What is the best method for job evaluation?

Definition: The Job Evaluation is the process of assessing the relative worth of the jobs in an organization. The jobs are evaluated on the basis of its content and the complexity involved in its operations and thus, positioned according to its importance.

The purpose of the job evaluation is to have a satisfactory wage differential.

There are non-analytical and analytical job evaluation methods that are employed by the organizations to realize the worth of a set of jobs.

Non-analytical Job Evaluation Methods

Ranking Method: This is the simplest and an inexpensive job evaluation method, wherein the jobs are ranked from he highest to the lowest on the basis of their importance in the organization. In this method, the overall job is compared with the other set of jobs and then is given a rank on the basis of its content and complexity in performing it.
Here the job is not broken into the factors, an overall analysis of the job is done. The main advantage of the ranking method is, it is very easy to understand and is least expensive. But however it is not free from the limitations, it is subjective in nature due to which employees may feel offended, and also, it may not be fruitful in the case of big organizations.
Job Grading Method: Also known as Job-Classification Method. Under this method the job grades or classes are predetermined and then each job is assigned to these and is evaluated accordingly.
For Example Class, I, comprise of the managerial level people under which sub-classification is done on the basis of the job roles such as office manager, department managers, departmental supervisor, etc.
The advantage of this method is that it is less subjective as compared to the raking method and is acceptable to the employees. And also, the entire job is compared against the other jobs and is not broken into factors. The major limitation of this method is that the jobs may differ with respect to their content and the complexity and by placing all under one category the results may be overestimated or underestimated.

Analytical Job Evaluation Methods

Factor-Comparison Method: Under this method, the job is evaluated, and the ranks are given on the basis of a series of factors Viz. Mental effort, physical effort, skills required supervisory responsibilities, working conditions, and other relevant factors. These factors are assumed to be constant for each set of jobs. Thus, each job is compared against each other on this basis and is ranked accordingly.The advantage of this method is that it is consistent and less subjective, thus appreciable by all. But however it is the most complex and an expensive method.
Point-Ranking Method: Under this method, each job’s key factor is identified and then the subfactors are determined. These sub-factors are then assigned the points by its importance.
For example, the key factor to perform a job is skills, and then it can be further classified into sub-factors such as training required, communication skills, social skills, persuasion skills, etc.
The point ranking method is less subjective and is an error free as the rater sees the job from all the perspectives. But however it is a complex method and is time-consuming since the points and wage scale has to be decided for each factor and the sub factors.

The important thing to note is, the job evaluation is considered only with the analysis of a job and not with the job holders.

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What is Job Evaluation?

How do you know what a certain position should pay? What impact does a position have on the business’s success? What do other companies pay for this set of responsibilities? These are common questions when deciding how to compensate a job in your organization. To help make this determination fairly, HR engages in what’s called a job evaluation.

Once a job evaluation has been done and you’ve posted your job listing online, then comes the hard part: keeping track of all your applicants and interviewing them in a timely manner. Luckily, Eddy has created an HR software that helps you do just that in the simplest way possible. Check out Eddy today to see how we can help you thrive not only during the hiring process but also throughout the entire employee lifecycle.

Job Evaluation Definition

A job evaluation is the process of establishing how much compensation to allocate to a job. This process involves using internal and external data to determine what a given position’s salary range should be, what related positions should pay, and what benefits are appropriate for a given job.

Common job evaluation examples include single-position evaluations for newly created jobs, reevaluations of jobs to make salaries more competitive or equitable, and company-wide job evaluations used to restructure the entire compensation program.

Job Evaluation versus Performance Appraisal

A performance appraisal evaluates an employee, whereas a job evaluation evaluates the position itself, without considering who is in that position. (Performance appraisals are also called performance evaluations or performance reviews.)

Why Perform Job Evaluations?

Although the process can be difficult, job evaluations bring a lot of benefits to the table, including:

Helping you adjust to company growth. Many things happen when your company is growing. Your budget will change, you’ll have to fill new positions, and you may need more money to allocate to new jobs. A job evaluation can help prepare for these changes.
Keeping your salaries competitive. Job evaluations that use external data will help you understand how competitive your compensation plans are compared to your market competitors.
Ensuring pay equity. Job evaluations can reveal pay inequities, allowing you to eliminate them before they become problems.
Executing retention and career development strategies. One of the primary reasons employees leave a job is to accept a promotional position. Job evaluations can help you prevent this by finding opportunities to develop employees. For example, job evaluations can help you create promotion paths or retitle positions to reflect an employee’s increased responsibilities.

Job Evaluation Methods

Job evaluations come in many forms and sizes, but all methods boil down to two factors: comparison and data.

That is, all job evaluation methods either help you understand how a particular position compares to other positions within the organization (internal comparison), or how a position is valued across the job market (external comparison). All evaluation methods use either qualitative data, which makes comparisons by evaluating the qualities and characteristics of a position or quantitative data, which makes comparisons by attaching numerical values to each position.

Internal Methods

Classification Method

Classification, a qualitative method, involves either writing or analyzing job descriptions and then placing them into separate grade classifications. Grade classifications should reflect different job characteristics, such as seniority, job responsibilities, and skill level. Grade classifications might include vice president, director, assistant director, senior manager, manager and coordinator.

Grades should be created for each job family or department. Once they’re classified, their relative impact on the company’s success will determine compensation.

This method is relatively easy to complete. However, it’s also largely subjective.

Point Factor Method

The point factor method is the most commonly used quantitative method. It uses a point system to determine the appropriate compensation for a given position. This point system is created by establishing factors that influence compensation (such as skill or effort), and then assigning points to a position based on these factors. The total number of points determines compensation.

Ranking Method

Ranking is a very simple qualitative method where all jobs in the company are ranked into a hierarchy. The more important a particular job is to the company, the higher it’s ranked. Unlike classification, ranking doesn’t involve creating grades. This method is very subjective and is best used along with another method to prevent errors.

Factor Comparison Method

The factor comparison method is a complex quantitative method that combines the point factor method and the ranking method. First, just like the point factor method, factors that influence compensation must be chosen and assigned.

Then, instead of establishing a point system, benchmark jobs that HR knows are paid appropriately are used to determine how each factor should be measured. Monetary values are then used in place of points. These values are then applied to other jobs to determine compensation.

External Method

Competitive Market Analysis Method

Competitive market analysis is a quantitative method focused on determining how competitive a company’s salaries are. This method is straightforward. Analysis involves obtaining market data—usually from third parties like PayScale or Glassdoor—and then comparing the salaries in the data set to the company’s salaries for the same jobs. External data usually needs to be purchased.

How to Conduct a Job Evaluation

No matter the method or size, a successful job evaluation requires planning and time. Below, we’ve created a step-by-step process to help you plan for any job evaluation.

Step 1: Determine the Scope and Purpose of the Job Evaluation

Is this a job evaluation for one job, a department, or the entire company? Is the evaluation for a new job, or are you reevaluating a job? Are you adjusting to budget cuts or growth?

Answering these and other questions related to scope and purpose will help you determine how much time the job evaluation will take, who to communicate and collaborate with, and which method is most appropriate.

Step 2: Select the Appropriate Method

It’s important to choose the best method for your established scope and purpose. For example, if your purpose is to determine whether your compensation plan is competitive, you won’t use the same method you would use to adjust to a new budget constraint.

Answering the questions in Step 1 will help you determine which method will be best suited for you. However, other factors to consider include:

Budget. Your company may establish a budget for the job evaluation. This may impact which kind of method you use because some methods require more time and money than others.
Timeline. Some methods take more time than others. If, for example, you’ve discovered a pay inequity, the job evaluation method you choose to adjust their pay will be much faster than if you’re organizing a job evaluation for next year’s recruitment cycle.
Company size. How many employees you have will help you determine whether one of the more complex methods is really necessary.
Access to data. You may not have access to all the data you need. This may be because your HR software can’t provide you the reports you need, or maybe your company has never purchased external salary data before.

Step 3: Compile the Necessary Documents and Data

To execute a job evaluation, you’ll have to pull a lot of data from your HRS software, if you have it, and other locations. Information you will need includes:

Current salaries
Company hierarchy, a list of job families, or similar data
Job descriptions with job responsibilities
Market salary data (if applicable)
Workforce demographics, specifically for pay equity
Data collected from employees and supervisors regarding job responsibilities, degree of difficulty, etc…

Some of this information may not be readily available. For example, you may need to create questionnaires for supervisors or employees, or request approval to contract with a third party for external data. If this is the case, consider preparing these requests before launching the evaluation.

Step 4: Test Your Methods on a Sample

With most job evaluation methods, you will have quite a bit of flexibility to decide how it’s structured and rolled out. You will be able to choose which factors to use, how to organize your company hierarchy, or which third parties to use for any external data.

Once you make your initial choices, test your method using sample jobs or sample job groups in your company. Troubleshooting in this way will increase accuracy and help reveal subjectivity.

Step 5: Keep Stakeholders Informed

Job evaluations often require input from managers and employees on issues such as current work responsibilities. Requesting this kind of input can feel intrusive. If communication is not clear and transparent, employees can justifiably become upset and concerned about their job security. In turn, job evaluations can become very difficult to execute.

To gain support, keep stakeholders such as supervisors informed of progress, communicate updates ahead of time so that no employee is caught off guard, and be transparent about any policies associated with the job evaluation.

These Responsibilities Can Be Scary, But They Don’t Need to Be Hard

HR professionals get handed a lot of difficult responsibilities and that can lead to feelings of inadequacy and doubt, especially if you’re fairly new to this career. Eddy is completely on your side though and is here to help every step of the way. Check out Eddy today to see how we can simplify your HR tasks and responsibilities so you can enjoy the fun and exciting parts of being an HR professional even more.

What is the most commonly used method of job evaluation?

The point factor method is the most commonly used approach to job evaluation. This method identifies four primary compensable factors used to determine pay. These factors include: Skills (years of experience, level of education and overall ability)

Which method is a method of job evaluation?

Four primary methods of job evaluations used to set compensation levels are point factor, factor comparison, job ranking and job classification.

Which job evaluation method is used by most modern employees?

73) Which job evaluation method is used by most modern employers? A) job classification method B) job grading method C) ranking method D) point method Answer: D Explanation: D) The point method of job evaluation is the most popular job evaluation method today.

How do you do a job evaluation?

10 steps to developing a successful job evaluation.

Outlining the job. ... .

Selecting a job evaluation method. ... .

Ranking method. ... .

Classification method. ... .

Hay or point method. ... .

Decide what factors you most value. ... .

Assess the job in terms of these factors. ... .

Rank this job relative to the other jobs in your organisation..