Quantitative Methods of Job Evaluation
Following quantitative methods are used in job evaluation:
(a) Point systems
(b) Factor Comparison Method
1. Point System
This is the most widely used technique of job evaluation. It involves a quantitative and analytical approach to the measurement of job value. A number of important factors to be considered in each job are identified. The degree of each factor is also determined for assigning points.
Various factors are assigned points and the sum of them gives us an index for the relative importance or weightage of the jobs that are related. The point system is based on the assumption that important factors of each job can be determined for evaluating it. The points of different jobs are later converted into wage rates.
Following steps are taken for job evaluation:
1. Type of Jobs to be Evaluated
There are a number of jobs in every organization, ranging from top executives to unskilled workers. Similar jobs should be put in the same class or category for evaluation purposes. There should be a separate evaluation procedure for each class because the factors affecting them will be different. The job requirement of a supervisor will be different from that of an unskilled worker or semi-skilled labor.
2. Number of Factors to be Used
It is very difficult to select the number of factors required for evaluating a job. The number of factors should be such that all aspects of a job are evaluated. The number of factors used varies from enterprise to enterprise, ranging from 3 to as many as 50.
Common factors include:
- Education
- Job conditions
- Training
- Skills
- Physical ability
- Mental requirements
- Responsibility
3. Determination of Degrees
Each factor of evaluation should be further subdivided into degrees. For example, experience (a commonly used factor) may be subdivided into five degrees:
- 3 to 6 months – 5 points
- 6 months to 1 year – 10 points
- 1 to 2 years – 15 points
- 2 to 4 years – 20 points
- Over 4 years – 25 points
4. Assigning of Weights
Each factor may be assigned a weight as per its significance. For executives, mental requirements will have more weightage than physical requirements.
5. Assigning Money Values to Points
The points assigned to each factor are summed up to find the value of a job. The value of jobs is translated into monetary terms using a predetermined formula. For example, if it is assumed that 1 point equals ₹20, then 160 points are equivalent to ₹3,200.
In this manner, the evaluation is done using the point system.
Advantages of the Point System
- It gives a numerical basis for wage differentials.
- The scale, once decided, can be used for a long period.
- A job can be easily evaluated in monetary terms as per the assigned points.
- The system, being systematic and objective, is more acceptable to workers and management.
- The element of human bias is minimized.
- Useful even when the number of jobs is very large.
- More accurate compared to earlier methods.
Limitations of the Point System
- High cost – not suitable for small or medium enterprises.
- Time-consuming – defining job factors and degrees takes time.
- Selecting factors and sub-factors is a difficult task.
- Allotting marks to various factors and sub-factors can be complex.
2. Factor Comparison Method
This method is a combination of the ranking and point system of job evaluation. It was first developed by E.J. Benge in 1926. In this method, the relative rank of various jobs is evaluated in relation to a monetary scale.
Some key jobs are identified first, then ranked by considering one factor at a time. Generally, five factors are evaluated for each job:
- Mental effort
- Skill
- Physical effort
- Responsibilities
- Working conditions
Following steps are taken under Factor Comparison Method:
1. Selecting Factors to be Used
The first step is to select the factors for evaluation. The people preparing job descriptions should be properly guided about these factors.
Commonly used factors:
- Mental effort
- Physical effort
- Skill needed
- Responsibility
- Working conditions
2. Selection of Key Jobs
Select a few key jobs to act as standards. These jobs must be clearly defined and mutually agreed upon by both management and employees. They should cover the range from the lowest to the highest-paid positions.
3. Ranking of Key Jobs
The key jobs are ranked based on each of the five factors.
4. Valuing the Factors
Each factor of a key job is assigned a basic pay. The pay should range from the lowest to the highest level.
5. Comparison of Jobs
All jobs are then compared to key jobs factor by factor to determine their relative importance. Their monetary value is derived from this comparison.
6. Establishing Wage Structure
By assigning monetary value to each factor of various jobs, a wage structure is created by summing the values.
Advantages of Factor Comparison Method
- A systematic method where every job factor is quantified.
- Can be easily explained to workers.
- The value of each job is determined by comparing with key jobs.
- Limited number of factors helps in avoiding overlap.
- Useful for evaluating unlike jobs.
Limitations of Factor Comparison Method
- Difficult to operate – wrong choice of key jobs can lead to errors.
- Frequent changes in wage levels require adjustments.
- Complex system – hard to understand for non-supervisory or unskilled workers.
- Expensive – not ideal for small-scale businesses.
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