Types of Job Evaluations
Job evaluations help employers clarify job descriptions and decide if a job is paying fairly for the duties employees must perform. Evaluating the different positions in your company will help you recognize how important a job is to the viability of your organization so you can measure its value. Before evaluation begins, you must decide the method you will use. According to the U.S. Office of Personnel Management, there are five common methods of evaluation.
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Market Pricing
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The market pricing evaluation method requires looking at similar jobs to determine the job's worth. You can compare similar jobs in other companies in your geographical area of similar type and size to determine if you are paying market value, or you can review similar jobs within your own company.
Ranking
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Sonoma State University explains that the ranking method is one of the simplest methods of job evaluation. Qualified personnel rank the importance of a job to a company. Positions such as a department floor manager will rank higher than the custodian; thus the manager position should have higher pay. This method can prove difficult in the long-term as the number of positions within the company increase if you do not define your comparison basis.
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Job Slotting
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Utah Valley University describes job slotting as when a committee reviews jobs and places them in a high-to-low hierarchy in comparison to jobs of like value. This method can prove difficult if there are no benchmark jobs for comparison.
Whole Job Evaluation
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This method assesses the entire job and compares its responsibilities and requirements to similar jobs within the company. Whole job evaluation does not just compare the position, as market-pricing does; it examines all of the aspects of the job and assigns jobs to roles within the company. Jobs with similar roles have similar pay scales.
Point-Factor
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In a point-factor job evaluation, each factor of a position is given a set number of points. West Virginia University places points on a position based on skill, responsibility, effort and the working conditions of the job. The more points a position has, the higher the wages for the job. The problem with this type of evaluation is that the qualities and efforts of the individual employee generally are not taken into account, so it can be difficult to implement merit raises.
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