems, because the use of points enables a large number of jobs to be ranked at one time.
These are less objective than analytical schemes, but are often simpler and cheaper to introduce. Methods include job ranking, paired comparisons and job classification.
- Job ranking.
This is the simplest form of job evaluation. It is done by putting the jobs in an organization in order of their importance, or the level of difficulty involved in performing them, or their value to the organization. Judgments are made about the roles based on aspects such as the jobs' scope and impact, their level of autonomy, the complexity of their tasks and the knowledge and skills needed. Once this analysis is done, the jobs together form a hierarchy which indicates the different levels, or ranks, within the organization.
Organizations often divide the ranks into grades. The number of grades chosen will depend on the organization’s needs. This process is easily understood by employees and is relatively cheap to undertake.
- Paired comparisons.
This is a statistical technique used to compare each job with others in an organization. Using a ranking form, points are allocated to the job:
- two points if it is considered to be of higher value
- one point if it is regarded as equal worth
- No points if it is less important.
The scores are added up and then the final overall ranking can be given. Paired comparisons gives greater consistency, but takes longer than job ranking as each job is considered separately.
- Job classification.
This method is also known as job grading. Before classification, an agreed number of grades are determined, usually between four and eight, based on tasks performed, skills, competencies, experience, initiative and responsibility. Clear distinctions are made between grades. The jobs in the organization are then allocated to the determined grades (Job Evaluation, 2009).
The choice of job evaluation method totally depends on the needs of the organization. In my opinion the analytical methods are better than the non-analytical methods. Despite of their complexity and more time consumption analytical methods are better for the reason that they are objective methods and can easily defend an equal pay claim.
When an organization decides to introduce job evaluation, care is needed to ensure that there is no discrimination, direct or implied, in the design and operation of the scheme.
The success of job evaluation depends upon the level of commitment of management and the appropriate trade union or employee representatives. So the job evaluation should be introduced jointly by the management and the representatives of employees to discuss relevant issues initially in a non-negotiating forum, because a joint forum will generate more ideas and recommendations, a jointly agreed job evaluation scheme can remove emotion from grading queries by allowing reasoning, rather than confrontation, to prevail (Job Evaluation,2005).