Human Resource Management

Job Evaluation

MBA,1st Year
Facilitator: Subhra Pattnaik

Human Resource Management 8/24/17

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What is an unique job?

A Unique Job
is a distinct role that may be performed by
one or more incumbents and
encompasses roles with similar work
profiles and responsibilities.
Cashier in Cashier in
is person independent and refers to the Mumbai New Delhi
Branch Branch
role/job being performed, not the
incumbent role holder or job title or
Same
designation Unique
Also referred to as Unique role or Unique Job
position.

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What is Job Evaluation?

Job Evaluation (JE) is a consistent and systematic

process for defining the relative size or importance of
unique jobs in an organization based on job content

Factors emphasized for JE are:

Skills
Effort
Responsibility
Working conditions

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Why do we need to evaluate jobs?
1
JE helps to recognize the relative importance of different unique jobs to
the organization.

2
Unique jobs with the same level of responsibilities and accountabilities
must fall within the same band for the purpose of internal equity

3
JE categorizes unique jobs into bands based on this logic.

4
In turn, these bands enable an objective approach for the development
and design of other key HRM systems.

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Where can the results of JE be used?

1 2

Determination of functional levels of

Design a fair and transparent Pay and
responsibility and development of
Grading Structure
standard JDs
Results
of Job
Evaluati 3 4
on can be
applied Determining and evaluating basic
Creating Total Rewards package aligned
to .. principles of company pay policy and
to Job Grades
Benefits e.g. Car, Bonus etc

5 6

Enabling key HR mechanisms e.g. Reviewing Organization Structure and all

Career Paths and Succession Planning jobs post any large-scale change

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JE helps us create job bands

Job Bands Functional Structure

Work levels corresponding to job bands

Band A Job 8
(Job 8)

Band B
(Jobs 5,6,7) Job 5 Job 6 Job 7

Band C
(Jobs 2,3,4) Job 2 Job 3 Job 4

Band D Job 1
(Job 1)

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Pay grades are then mapped on to job bands
Job Bands Pay Grades

Band A
(Job 8)

Grade A
Job 8
Band B

Rupees
(Jobs 5,6,7) Grade B
Jobs 5,6,7
Grade C
Band C Jobs 2,3,4
(Jobs 2,3,4) Grade D
Job 1

Band D
(Job 1)
Job Value

Pay bands stretch across more than one job bands in order to
accommodate easy promotions, without having to necessarily change
the pay band.
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Sources of data for Job evaluation

1. Job Descriptions, if drafted

properly and updated, can be used
for JE
2. Separate data sheets/ fact sheets
can be created for each unique job
for the purpose of JE
3. The data sheet/ fact sheet must
reveal information about the job
that is in line with the JE
parameters.

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The process of JE

Articulating objective

Selecting the most appropriate method

Making a project plan

Communicating with employees

Selecting benchmark jobs

Analysing benchmark jobs

Evaluating select benchmark jobs

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Who does the Job Evaluation?

1. HR executive
2. External experts/ analysts/ consultants
3. Job evaluation committee comprising mostly HoDs.

The JE committee needs to be trained about the JE methods and

process first by experts.
The results and process of the JE needs to be approved by the top
management in all cases.

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Job Evaluation methods

Job Evaluation
methods

Qualitative/ Quantitative/
Subjective Objective

Job Ranking
Factor Comparision
Job Classification/
Point method
Grading

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Comparing different methods

Qualitative Quantitative

Jobs compared
Factor
against jobs Job Ranking
comparision

Jobs compared
Job Classification Point method
against a scale

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Job Ranking (1/2)

1. Ranking method involves ranking jobs according to the perceived

overall value of each job.
2. The basis of ranking could be complexity of the job, criticality of the
job to the organizational success and competencies needed to do the
job.
3. However, the jobs are examined as whole rather than on the basis of
important factors in the job.
4. Job at the top of the list has highest perceived value and at the bottom
of the list has the lowest perceived value.
5. Usually, each member in the JE committee does the ranking
individually and then the average of ranks is considered for the jobs for
final ranking.

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Job Ranking (2/2)

Advantages
1. Easy to understand and apply
2. Effective with small number of jobs. (less than 40)

Limitations
3. No defined standards of judgement. Highly subjective.
4. Difficult to administer when number of jobs increase.
5. Every time a new job is added, it has to be compared with the older ones
to be ranked. That means, the ranking method has to be repeated every
time a new job comes in.

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Job classification (1/2)

1. Jobs are slotted into pre-defined job grades or job classes by

comparing the whole job description with the grade/ class definition.
2. The job grades are defined on the basis of kinds and levels of
responsibilities that should fall in that grade. It might also pre-define
certain job titles that might fall into that grade.
3. The jobs are examined as whole and then matched with grade
definition to decide which grade they fit the best to.
4. Example:
Class I Executives: Credit manager, floor manager, accounts manager
Class II Skilled employees : Collection executive, sales coordinator, accounts executive
Class III Semi-skilled employees : coordinators, steno-typists, receptionists
Class IV Semi-skilled employees : Clerks, office boys, waiters etc.

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Job classification (2/2)

Advantages
1. Easy to understand and apply
2. Grade definition exists independent of the jobs. Hence, there is no
problem classifying new jobs into grades.

Limitations
3. Difficult to write objective definitions of each grade/ class
4. Over-simplifies the sharp differences between jobs by grouping too
many jobs into the same grade.
5. Evaluators use subjective judgement to group jobs into grades when
they do not find exact match between JDs and grade definitions. This
might affect a group of employees.

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Factor comparision(1/3)

1. Jobs are ranked as per a series of factors rather than being ranked as
whole jobs.
2. Compensable factors : Skill, Mental requirement, physical
requirement, supervisory responsibilities, working conditions etc. are
commonly used.
3. The present wages for the job is divided amongst the factors as per the
weightage of that factor (importance of that factor) in doing the job.
4. Thereby, it gives us a wage rate for each factor for each benchmark job.
5. Additional jobs are then compared with the benchmark jobs to
establish pay rates for each factor. These rates are summed up to get
the total wage for the job.

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 Factor comparision(2/3)

What will be the wage rate for a fitter?

If a fitter matches electrician in skill (6), mechanist in mental requirement(4), assembler in
physical requirement (1.5), toolmaker in responsibility (3), assembler in working conditions
(5.5), his wage rate will be (6+4+1.5+3+5.5)=20

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Factor comparision(3/3)

Advantages
1. Objective and analytical
2. Detailed approach. Hence, more reliable as each job is compared with
every other job.
Limitations
3. Time-consuming and costly
4. Difficult to understand and explain to others.
5. It uses same criteria/ factors to review each job while jobs might differ
across the organization.

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Point method(1/5)

1. Jobs are rated on certain compensable factors and the score on each
factor is summed up to give the total job score.
2. Compensable factors are chosen and divided into sub-factors. Sub-
factors are further divided into degrees by choosing a scale for each
factor.
3. Jobs are then matched against the scale to receive score on individual
factors.
4. Factors might have equal weights or might have weightage assigned as
per their importance to the organizational success.
5. One of the most popular scales for point method is the Hay Job
evaluation scales.

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Point method The Hay factors (2/5)

Factor Sub-factors/ dimensions

Professional know-how
Know-how Business awareness
Social competence
Scope of thinking
Problem-solving
Degree of difficulty
Freedom to act
Accountability Job impact
Magnitude of job measured in appropriate terms
Physical effort
Physical environment
Working conditions
Sensory attention
Mental stress

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Point method scales for dimensions(3/5)
Illu
Job Evaluation 1 2 3 4 5 stra
Factors
tive
Business Aware of only his/ Aware of the tasks Aware of tasks/ job roles even
awareness her own task performed by others inside outside his/ her own team
his/ her own team
Social Limited Interacts with employees Interacts with even external
competence interaction; with across all functions and stakeholders like vendors,
only team departments inside the suppliers, customers etc.
members organization
Scope of Operates on Solves problems by using Creates new solutions/
thinking SOPs*. Solves defined methods/ operating methods to solve problems that
problems by using procedures. arise.
certain defined
solutions.
Freedom to act Follows orders. Moderate decision making Has the autonomy to take
Needs to get things authority. Might not need to decisions on own and proceed
authorized from get everything authorized with task without getting it
senior for most from senior manager. authorized from any other
decisions authority
Financial /job No financial Has financial targets to Has budgetary control. Sets
impact targets or achieve or recommends financial targets
budgetary control budget for the year

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Point method (4/5 )
Equal weightages to factors
Factors Know how Problem solving
Total job
Sub-factors/ Professiona Business Social Scope of Degree of
score/value
dimesniosn l Know how Awareness Competence thinking difficulty
/ worth
Jobs
Clerk 2 1 3 1 2 9
Finance Manager 4 3 3 3 4 17

Assigned weightages to factors

Factors Know how (60%) Problem solving (40%)
Total
Sub-factors/ Professiona Business Social Scope of Degree of
job
dimesniosn l Know how Awareness Competence thinking difficulty
score
Clerk 2 1 3 1 2 4.8
Total score = (2+1+3)*0.6 + (1+2)*0.4 = 3.6+1.2 = 4.8

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Point method(5/5)

Advantages
1. Objective and analytical
2. Avoids biases by pre-defining the scale for each factor
3. Can be applied to any number of jobs as well as new jobs
Limitations
4. Time-consuming, complex and costly.
5. The standard/ scales developed for the factors might have built-in biases
which might affect minority work groups.
6. Subjective judgement of evaluator still comes to play while rating jobs
against each factor on the factor scale.

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Rules to create ranges for job bands

1. Select the range so that most of the roles fall into their respective bands. For.
E.g. most Assistant Managers fall into the AM band and most managers also fall
into the manager band and so on.
2. However, do not stretch the range so much as to even include the outlier
positions/ roles. For e.g. in case all HoD roles have scored between 21-28, however
there is one HoD role that has scored 18, we should not sretch the HoD band score
range to become 18-28. It should remain at 21-28. We need to find out the outliers
and address the discrepancies by either job re-designing or organization re-
structuring.
3. Ranges are mostly discontinuous in nature.
4. The width of a band/ score range increases as we move up the hierarchy. This is
because as we go up the responsibilities get more and more diverse and varied
which isnt the case at lower levels.
5. The jump (Minimum score of higher band- maximum score of lower band )
should also increase as we move up because we assume that promotions get
tougher as we move up due to pyramidal structure of organizations. Hence, the
incremental difference in scores goes on increasing.

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Case 1: Job falling below the band

Job band Job score range

Chief Manager (CM) 33-41
Manager (Mgr) 23-30
Assistant Manager (AM) 15-21

However, the role of AM-payroll in the finance and payroll team fell below
the AM score range with a job score of 13. When we looked at the
organization structure, we found this.

CM- Finance and

CM- Finance and
Payroll
Payroll

Mgr-Finance & Mgr-Finance &

Mgr-Finance & Mgr-Finance &
payroll payroll
payroll payroll

AM- Finance AM-Finance AM-payroll AM- Fin & AM-Fin & AM-Fin &
payroll payroll payroll Job re-design

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Case 2: Job falling above the band

Job band Job score range

Chief Manager (CM) 33-41
Manager (Mgr) 23-30
Assistant Manager (AM) 15-21

However, the role of AM-Marketing fell above the AM score range with a job
score of 23. When we looked at the organization structure, we found this.
Structural changes: introduce new positions or
merge already existing ones
CM- Marketing CM- Marketing
& Sales & Sales

Mgr- sales Mgr- Exports Mgr- sales Mgr- Marketing Mgr-

Exports

AM- AM-
AM- Sales AM-Exports AM- Sales AM-Exports
Marketing Marketing

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Case 3: Job falling between two bands

Job band Job score range

Chief Manager (CM) 33-41
Manager (Mgr) 23-30
Assistant Manager (AM) 15-21

However, the role of Mgr- Premises in the Admin and Premises department did not fall into any
job band. With a job score of 22, it fell between the AM and Mgr band. When we looked at the
organization structure, we found this.

Job re-design &

CM- Admin & CM- Admin & structural changes
Premises Premises

Mgr-Admin &
Mgr-Admin Mgr-Premises
Premises

AM- Admin AM-Admin & AM- Admin

AM- Admin AM-Admin AM- Admin
&P P &P

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