Job Evaluation Methods

Various Job Evaluation Methods

A variety of methodologies may be used to arrive at the hierarchical alignment of jobs required for purposes of arriving at equitable wages.

They are categorized into basic two types:

(1) analytical and

(2) non-analytical.

Analytical methods break jobs down into their constituent parts for assessment purposes; non-analytical methods evaluate jobs as whole. The non-analytical methods are also called as non-quantitative or summary methods; and the analytical methods are also known as quantitative methods.

Non Analytical Method  

1. Ranking Method:

Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are arranged from highest to lowest, in order of their value or merit to the organisation. Jobs can also be arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; the job at the list has the highest value and obviously the job at the bottom of the list will have the lowest value.

Jobs are usually ranked in each department and then the department rankings are combined to develop an organisational ranking. The following table is a hypothetical illustration of ranking of jobs.

Table-2: Array of jobs according to the Ranking Method

Rank Monthly Salaries
1. Accountant Rs. 30000
2.Accounts  Clerk Rs.18000
 3.Purchase assistant Rs. 17000
4.Machine-operator Rs. 14000
5. Typist Rs. 9000
6.Office boy Rs.6000

The variation in payment of salaries depends on the variation of the nature of the job performed by the employees. The ranking method is simple to understand and practice and it is best suited for a small organisation. Its simplicity however works to its disadvantage in big organisations because rankings are difficult to develop in a large, complex organisation. Moreover, this kind of ranking is highly subjective in nature and may offend many employees. Therefore, a more scientific and fruitful way of job evaluation is called for.

2. Merits of Ranking Method

  1. Simple to understand and practice
  2. Best suited for small organisations
  3. Demerits of Ranking Method
  4. Ranks are highly subjective in nature
  5. Rankings are difficult to develop in large, complex organisation.
  6. May offend employees.

3. Classification Method:

According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades. Separate classes may include office, clerical, managerial, personnel, etc. Following is a brief description of such a classification in an office.

Class I –Executives: Further classification under this category may be Office Manager, Deputy Office manager, office superintendent, Departmental supervisor, etc.

Class II – Skilled workers:  Under this category may come the Purchasing assistant, Cashier, Receipts clerk, etc.

Class III – Semiskilled workers: Under this category may come Stenotypists, Machine-operators, Switchboard operator etc.

Class IV – Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.

4. Merits of Classification Method

  1. The job classification method is less subjective when compared to the earlier ranking method.
  2. The system is very easy to understand and acceptable to almost all employees without hesitation.
  3. One strong point in favour of the method is that it takes into account all the factors that a job comprises.
  4. This system can be effectively used for a variety of jobs.
  5. Demerits of Classification Method:
  6. Even when the requirements of different jobs differ, they may be combined into a single category, depending on the status a job carries.
  7. It is difficult to write all-inclusive descriptions of a grade.
  8. The method oversimplifies sharp between different jobs and different grades.
  9. When individual job descriptions and grade descriptions do not match well, the evaluators have the tendency to classify the job using their subjective judgments.

(2)Analytical Method

1. Factor Comparison Method

A more systematic and scientific method of job evaluation is the factor comparison method. Though it is the most complex method of all, it is consistent and appreciable. Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors. These factors include   mental effort, physical effort, skill needed, responsibility, supervisory responsibility, working conditions and other such factors (for instance, know-how, problem solving abilities, accountability, etc.). Pay will be assigned in these methods by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs may be divided among the factors weighted by importance( the most important factor, for instance, mental effort, receives the highest weight). In other words, wages are assigned to the job in comparison to its ranking on each job factor.

The steps involved in factor comparison method may be briefly stated thus:

  • Select key jobs (say 15 to 20), representing wage/ salary levels across the organisation. The selected jobs must represent as many departments as possible.
  • Find the factors in terms of which the jobs are evaluated (such as skill, mental effort, responsibility, physical effort, working conditions, etc.).
  • Rank the selected jobs under each factor (by each and every member of the job evaluation committee) independently.
  • Assign money value to each factor and determine the wage rates for each key job.
  • The wage rate for a job is apportioned along the identified factors.
  • All other jobs are compared with the list of key jobs and wage rates are determined.

An example of how the factor comparison method works is given below:

Table-3: An example of how the Factor Comparison Method



Key job

Daily Wage Rate Physical Effort Factors mental effort Skills Responsibility Working conditions
Electrician 60 11(3) 14(1) 15(1) 12(1) 8(2)
Fitter 50 14(1) 10(2) 9(2) 8(2) 9(1)
Welder 40 12(2) 7(3) 8(3) 7(3) 6(3)
Cleaner 30 9(4) 6(4) 4(5) 6(4) 5(4)
Labourer 25 8(5) 4(5) 6(4) 3(5) 4(5)

After the wage rate for a job is distributed along the identified and ranked factors, all other jobs in the department are compared in terms of each factor: Suppose the job of a ‘painter’ is found to be similar to electrician in skill (15), fitter in mental effort (10), welder in physical effort (12) cleaner in responsibility (6) and labourer in working conditions (4). The wage rate for this job would be (15+10+12+6+4) is 47.

Table-4: Merits and demerits of actor Comparison Method

Merits Demerits
Analytical and objective

Relative and valid as each job is compared jobs with all other jobs in terms of key factors.

Money values are assigned in a fair way based on an agreed rank order fixed by the job evaluation committee.

Flexible, as there is no upper limitation on the rating of a factor.

Difficult to understand, explain and operate.

Its use of the same criteria to assess all jobs is questionable as jobs differ across and within organisations.

Time consuming and costly.

 2. Point Method:

This method is widely used currently. Here, jobs are expressed in terms of key factors. Points are assigned to each factor after prioritizing each factor in order of importance. The points are summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades. The procedure involved may be explained thus:

  1. Select key jobs. Identify the factors common to all the identified jobs such as skill, effort, responsibility, etc.
  1. Divide each major factor into a number of sub factors. Each sub factor is defined and expressed clearly in the order of importance, preferably along a scale.

The most frequent factors employed in point systems are Skill (key factor); Education and training required, Breadth/depth of experience required, Social skills required, Problem-solving skills, Degree of discretion/use of judgment, Creative thinking Responsibility/Accountability: Breadth of responsibility, Specialized responsibility, Complexity of the work, Degree of freedom to act, Number and nature of subordinate staff, Extent of accountability for equipment/plant, Extent of accountability for product/materials; Effort: Mental demands of a job, Physical demands of a job, Degree of potential stress.

The educational requirements (sub factor) under the skill (key factor) may be expressed thus in the order of importance.

Box – 1

Degree Define
1 Able to carry out simple calculations; High school educated
2 Does all the clerical operations; computer literate; graduate
3 Handles mail, develops contacts, takes initiative and does work independently; post graduate

Assign point values to degrees after fixing a relative value for each key factor.

Table-5: Point values to Factors along a Scale (Bank Officer)

Factor Point Values for Degrees Total
1 2 3 4 5
Skill 10 20 30 40 50 150
Physical effort 8 16 24 32 40 120
Mental effort 5 10 15 20 25 75
Responsibility 7 14 21 28 35 105
Working Conditions 6 12 18 24 30 90
Maximum total points of all factors depending on their importance to job   = 540


  1. Find the maximum number of points assigned to each job (after adding up the point values of all sub-factors of such a job).This would help in finding the relative worth of a job. For instance, the maximum points assigned to an officer’s job in a bank come to 540. The     manager’s job, after adding up key factors + sub factors points, may be getting a point value of    say 650 from the job evaluation committee. This job is now priced at a higher level.
  2. Once the worth of a job in terms of total points is expressed, the points are converted into money values keeping in view the hourly/daily wage rates. A wage servay is usually undertaken to collect wage rates of certain key jobs in the organization. Let’s explain this:

Table-6: Conversion of Job Grade Points into Money Value

Point range Daily wage rate (Rs.) Job grades of key bank officials
500-600 300-400 Officer
600-700 400-500 Accountant
700-800 500-600 Manager I Scale
800-900 600-700 Manager II Scale
900-1000 700-800       5. Manager III Scale

3. Merits of point method

  1. Superior and widely used method of evaluating jobs.
  2. Forces raters to look into all key factors and sub-factors of a job. Point values are assigned to all factors in a systematic way, eliminating bias at every stage. It is reliable because raters using similar criteria would get more or less similar answers.
  3. The methodology underlying the approach contributes to a minimum of rating error (Robbins p. 361). It accounts for differences in wage rates for various jobs on the strength of job factors. Jobs may change over time, but the rating scales established under the point method remain unaffected.

4. Demerits of point method

  1. The point method is complex.
  2. Preparing a manual for various jobs, fixing values for key and sub-factors, establishing wage rates for different grades, etc., is a time consuming process, According to Decenzo and Robbins, “the key criteria must be carefully and clearly identified, degrees of factors have to be agreed upon in terms that mean the same to all rates, the weight of each criterion has to be established and point values must be assigned to degrees”.
  3. This may be too taxing, especially while evaluating managerial jobs where the nature of work (varied, complex, novel) is such that it cannot be expressed in quantifiable numbers.

A comparative picture of various job evaluation methods is presented on Table-7

Table-7: Major Job Evaluation Methods

Method What facet of job is evaluated? How is job evaluated? Type of methods Major advantage(s) Major Disadvantage(s)
Ranking Whole job (compensable factors are implicit) Jobs are subjectively ordered according to relative worth. Non-quantitative Relatively quick and in expensive Entirely subjective
Classification Whole job Compare job to descriptions of job grades Non-quantitative Readily available and inexpensive Cumbersome system
Factor Comparison Compensable factors of job Compare job to key jobs on scales of compensable factors Quantitative Easy to use Hard to construct; inaccurate over time
Point method Compensable factors of job Compare job to standardized descriptions of degrees of universal compensable factors and sub factors Quantitative Accurate and stable overtime May be costly