Job Evaluation Techniques

Job evaluation determines the worth of the jobs in a company relative to one another. Evaluation analyzes the value of jobs and is the source of targeted job descriptions. Job evaluation assesses the differences in contributions between jobs, job content and value and provides the basis for compensation decisions. Four common techniques---ranking, classification, point method and factor comparison--- are often used by many job evaluation systems.

Job Evaluation by Ranking

The easiest and best-known evaluation method ranks each job compared with all other jobs, with a factor like job difficulty. An important part of job evaluation is consistency---all jobs are ranked with the same factor and compensation is based on the ranking order. This method, easy to understand and use, takes less time to implement than most others. It's relatively simple but doesn't go in-depth to target and highlight competencies in relation to job value in the organization.

Job Evaluation by Classification

Job classification is another easy and well-known job evaluation method that categorizes jobs into groups of relatively the same value for compensation. The groups are classes or grades and are categorized by similar compensation factors like independent judgment used, skills required and physical effort needed. This method's advantage is that many jobs are already grouped for pay ranges and organizational planning although class and grade descriptions can be difficult to define.

Job Evaluation by Point Method

The point method is a more-complicated, analytical technique. It involves assigning points based on several compensation factors and the degree to which they are present in each job, to arrive at a quantitative point rating. It is a widely used job evaluation technique.

Job Evaluation by Factor Comparison

Another popular job evaluation technique, the factor comparison, is a more in-depth ranking method. It ranks each job for several compensation factors like skill, knowledge and difficulty, which are combined into a total rating.

Who Performs Job Evaluations

Job evaluations are done by human resources departments, compensation specialists, consultants, auditors, managers and supervisors. They are part of a compensation system and can be used as the basis not only for pay but also to determine comparable worth, to create job descriptions, to develop titles, to plan for employee training, development and succession, and for business organization. Job evaluation is a valuable analytical tool to manage a business.

References

• Job Evaluation Methods
• Conduct a Job Evaluation
• Human Resource Management by Gary Dessler

Resources

• Job Evaluation Guide