A comprehensive job evaluation system helps you ensure that your company’s pay and promotion structure reflects an equitable system. Using a job evaluation system can be especially helpful to a small business, because it helps your company manage your resources more effectively and attract the most competent employees. Evaluating jobs using a point system involves identifying key factors associated with work at your company and assigning a point value to those factors. To determine the wage rate for each job, sum up the points. When evaluating job using a point system, use the resources at the U.S. Department of Labor's website for Compliance Assistance - Fair Labor Standards Act to ensure compliance with local, state and federal regulations.
Job Evaluation Methods
When HR professionals complete a job evaluation, they typically rank, classify or compare jobs functions. To rank jobs, arrange them from highest to lowest, in order of the level of difficulty in completing job tasks or value to the company. To classify jobs, group roles into broad categories, such as executives, managers, production personnel, office personnel and support staff. To compare jobs, evaluate roles based on factors such as mental effort, physical effort and working conditions. Using the point system, you select key jobs and identify the common factors or attributes, such as skills, accountability and effort. Then, you define sub-factors and associate a point value for each one.
Factors
Most point systems used in job evaluation systems evaluate the skills, accountability and effort required to perform each job. Sub-factors associated with the skills include the education required, as well as the communication skills and experience needed to complete job tasks effectively. Accountability sub-factors indicate the scope of responsibility, job complexity, and amount of budget allocated. Effort sub-factors describe the physical, emotional and mental demands of job tasks.
Levels
To evaluate each sub-factor, you need to define different levels or degrees, such as novice, expert and master. For example, educational requirements associated with a job may be a high school diploma at the novice level, a bachelor’s degree for the expert level, and a master’s degree for the master level. Tasks associated with the first degree or level involve completing tasks under supervision, while tasks at the second degree or level involve no supervision, and those at the master level or third degree supervise others. Assign point values for each sub-factor. Then, when evaluating jobs, you can enter a value and calculate the total. This allows you to determine the relative worth of a job at your company, and you can convert the total into hourly pay rates.
Strengths and Weaknesses
Using the point method, you can examine job roles in a systematic way. When a job changes, you don’t need to change the rating scale as a whole; you just re-calculate the total value of the job. Evaluating a job using the point system takes time and effort. Establishing comprehensive job descriptions typically requires validation by people doing the job as well as research about other people performing the same type of work at other companies.
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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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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