Job Evaluation Point Method

Job evaluation is a practical technique designed to determine the relative worth of a job. While job evaluation does not determine the pay rate for a job, it establishes a basis for ranking jobs. One method used to categorize jobs is the point method. The point method is a more quantitative technique. The objective of the point method is to award points for various aspects of the job.

Compensable Factors

The job evaluation point method system primarily uses several compensable factors, each having several degrees based on how complex the task is. For example, using decision making as a compensable factor, degrees can measure how much a job requires routine versus non-routine decision making and the impact of these decisions on the organization's goals. The compensable factors typically used are skills, responsibilities, effort and working conditions. Each factor should be defined carefully, since this will result in higher accuracy. Once these factors are divided into levels of degrees, points can be assigned to them. Each job is rated using this job-evaluation instrument. The points assigned to each factor of a job are then totaled up to form a point score for the job.

Determine/Collect Information

The first step in the point method of job evaluation is to determine clusters of jobs to be evaluated. In organizations, jobs vary by departments; typically a manager will not use a one-point rating plan for all jobs in an organization. Jobs are clustered by type (sales jobs, factory jobs, clerical jobs), and an evaluation committee develops a point plan for one cluster or group at a time. After that, managers perform a job analysis, job description and job specification for each job.

Select/Define

A manager selects compensable factors like skills, physical requirements or problem-solving. Depending on the cluster of jobs, each might have its own compensable factors. Next the manager must accurately define the compensable factors so evaluation committee members can correctly apply the factors. An organization's human resource specialist typically defines compensable factors.

Define/Determine

Here you will define several degrees for each factor. This will allow your raters to judge the amount of degree of a factor existing in a job. For example, for the factor "problem-solving" you might choose to have five degrees, ranging from "seldom solve problems" through "uses independent judgment in making decisions." According to Gary Dessler, "the number of degrees usually does not exceed five or six." These numbers depend solely on judgment. The next step is to determine how much weight to assign to each factor. This is vital, because some jobs will be more important than others. Typically, determining the weight that should be assigned to each factor is done by the evaluation committee. They will assign weights by percentage.

Assign/Rate

Now that weights have been assigned to each degree in percentage terms, you can assign points to each factor. For example, suppose you decided to use 400 points in the point plan. Because the factor "problem-solving" weight is 30.5 percent, it would be assigned a total of 122 points. You arrive at your points by taking the points you use in the point plan (400) multiplied by the percentage of that factor (30.5 percent). As a result, if you choose to assign 122 points to problem-solving, this means that the highest degree of problem-solving would carry 122 points. To find the lowest degree, take the total points that you will use for the point plan and divide it by how many factors you have. This will give you the points for the lowest degree. The only thing left to do now is to rate your jobs, this typically is done by the evaluation committee.

References

• "Human Resource Management"; Gary Dessler; 2008