Job evaluation
Job evaluation is a systematic method of measuring the job value to determine the value of each job to finalize the salary, incentives, remuneration, wages, etc. This method is implemented by the organization to determine how much monetary rewards should be provided for each job. Different methods are utilized to execute the job evaluation in the organization. Job evaluation can help performance appraisal to determine whether the employees are capable of a specific position to which that employee is appointed.
Methods of Job Evaluation
Ranking Method
In the ranking method of job evaluation, every job is analyzed to know how much contribution the job in the profitability of the organization. If the job is more worthy, it will be at the highest position in the rank and if the job contributes less than other jobs for the profitability of the organization then it ranked at the lowest rank. Ranks given to every job are from highest to lowest rank based on how worthy the job is for the organization.
The ranking method of job evaluation is the simplest method to implement in the organization. It involves in measuring how much contribution is obtained by executing the specific job. After measuring the contribution of each job to the organization a Comparison is made between them. After that, the organization gives the rank based on the highest to lowest monetary contribution given by the job.
Example
Jab evaluation of the positions of general manager, production manager, supervisor, and operator is done by comparing their job values. Job values consist of skills required, complexity, decision-making authority, and working conditions. By comparing the values of these factors in each job the ranking is given from highest to lowest.
Comparison between supervisor and production manager This method analyzes the authority the production manager has responsibilities the production manager is having and how much authority is responsible for the supervisor. By comparing responsibilities authorities, working conditions, and complexities involved in the job of these employees the organization gives the ranks from the highest to lowest.
Point Factor Method
The point factor method of job evaluation involves assigning values to the various factors of the job such as responsibilities, Required efforts and skills. By making the addition of all the values given to each factor of the job the point factor method determines how much value is there to a specific job.
Example
Let us Assume ABC company implements the point factor method for the following job evaluation
Job position: Supervisor
Skills (01-10): 9
Responsibilities(01-08)6
Working conditions(01-10): 5
Degree of complexity(01.16):7
Efforts (01-05):4
The above Fig. 1.1 Indicates the values are assigned to the various factors of the job such as skills which range from 01 to 10 points. In this way, the points are given under the standard range according to the concern of the job. The same thing is done for each job and then the addition is made to know the value or to determine the value of the job based on the above factors.
Job Grading(Classification) Method
Job grading or job classification method consists of the categorization of the job based on the criteria set by the organization. This evaluation method can easily understood why observing the various grades given to the positions of government organizations. Government job recruitment advertisements can easily show the classification of various jobs. Based on this classification or grading the salary system or remuneration is based.
Example
Specialist officers in banking recruitment requires higher qualifications, skills and experience than the requirement for professional officer’s recruitment. The grading(classification) of both these jobs is different as the criteria set by the organization are different for these two positions.
The criteria for the position of engineer and the criteria for the position of manager are different. And based on the criteria set by the organization which may be from the higher to the lower the remuneration or salary for that position is based.
Factor Comparison Method
The factor comparison method can be known as the combined method of ranking method and point factor method. It involves assigning the monetary values to the common factors of the job. After assigning the monetary values to the common factors of various jobs the comparison is made between the aggregate or total monetary value of each job.
As this method is involved in azure in the monetary values to the factors of the job, It becomes more complicated than any other method. Hence most companies do not prefer to implement this method due to the easiness of this method being less than any other method.
Competitive market analysis method
Competitive market analysis method of the job evaluation based on the external environmental data of the industry. Specifically, the similar positions in the market analyzed regarding remuneration commercial ready incentives and whole compensations given for the job.
This method is based on the data or information regarding a similar type of job in the market. This data includes how much salary incentives and remuneration are paid by other competitors or vis-a-vis competitors in the market for a similar position. After studying this information the organization comes to know where their job stands regarding job value.
To maintain the job turnover it is essential to get external information regarding the job value. This method helps an organization to maintain the stability of the tenure Principle in the organization. If competitors in the market are providing better Remuneration for the similar job then the employees will prefer to leave the organization and join that particular organization. Hence it is very necessary to identify the market value of the job so that the company can make the changes or improvements in the salary, wages, And all the monetary rewards given for that specific job in comparison with other similar jobs in competitors’ organizations.
Example
Remuneration given to engineers in various organizations varies depending upon the organization’s market position. But there is a specific value for that specific job for example job value of DBA (Database Administrator). The average salary given to the database administrator in the IT industry is more than 5,00,000 per annum. Any organization if paying less than the average salary cannot maintain or retain the employees for a long time.