Unit-V
Job evaluation is an orderly and systematic process of determining
the wages worth for the job in relation to other jobs. It is a process of
rewarding the job after it has been analysed. Each job should be paid
according to its real value i.e. a high value job should receive higher
wages and low value job should receive lower wages.
If it is reverse, the workers would feel dissatisfied resulting into
unhealthy industrial relations. Once the worth of the job is
determined, it becomes easier to determine and fix the wage
structure that will be fair, equitable and remunerative.
Ranking Method:
Ranking method is one of the simplest performance evaluation
methods. In this method, employees are ranked from best to worst
in a group. The simplicity of this method is overshadowed by the
negative impact of assigning a ‘worst’ and a ‘best’ rating to an
employee. Such discriminations lead to negativity within a group and
have a negative impact on performance.
Explanation:
In this method, one employee is compared to another employee. The
end result is an ordering of employees from best to worst. For
example, in a group of ‘n’ employees, performance of employee-1 is
compared with performance of ‘n-1’ employees. Performance of
employee-2 is compared with performance of ‘n-1’ employees. This
method is completed once performance of every employee is
compared with that of other employees. The ‘best’ performer is then
determined. The process is now repeated with’n-1’ employees till
the ‘second best’ employee is determined. The process continues till
the last employee is remaining and is given the tag of the ‘worst’
performer. This method leads to overall assessments of employees
rather than a biased judgement. Another method to determine
rankings is the alternative ranking method in which the first part of
the process identifies the ‘best’ and the ‘worst’ performer. The
second part identifies the ‘second best’ and the ‘second worst’
performer and so on.
Because of its discriminating nature, this method is rarely used in
organizations. Also, since it is restricted to a group, comparison of
employee performance across groups is not possible.
Job Classification method:
This is an improvised method over the ranking method. But both the
methods assign neither points nor money values to classify the jobs.
Procedures followed are not complicated. Basically uses Job
descriptions and job specifications. The committee of executives
goes through each job description in detail and carefully weights the
job basing upon factors like skills, responsibilities, experiences and
types of work etc.
This method establishes a pre-determined number of job groups or
job classes and assigns jobs to these job groups. In other words, first
job classes or grades of jobs are established and then various jobs
are fitted into these pre-determined, established classes or grades.
Generally the job classes range between 7 and 15, or as deemed
appropriate by the rankers. It assigns each job to a particular grade
or class and for each grade or class, rates of wages are different.
Factor Comparison method:
Every job requires certain capabilities on the part of person who
does the job. These capabilities are considered as critical factors,
which can be grouped as listed below
The factor comparison method consists of six well defined steps:
1.Identify the key jobs.
2.Rank the key job, factor by factor
3.Apportion the salary among each factor and rank the key jobs.
4.Compare factor ranking of each job with its monetary ranking.
5.Develop a monetary comparison scale
6.Evaluate non-key jobs based on the monetary comparison scale
Point rating method:
This is the most widely used method of job evaluation. Under this
method, jobs are broke down based on various identifiable factors
such as skill, effort, training, knowledge, hazards, responsibility, etc.
Thereafter, points are allocated to each of these factors.
Weights are given to factors depending on their importance to
perform the job. Points so allocated to various factors of a job are
then summed. Then, the jobs with similar total of points are placed
in similar pay grades. The sum of points gives an index of the
relative significance of the jobs that are rated.
A set of compensable factors are identified as determining the worth of jobs.
Typically the compensable factors include the major categories of:
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions
These factors can then be further defined.
1. Skill
1. Experience
2. Education
3. Ability
2. Responsibilities
1. Fiscal
2. Supervisory
3. Effort
1. Mental
2. Physical
4. Working Conditions
1. Location
2. Hazards
3. Extremes in Environment
The point method is an extension of the factor comparison method.
Each factor is then divided into levels or degrees which are then assigned points. Each
job is rated using the job evaluation instrument. The points for each factor are summed
to form a total point score for the job.
Jobs are then grouped by total point score and assigned to wage/salary grades so that
similarly rated jobs would be placed in the same wage/salary grade.
Benefits of Job-Evaluation:
1. Job evaluation is an objective technique of ranking jobs. It helps in
removing disparities in wage structures.
2. It helps in fixing new jobs in existing wage structure.
3. The grievances resulting from relative wages are easily eliminated
because these are based on a definite criterion. It also helps in
improving management employee relations.
4. It provides greater uniformity in wage rates, thus simplifying wage
administration.
5. The data collected for job evaluation may also help in improving
selection, transfer, promotion procedures on the basis of
comparative job requirements.
6. Any dispute regarding wages can be settled by referring it to job
evaluating committee.
7. The change in technology also changes job contents. Job
evaluation is helpful in reviewing job rates in the light of
technological changes with which job contents change.
8. It also provides good criteria for bonus schemes and helps in job
classification as well as work simplification.
Limitations of Job Evaluation:
Job evaluation system suffers from the following limitations:
1. Human bias cannot be eliminated completely from any job
evaluation method even if efforts are made to make it systematic.
The element of human judgement is present in all the methods of
job evaluation.
2. The factors considered for job evaluation sometimes overlap. The
weightage given to them and their reliability becomes questionable.
3. Job evaluation will have to be done regularly because the factors
considered for it today may not remain valid tomorrow because of
technological changes.
4. There are apprehensions among workmen when job evaluation is
introduced for the first time. It may create doubts in the minds of
those whose jobs are evaluated.
5. Job evaluation programme requires lot of time and specialised
technical personnel.
6. The introduction of job evaluation scheme may require substantial
changes in the existing set up. This change may involve appreciable
costs and the concern may not be able to bear this financial burden.
7. This system is suitable to big concerns only because it is very
expensive.
8. The trade unions consider it as an encroachment on their right to
negotiate for wage structure.
9. This system causes inflexibility. The demand and supply of labour
is the main cause for wage differentials.
10. There may be a conflict about the factors to be chosen for job
evaluation. Workers insist on the inclusion of some factors which
they feel favourable to them.
1.Pert and cpm method:
Activity time
1-2 10
2-4 10
1-3 15
3-5 12
4-5 8
4-6 8
5-7 10
6-7 20
10(0,10) 10(10,20) 4 8(20,28) 6 20(28
3
5
1-2=0,10
1-3=0, 15
