Point factor method of job evaluation

Point Rating technique  is the most widely used system of job evaluation. The  method evaluates the compensable factors of each job. It involves a more  detailed, quantitative and analytical approach to the measurement of job work.  Under this method of job evaluation, jobs are broke down based on various identifiable factors  such as skill, effort, training, knowledge, hazards, responsibilities and so on.  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.

Point Rating System requires six steps and is usually implemented by a job evaluation  committee or by an individual analyst.

1. Determine critical factors — The points rating method includes the  following job factors for allocation of points:
   • Safety of other;
   • Equipment of materials;
   • Assisting trainees;
   • Production or service quality.
2. Determine the levels of factors — Since, the amount of responsibility or  other factors may vary from job t job, the point rating method rates  several levels associated with each factor. These levels help analysts  reward different degrees of responsibility, skill, and other critical  factors.
3. Allocate points to sub-factors – With the factors listed down one side  and the levels placed across the top, the result is a point method matrix.  Starting with highest level, the job evaluation committee subjectively  assigns the maximum possible points to each sub-factor. The allocation  allows the committee to give very precise weights to each element of the  job.
4. Allocate points to levels — Once the total points for each job element are  assigned under highest level, analysts allocate points across each row to  reflect the importance of the different levels.
5. Develop points manually — Analysts then develop a point manual. It  contains a written explanation of each job element. It also defines what  is expected for the various levels of each sub-factor. These information  is needed to assign jobs to their appropriate levels.
6. Apply the point system — When the point matrix and manual are ready,  the relative value of each job can be determined. This process is  subjective. It requires specialists to compare job descriptions with the  point manual for each sub-factor. The match between the job description  and the point manual statement reveals the level and points for each subfactor  of every job. The points for each sub-factor are added to find the  total number of points for the job. After the total points for each job are  known, the jobs re ranked.

Merits – The points rating has several advantages. The major merits of the  method are:

• It is the most comprehensive and accurate method of job evaluation.
• Prejudice and human judgement are minimized. The method can not be  manipulated.
• Being the systematic method, workers of the organization favor this  method.
• The scales developed in this method can be used for long time.
• Jobs can be easily placed in distinct categories.

Demerits – The points rating method also has some disadvantages. The major  demerits of the method are:

• It is both time-consuming and expensive method.
• It is difficult to understand for an average worker.
• A lot of clerical work is involved in recording rating scales.
• It is not suitable for managerial jobs wherein the work content is not  measurable in quantitative terms.

Credit: Compensation Management-CU

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