Which evaluation is used to determine relative worth of jobs of the organization?
For fixing compensation to different jobs, it is essential that there is internal equity and consistency among different job holders. Job evaluation is the process of determining the relative worth of different categories of jobs by analyzing their responsibilities and, consequently, fixation of their remuneration. The basic objective of job evaluation is to determine the relative contributions that the performance of different jobs makes towards the realization of organisational objectives. Show
There are four basic methods of job evaluation: ranking method, job grading method, point method and factor comparison method. Out of these, first two methods are non-quantitative and also known as traditional, non-analytical or summary methods. The last two methods of job evaluation are quantitative, also known as analytical methods, and use various quantitative techniques in evaluating a job. The basic difference between qualitative and quantitative methods of job evaluation is in terms of;
Usually, in practice, a combination of different methods is followed. Based on this concept, some other methods have also been developed. 1. Ranking MethodIn the ranking method of job evaluation, a whole job is compared with others and rank is provided on the basis of this comparison. The usual process followed in this method is as under:
Merits Ranking method has certain facial merits. Some of these merits are as follows:
Demerits Since ranking method of job evaluation is qualitative and non-analytical. It suffers from the following limitations:
2. Grading MethodJob grading method also known as job classification method establishes various grades for different categories of jobs. For example, jobs of an operative may be classified as unskilled, semi-skilled, skilled and highly-skilled. The process followed in this method is as under:
Merits Grading system of job evaluation particularly in government jobs is quite popular as this has certain merits over the ranking method. These are as follows:
Demerits This system of job evaluation suffers with the following limitations:
3. Point MethodPoint method of job evaluation is widely used in business organisations. It is an analytical and quantitative method which determines the relative worth of a job on the basis of points alloted to each specific factor of a job. The sum total to these points allotted to various job factors is the worth of the job. This total is compared with that of other jobs and relative worth of various jobs is determined. Read More: Point Rating Method of Job Evaluation 4. Factor Comparison MethodThis method, also known as key job method, was originally developed at the Philadelphia Rapid Transit Company, USA by Eugene J.Benge in 1926 to overcome two major problems faced in point method of job evaluation. viz. determining the relative importance of factors and describing their degrees. In this method, each factor of a job is compared with the same factor of the other jobs or the key job either defined or existing one. When all factors are compared, the final rating is arrived at by adding the value received at each comparison. For this purpose, Benge identified five factors – mental effort, skill, physical effort, responsibility and working conditions. The procedure for factor comparison method of job evaluation is as follows:
Merits The factor comparison method is more systematic and analytical as compared to any other method and offers following merits:
Demerits However, factor rating method has its own operational problems which restrict its adaptability. The major problems are as follows:
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What determines the relative worth of each job in an organization?Relative worth is determined mainly on the basis of Job Description and Job Specification only. Job Evaluation helps to determine wages and salary grades for all jobs. Employees need to be compensated depending on the grades of jobs they perform. Remuneration must be based on the relative worth of each job.
Which method do companies use to determine job worth?Four primary methods of job evaluations used to set compensation levels are point factor, factor comparison, job ranking and job classification.
What are the 5 types of job evaluation methods?Here are the 5 Best Job Evaluation Methods. Ranking Method. This job evaluation method works by ranking jobs according to their perceived value compared to other jobs. ... . Grading/Classification Method. ... . Point-Factor Method. ... . Factor Comparison Method. ... . Competitive Market Analysis Method.. Which is the most commonly used job evaluation system?The most widely used method of job evaluation is point rating method. Under it, jobs are divided into component factors. Points or weights are assigned to each factor depending on the degree of its importance in a particular job. The total points for a job indicate its relative worth or value.
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