Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are arranged from highest to lowest, in order of their value or merit to the organization. Jobs also can be arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; and the job at the top of the list has the highest value and obviously the job at the bottom of the list will have the lowest value.

Jobs are usually ranked in each department and then the department rankings are combined to develop an organizational ranking.

The following table is a hypothetical illustration of ranking of jobs.

Table: Array of Jobs according to the Ranking MethodRank Monthly salaries1. Accountant $ 3,0002. Accounts clerk $ 1,8003. Purchase assistant $ 1,7004. Machine-operator $ 1,4005. Typist $ 9006. Office boy $ 600

The variation in payment of salaries depends on the variation of the nature of the job performed by the employees.

Simple Ranking requires that evaluators order or rank jobs according to their overall value to the organization.

Alternation Ranking involves ordering the job description alternately at each extreme. Agreement is reached among evaluators on which job is the most valuable, then the least valuable; then the next-most valued, then the next-least valued; and so on, until all the jobs have been ordered.

Paired Comparison method involves comparing all possible pairs of jobs under study.

Cost Clerk

File Clerk

Addresso-graph

Op.

Ledger

Clerk

Junior Typist

Order Clerk

Messenger

Total

Cost Clerk

File ClerkAddresso-graph

Op.

Ledger

Clerk

Junior Typist

Order Clerk

Messenger

Simple or easy to understand and practice;

Best suited for small organization;

Fast and less expensive;

Most commonly used

Ranking is highly subjective in nature and may offend many employees;

Rankings are difficult to develop in a large, complex organization;

Can be legally challenged

Unreliable

The general purpose of job classification is to create and maintain pay grades for comparable work across your organization. According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades.

Following is a brief description of such a classification in an office.1. Class I - Executives: Further classification under this

category may be Office manager, Deputy Office manager, Office superintendent, Departmental supervisor, etc.

2. Class II - Skilled workers: Under this category may have the Purchasing assistant, Cashier, Receipts clerk, etc.

3. Class III - Semiskilled workers: Under this category may come Steno typists, Machine-operators, Switchboard operators, etc.

4. Class IV - Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.

Less subjective when compared to the earlier ranking method;

Easy to understand and acceptable to almost all employees without hesitation;

Takes into account all the factors that a job comprises;

May produce same results as Point Method, but is less costly.

Not useful when jobs are very different from each other

It is difficult to write all-inclusive descriptions of a grade.

When individual job descriptions and grade descriptions do not match well, the evaluators have the tendency to classify the job using their subjective judgments.

A more systematic and scientific method of job evaluation. Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors to obtain a numerical value for each job and to arrive at a job structure. Thus it may be classified as a quantitative method.

Factor comparison itself is not widely used: it probably represents less than 10% of the installations of job evaluation plans. But the concepts on which it is based are incorporated in numerous job evaluation plans, including the one that is probably used the most, the Hay Plan.

The compensable factors used are usually (1) mental requirements, (2) physical requirements, (3) skill requirements, (4) responsibility, and (5) working conditions, and other relevant factors (for instance, know-how, problem solving abilities, accountability, etc.). These are considered to be universal factors found in all jobs. This means that one job-comparison scale for all jobs in the organization may be constructed, and this practice is often followed upon installation of factor comparison.

Analytical and objective. Reliable and valid as each job

is compared with all other jobs in terms of key factors.

Money values are assigned in

a fair way based on an agreed rank order fixed by the job evaluation committee.

Flexible as there is no upper limitation on the rating of a factor.

Difficult to understand, explain and operate.

Its use of the same criteria to assess all jobs is questionable as jobs differ across and within organizations.

Time consuming and costly.

The point-factor method, or point plan, involves rating each job on several compensable factors and adding the scores on each factor to obtain a point total for a job. A carefully worded rating scale is constructed for each compensable factor. This rating scale includes a definition of the factor, several divisions called degrees (also carefully defined), and a point score for each degree. The rating scales may be thought of as a set of rulers used to measure jobs.

The most frequent factors employed in point systems are:1. Skill (key factor): Education and training required,

Breadth/depth of experience required, Social skills required, Problem-solving skills, Degree of discretion/use of judgment, Creative thinking;

2. Responsibility/Accountability: Breadth of responsibility, Specialized responsibility, Complexity of the work, Degree of freedom to act, Number and nature of subordinate staff, Extent of accountability for equipment/plant, Extent of accountability for product/materials;

3. Effort: Mental demands of a job, Physical demands of a job, Degree of potential stress.

The educational requirements (sub factor) under the skill (key factor) may be expressed thus in the order of importance.

Degree Define1. Able to carry out simple calculations;

High School educated2. Does all the clerical operations;

computer literate; graduate3. Handles mail, develops contacts, takes

initiative and does work independently; post graduate

 Assign point values to degrees after fixing a

relative value for each key factor.

Table: Point Values to Factors along a ScalePoint values for Degrees

TotalFactor 1 2 3 4 5Skill 10 20 30 40 50 150Physical effort 8 16 24 32 40 120Mental effort 5 10 15 20 25 75Responsibility 7 14 21 28 35 105Working conditions 6 12 18 24 30 90

Maximum total points of all factors depending on their importance to job = 540 (Bank Officer)

Find the maximum number of points assigned to each job (after adding up the point values of all sub-factors of such a job). This would help in finding the relative worth of a job. For instance, the maximum points assigned to an officer’s job in a bank come to 540. The manager’s job, after adding up key factors + sub factors’ points, may be getting a point value of, say 650 from the job evaluation committee. This job is now priced at a higher level.

Once the worth of a job in terms of total points is expressed, the points are converted into money values keeping in view the hourly/daily wage rates. A wage survey, usually, is undertaken to collect wage rates of certain key jobs in the organization. Let’s explain this:

Table: Conversion of Job Grade Points into Money Value

Point range Daily wage rate (Rs) Job grades of key bank officials

500-600 300-400 1 Officer600-700 400-500 2 Accountant700-800 500-600 3 Manager I Scale800-900 600-700 4 Manager II Scale900-1,000 700-800 5 Manager III Scale

Highly stable over time

Perceived as valid by users and employees

Likely to be reliable among committee that assesses the jobs

Provides good data to prepare a response to an appeal

Time, money, and effort required to set up

Relies heavily on key (benchmark) jobs, so if key jobs and correct pay rates don’t exist, the point method may not be valid

Job evaluation is a powerful tool in the compensation and benefits specialist's repertoire. Effective job evaluation helps you gather information to develop job descriptions that meet the changing needs of your organization. By implementing a successful job evaluation, you can develop an equitable compensation plan and attract and retain high-performing and talented employees.