Monday, February 6, 2012

Job Evaluation in a Business Organization


1. Definition of Job Evaluation
Job evaluation is the process used to measure the relative job worth of positions within an organization at a point in time. Job evaluation focuses on the actual requirements of the position, not on a person or their performance. Job evaluation measures the content/work value and not the volume of work. The work value of the position is dependent on a range of factors including the experience, skills and training required to perform the duties and responsibilities of the position.

2. Reasons for Evaluation Positions
            a) Positions are evaluated to establish internal relativities and to determine the appropriate classification level within the University’s applicable Industrial Instrument and this in turn establishes the salary range.


            b) When the requirements of the position have changed, or when there have been significant changes or growth in the role, or when new roles have been created, the position will be formally evaluated.

            c) Trained job evaluators in the Human Resources Unit evaluate positions based on one or more of the following circumstances: -
i) Creation of new positions
ii) Ongoing significant change(s) to the function or scope required of the position
iii) Change(s) to the position over time as a result of redesign or change(s) to other jobs that directly affect the functions and/or focus of the position
iv) Change(s) to a position as part of a restructure of the immediate organizational area
v) Change(s) to a position as a result of the restructure of another organizational area that directly affects the position’s function and/or focus

3. Staff Classification System
            a) The University utilizes the Higher Education Officer (HEO) classification grading structure Levels 1-10. The classification grading structure is underpinned by the Hay Chart Points Job Evaluation Methodology, which is utilized globally in both the private and public sectors and is recognized as being a valid and reliable method of evaluating positions.

            b) The information required to assess a position may come from position descriptions (PD), performance management documentation, interviews with Supervisors and Staff Members, specially designed questionnaires which are completed by both the Staff Member and Supervisor and the organisational structure chart.

            c) The following systems are used to evaluate positions:
i) Hay methodology & CAJE (Computer-Aided Job Evaluation questionnaire – Points system sourced from the Hay Group Human Resource Consultancy and is the basis on which the CAJE program evaluates positions.
ii) Hay job evaluation system – Points system designed by Hay Group
iii) Mercer CED job evaluation system – Points system designed by Cullen Egan Dell
iv) General Staff Position Descriptors (DWM Descriptors)
d) Each position from Level 1 to 10 is evaluated using a comprehensive process based on three areas common to all jobs:
i) Knowledge & Experience
ii) Problem Solving & Judgement
iii) Accountabilit
e) External remuneration benchmarking and advice is also obtained as required (e.g. HEO10 and above).

4. Criteria for Job Evaluation
There are four opportunities for evaluating non-casual positions:
a) New positions
All non-casual positions that are new to the area must be evaluated. However, if the position is the same as an existing position in the same organizational unit, there is no need for the new position to be evaluated. If the position (or a similar position) exists within the University, a consistent approach is required. Any relevant position descriptions will be reviewed to ensure consistency.
b) Vacant positions
Where the position has not been formally evaluated in the previous five years or where there are changes to the requirements of the position, the position must be evaluated.
c) Currently filled positions
Positions can only be considered for evaluation where there is someone in the position currently and there is a view that the work value has changed.
d) Position changes arising from a major restructure
While an organizational area is undergoing a substantial change process, applications for reclassification will be frozen for all affected positions in the area. However, part of the change process may require positions to be evaluated. Applications for reclassification received prior to the notification of a managing change process will still be considered.






Job Evaluation
In a preceding section we have seen that internal equity in pay isone of the requisites of a sound primary compensation structure. Management’s method to achieve equity in pay is jab evaluation. It is the cornerstone of formal wage and salary programme. The central purpose of job evaluation is to determine the relative worth of jobs of an enterprise. It thereby helps in establishing fair pay differentials among jobs. According to Knowles and Thompson2 evaluation is useful in eliminating the following discrepancies of a wage payment system:
· Paying high wages and salaries to persons who hold jobs and positions not requiring great skill, effort and responsibility;
· Paying beginners, less than they are entitled to receive in terms of what is required of them;
· ‘Giving a raise to persons whose performance does not justify the raise;
· Deciding rates of pay on the basis of seniority rather than ability;
· Paying widely varied wages for the same or closely related jobs and positions; and
· Paying unequal wages and salaries on the basis of race, sex, religion or political differences.
Advantages of Job Evaluation
According to an LL.D. publication3, job evaluation enjoys the following advantages:
(a) It is an objective and logical method of rankil1g jobs and of removing unjust differentials in the existing wage structure.
(b) It helps in fining new jobs at their appropriate places in the existing wage structure.
(c) It improves labor-management relations by reducing grievances concerning relative wages in the long run.
(d) It establishes an objective and clear basis for wage bargaining.
(e) It simplifies wage administration by making wage rates more uniform.
(f) It reveals the possibilities of more efficient use of the plant’s labor force by pointing out jobs which need less or more skilled workers than those who are manning these jobs at present.

Major Steps in Job Evaluation
Major procedural steps to be followed in a job evaluation programme are as under:

I. Planning Acceptance of the Job Evaluation Programme:

Since the personnel department is a staff department it cannot itself enforce a job evaluation program. It must win cooperation and acceptance for the programme from top line executives, employees, labor unions and first line supervisors.
This can be done in two ways: by soliciting participation and by communicating information. Participation leads to identification with the plan and greater acceptance of it by persons active in its formulation. Communication regarding the purposes of
job evaluation, the’” process by which it is carried out, and the results currently attained is also vitally important. To the extent this information is provided voluntarily to all concerned it creates a feeling of trust and stimulates interest.
A variety of methods may be adopted to organize and communicate information to different categories of persons. Conferences may be planned for top line executives to explain to them their obligations under the programme. For example, job evaluation necessarily presupposes selfdiscipline by management and its willingness to abide by job evaluation findings rather than to allow judgment or favoritism to influence salary decisions. Similarly, training programme may be instituted to acquaint supervisors with the plan to be used, role that they will be expected to play and the day-to-day problems which they may face in administering and explaining the programme to their subordinates.
 One of the most effective and widely used media Jar introducing job evaluation to workers is a letter addressed to the employees signed by the personnel officer. It brings out two important points in which employees are interested: namely, it stresses management’s support and it assures the employee that his wages will not be reduced as a result of a programme. Effective results have also been attained through the pub· location and distribution of booklets, which explain in some detail the general principles of job evaluation.
2. Selection of Jobs to Be Evaluated
Due to difficulties of time and money all jobs and positions within an enterprise are not evaluated at one time. Most companies in the beginning evaluate only shop jobs and office work. Executive, professional, and technical jobs are usually excluded. But later on when conditions permit these jobs are also brought into the plan. Sometimes a pilot plan is installed to evaluate a group of jobs within a single department or in a single plant of a multi-plant company. If the plan works well, it is extended to other units in the organization.
3. Preparing job descriptions and job specifications
Before any job can be evaluated it is necessary to know what the duties of the job are. A job description is required, therefore, indicating in considerable detail the duties and responsibilities of each job or position in the enterprise. From these job descriptions, individual job specifications are prepared. On the basis of the information contained in these job specifications individuals in the enterprise are evaluated.
Before employing any job specification for evaluation purposes, its accuracy and acceptance should be thoroughly checked. It should be made certain that there are no omissions and duplication of responsibilities in it and that it has been harmoniously accepted by the employee concerned. Once all job specifications covering jobs selected for evaluation have been thus checked and agreed upon we have the foundation for determining the relative worth of each job through one of several methods of job evaluation described below.
4. Appointment of A Committee to Perform Job Evaluation:
Job evaluation may be carried out either by the employees or by outside consultants or by employees and outside consultant) jointly. In the first case, a committee consisting of senior, experienced and respected representatives of management and workers is constituted. Employees’ participation in job evaluation work reduces their doubts and suspicions about the programme. But the committee lacks objectivity and speed because its members have to carry out job evaluation work in addition to their normal duties. These disadvantages areremoved when job evaluation is performed by outside experts who generally work on a full time basis. Employees. however, resent appointment of outside experts and view them with suspicion and doubt. These experts may also lack intimate knowledge about the problems’ of the enterprise. As such the best course is to ask both employee representatives and consultants to perform job evaluation jointly. The joint venture makes it possible to combine the intimate knowledge of the company possessed by the employees with the necessary expertise of the consultants.

5. Selection of A Job Evaluation Method
As a student will read in the following section there are in use today four basic methods of job evaluation. While the basic approaches of all these methods are somewhat similar, they differ in their detailed procedures. Some methods are designed specifically for evaluating clerical and administrative jobs; others work best when applied only to operative jobs. Sometimes it may be decided to evaluate the same jobs by two t different methods. The greater the amount of agreement between the two results, the greater would be their reliability.
6. Periodic Review
A periodic review, usually every one or two years, of all job descriptions must be done. Many job evaluation programme have failed because management failed to recognize this fact. A periodic review of all job descriptions is important for two reasons:
One, it softens the feelings of those who believe that their work was not properly described or evaluated last time and that they will get a fair deal at the time of review. Two, it enables management to keep itself abreast of changes taking place in the nature of a job. As the nature of a job changes factors which form the basis of job evaluation also change. Thus automation of job reduces ‘physical effort’ and increases ‘responsibility’.
The need for daily application of a skill is also reduced but the need for potential skill in emergencies increases. New factors ,aches ‘machinery utilization’ and ‘isolation from fellow workers’ become important.
Methods of Job Evaluation
Determining the relative worth of all jobs in the enterprise is difficult. Different jobs make varying demands on workers. One job, for example, might demand a prescribed level of education, require a certain physical ability, or
~exact specific responsibilities from an employee, whereas another job may be very lax in these aspects. Jobs, therefore, differ with repeat to the demands made on the employee as well as in value to the enterprise.
Job evaluation compares all demands made on each worker and, by means of this comparison, establishes the relative worth of each job in an enterprise. The comparison and evaluation may be made on a non-quantitative basis by simply ranking or classifying the jobs from lowest to highest, or on a quantitative basis where points value are assigned to the various demands of a job, and its relative worth determined by the sum of such point values.
Job evaluation programme should be implemented carefully.The following principles help in successful implementation of the programme:
1. Rate the job but not the employee. Rate the elements on the basis of the job demands.
2. The elements selected for rating should be easily understood.
3. The elements should be defined clearly and properly selected.
4. Employees concerned and the supervisors should be educated and convinced about the programme.
5. Supervisors should be encouraged to participate in rating the jobs.
6. Secure employee cooperation by encouraging them to participate in the rating programme.
7. Discuss with the supervisors and employees about rating but not about assigning money values to the points.
8. Do not establish too many occupational wages.
For, better understanding let us look at the flowchart given below:
Job evaluation process


The job-evaluation process starts defining objectives of evaluation and ends with establishing wage and salary differentials.
The main objective of job evaluation, as was stated earlier, is to establish satisfactory wage and salary differentials. Job analysis should precede the actual program of evaluation. Job analysis, as was discussed earlier, provides job-related data, which would be useful in drafting job description and job specification.
A job-evaluation program involves answering several questions:
The major ones are: I) which jobs are to be evaluated. II) Who should evaluate the jobs? Iii) What training do the evaluation need? IV) How much time is involved? V) What should be the criteria for evaluation? VI) What methods of evaluation are to be employed?
Which jobs are to be evaluated in any exercise, where there are more than 30 or 40 jobs to be evaluated, it is necessary to identify and select a sample of benchmark jobs, which can be used for comparisons inside and outside the organs. The benchmark jobs should be so selected to achieve representative sample of each of the main levels of jobs in each of the principal occupations.
The size of the sample depends on the number of different jobs to be covered. It is likely to be less than about five percent of the total number of employees in the organization and it would be difficult to produce a balanced sample unless at least
25 percent of the distinct jobs at each level of the organization were included.
Staffing the Evaluation Exercise
A committee, which consists of Head of several of department’s, as was pointed out earlier, does representatives of employee unions and specialist drawn from the National Productivity council Job evaluation. HR specialists will be normally the chairmen of the committee.
Responsibility for the overall coordination of the job-evaluation programme should be in the hands of a senior executive who can then report its progress to the board, and advise it on ensuring wage and salary development.
Training for the Committee
Members of the job-evaluation committee should be trained in its procedure so as to make the program successful.
Time Factor
Job evaluation should not be conducted in haste. Any rushing through will lead to appeals against the grading of jobs. Eight jobs in a day can be the ideal pace. After this, the quality of evaluation tends to drop, and more time has to spent later in checking and assessing the validity of the grading. The final review of all the time should be allowed for re-evaluation, if necessary.
Isolating Job-evaluation Criteria
The heart of job evaluation is the determination of the criteria for evaluation. Most job evaluations use responsibility, skill, effort and working conditions as major criteria. Other criteria used are difficulty, time-span of discretion, size of subordinate staff, and degree of creativity needed. It needs no emphasis that job evaluation criteria vary across jobs.
So friends you must have got a fare idea what is job evaluation; now we will discuss what are the methods involved in job evaluation.

Methods of Job Evaluation

Job-evaluation methods are of two categories- non-analytical and analytical.
Job Evaluation



 

Analytical                                                                     Non–Analytical









Point Ranking    Factor Comparison                                       Ranking              Job-grading
           Method                   Method                                                    Method                  Method

Analytical
1. Point-Ranking method
2. Factor comparison Method

Non-Analytical
1. Ranking Method
2. Job-grading method

Non-analytical Methods
Ranking and job classification methods come under this category because they make no use of detailed job factors. Each job is treated as a whole in determining its relative ranking.
Ranking Method
This is the simplest, the most inexpensive and the most expedient method of evaluation. The evaluation committee assesses the worth of each job on the basis of its title or on its contents, if the latter is available. But the job is not broken down into elements or factors. Each job is compared with others and its place is determined.
The method has several drawbacks. Job evaluation may be subjective as the jobs are not broken into factors. It is hard to measure whole jobs.
Ranking is the most straightforward method of work evaluation. Jobs, people, or even teams can be ranked from the ones adding most value to least value to the organization. Criteria for the ranking are not made explicit. Jobs rather than people are easier to rank when there are a large number of people in jobs. Teams can be ranked in a team-based environment as a substitute for or addition to the ranking of jobs and people.
When a larger number of jobs, people, or teams are to be ranked, the method of paired comparisons can be used. With this approach each entity is compared to every other entity in terms of value to the organization.
Overall value of the entity is determined by the number of times that the entity is evaluated as being of greater value then the entity being compared against. If an extremely large number of comparisons needs to be made, statistical formulas are available to reduce the number of comparisons required using sampling theory.
Advantages
1. Simple to use if there is a small number of jobs, people, or teams to evaluate
2. Requires little time
3. Minimal administration required
Disadvantages
1. Criteria for ranking not understood
2. Increases possibility of evaluator bias
3. Very difficult to use if there is a large number of jobs, people, or teams to evaluate
4. Rankings by different evaluators are not comparable
5. Distance between each rank is not necessarily equal
6. May invite perceptions of inequity

Banding
A banding procedure takes place when jobs are grouped together by common characteristics. Characteristics used to group jobs follow: exempt versus nonexempt, professional versus nonprofessional, union versus nonunion, key contributor versus non-key contributor, line versus staff, technical versus non-technical, value-added versus non-value-added, and classified versus non-classified. Often these groups are then rank ordered and each group is then placed in a pay band.
Advantages
1. Quick and easy procedure
2. Has initial face validity to employees
3. Allows for organizational flexibility
4. Minimal administration required
Disadvantages
1. Subtle, but important, differences between groups ignored
2. Subtle, but important, differences within groups ignored
3. May invite inequity perceptions
Classification
Classification systems define the value of jobs, people, or teams with written standards for a hierarchy of classification level. Each classification level may be defined by a number of factors that need to be present for a job, person, or team to be slotted into a particular classification level. These factors are usually blended together resulting in one standard for each classification level.
Advantages
1. Jobs, people, and teams can be quickly slotted into the structure
2. Classification levels have face validity for employees
3. Standards to establish value are made explicit
Disadvantages
1. Many jobs, people, or teams do not fit neatly into a classification level
2. Extensive judgment is required because standards used to define each factor are blended together
3. Differences between classification levels may not be equal
4. Creates status hierarchies within organizations
5. Extensive administration required
Job-grading Method
As in the ranking method, the job-grading method (or job classification method) does not call for a detailed or quantitative analysis of job factors. It is based on the job as a whole. The difference between the two is that in the ranking method, there is no yardstick for evaluation, while in the classification method, there is such an yardstick in the form of job classes or grades. Under the classification method, the number of grades is first decided upon, and the factors corresponding to these grades are then determined.

The advantages of the method are; I) job grade descriptions are vague and are not quantified; ii) difficulty in convincing employees about the inclusion of a job in a particular grade because of vagueness of grade descriptions; and iii) more job classification schedules need to be prepared because the same schedule cannot be used for all types of jobs.

Analytical Methods

Point-ranking Method
The system starts with the selection of job factors, construction of degrees for each factors, and assignment of points to each degree. Different factors are selected for different jobs, with accompanying differences in degrees and points.
Factor-Comparison Method
The factor-comparison method is yet another approach for job evaluation in the analytical group. Under this method, one begins with the selection of factors, usually five of them- are assumed to be constant for all the jobs. Each factor is ranked individually with other jobs. For example, all the jobs may be compared first by the factor ‘mental requirements.’ The skills factor, physical requirements, responsibility, and working conditions are ranked. The total points are then assigned to each factor. The worth of a job is then obtained by adding together all the point values.
Let us now discuss the few important measures to improve Job Evaluation.

How to Improve Job Evaluation

Following measures and steps for improving the work of evaluation programmes;
· A job evaluation scheme should be chosen cautiously. It should be devised and administered on the basis of employment market, demand for labour, bargaining power of the parties & job conditions.
· The details of the scheme should be drawn up in such a way that they do not conflict with other provision of a collective agreement.
· The scheme should be sold to all concerned and suggestions sought.
· Give major importance that the number of job titles and classification be kept to a minimum.
· Any anticipated changes in methods should be carried out before a scheme is installed and all modifications in it should be resisted until it becomes fully established.
· In preparing job descriptions it is a sound practice to emphasis in them the things which makes one job different from another rather than to find a comprehensive statement of all the duties of the job.
· The better the state of industrial relations the easier it is to introduce a job evaluation scheme.
Essentials for the Success of A Job Evaluation Programme

Following are the essential for the success of Job Evaluation:
1. Compensable factors should represent all of the major aspects of job content. Compensable factors selected should be (a) Avoid excessive overlapping or duplication,
(b) Be definable and measurable, (c) Be easily understood by employees and administrators, (d) Not cause excessive installation or admin cost and (e) Be selected with legal considerations in mind.

2. Operating managers should be convinced about the techniques and programme of evaluation. They should also be trained in fixing and revising the wages based on job evaluation.

3. All the employees should be provided with complete information about job evaluation techniques and programme.
4. All .groups and grades of employees should be covered by the job evaluation
The results of job evaluation must be fair and rational and unbiased to The individuals being affects
Summary
A job evaluation scheme should be chosen cautiously. It should be devised and administered on the basis of employment market, demand for labour, bargaining power of the parties & job conditions.

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