Job Evaluation Methods - AG2 | Evaluation | Employment

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Job Evaluation Methods - AG2
  3/23/20171 Human Capital Management School of Business and Management ITB  DEFINITION Job evaluation is the systematic process of assessing and determining the value of jobs performed within the organization and the relative value or worth of the employee's efforts.  PURPOSE The technique of job evaluation is used to determine the appropriate compensation to offer.  FUNCTION The systematic process of job evaluation includes an in-depth analysis of all positions based on a specific, common set of factors that can include skill, education, experience, responsibility, decision-making, problem-solving, mental demand, physical demand and complexity.  BENEFITS Using a systematic process for determining the pay grade for different jobs helps to take the subjectivity out of compensation decisions and increases employee compliance.  CONSIDERATIONS Job evaluation reclassifications are often required when the requirements of a position, usually regarding either tasks or responsibilities or changes due to downsizing or expansion.  MISCONCEPTION Job evaluations are not assessments of employee performance, rather an analysis of what a competent employee in the job position should be paid.    NON-ANALYTICAL Method  Ranking  Classification  ANALYTICAL METHOD  Factor Comparison  Point Method Comparison MethodAnalysis Method Entire Job JobFactors Job Against Scale Job Against Job ClassificationPoint MethodsRankingFactor Comparison  3/23/20172  WHAT  Ranking method is the simplest and easiest job evaluation method;  Jobs and the employees who perform those jobs are ranked from highest to lowest depending on their quality and value to the organization  HOW  All jobs are ranked with the same factor and compensation is based on the ranking order.  STEPS  Rank jobs by or in clusters  Department rankings are combined to develop an organizational ranking  Use compensable factors RankMonthlySalaries Accountant3.000.000 IDRAccountantClerk1.800.000IDRPurchase Assistant1.700.000 IDRMachine Operator1.500.000 IDR  ADVANTAGES  Simple  Very effective when there are relatively few jobs to be evaluated (less than 30)  DISADVANTAGES  Difficult to administer as the number of jobs increases.  Rank judgments are subjective.  Since there is no standard used for comparison, new jobs would have to be compared with the existing jobs to determine its appropriate rank. In essence, the ranking process would have to be repeated each time a new job is added to the organization.  WHAT  The job classification method uses job classes or job groups to provide more customization in the evaluation.  HOW  The groups are classes or grades and are categorized by factors like independent judgment used, skills required and physical effort needed.  Separate classes may include office, clerical, managerial, personnel, etc Class GradesPosition IExecutiveOffice ManagerDeputy Office ManagerDepartment SupervisorIISkilled WorkerPurchasing ClerkAccountant ClerkIIISemiskilled WorkerMachine Operator  3/23/20173  Advantages  Simple  The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method.  Disadvantages  Classification judgments are subjective  The standard used for comparison (the grade/category structure) may have built in biases that would affect certain groups of employees (females or minorities)  Some jobs may appear to fit within more than one grade/category  WHAT  Comparison Method is more scientific and complex than any other method.  It ranks each job for several compensation factors like skill needed, mental effort, physical effort, responsibility, working condition, knowledge and difficulty, which are combined into a total rating.  HOW  Each job is ranked according to a specific set of factors, such as physical effort, mental effort, or responsibility, all of which have predetermined weights indicating their importance to success.  STEPS  Select key jobs, representing wage/salary levels across the organization. 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 keyjob.  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 FactorSub FactorScore SKILL Experience1 –10Education1 –10Ability1 –10 RESPONSIBILITIES Fiscal1 –10Supervisory1 –10 EFFORT Mental1 –10Physical1 –10 WORKING CONDITIONS Location1 –10Hazards1 –10 Job TitlePoint Administrator (Payroll)7HR Officer15HRSupervisor24HR Manager32  ADVANTAGES  The value of the job is expressed in monetary terms  Can be applied to a wide range of jobs  Can be applied to newly created jobs  DISADVANTAGES  The pay for each factor is based on judgments that are subjective  The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities)  3/23/20174  WHAT  The point method is a more quantitative technique.  The objective of the point method is to award points for various aspects of the job.  HOW  Select key jobs.  Identify the factors common to all the identified jobs such as skill, effort, responsibility, and working condition.  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, experience required, social skills required, problem-solving skills, degree of discretion/use of judgment, creative thinking  Responsibility/Accountability 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.  Working Conditions Location, hazards, extremes in environment Point Values to Factor along a Scale Factor12345Total Skill1020304050150Physical Effort816243240120Mental Effort51015202575Responsibility714212835105Working Conditions61218243090 Maximum total points of all factors depending on their importanceto job 540 DegreeSub Factor 1Able to carry out simple calculations2Does all the clericaloperations3Handle mail, develop contacts, make initiative & does work independently4Etc…  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.  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 survey, usually, is undertaken to collect wage rates of certain key jobs in the organization. Conversionof Job Grade Point into Money Value Point RangeDaily Wage Rate (IDRin thousand)Job Grades 500-600100-200Officer600-700200-300Accountant700-800300-400Manager 1 Scale800-900400-500Manager2 Scale900-1000500-600Manager 3 Scale
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