JOB EVALUATION

What is Job Evaluation Mondy etal (1999:385) defines job evaluation as that part of a compensation system in which a company determining the relative value of a job in relation to another. Armstrong (2003:631) defines it as a systematic process for defining the relative work or size of jobs within an organization. Job evaluation can therefore be understood in the following terms;

It is part and parcel of an organizations reward management (not compensation) system.

It is about comparing all the jobs that exist in an organization. It is about grading all jobs in the organization according to their worth/relative worth to the organization with the highest worth one e.g. CEO being according graded the highest.

It focuses on jobs within an organization not outside. While it is not about determining salaries per se the outcome of job evaluation is used to differentiate base pays and rewards in general

It is a continuous process i.e. jobs in an organization

Purpose of Job Evaluation Internal equity- the major overall purpose of job evaluation is to achieve internal equity in an organizations reward management system. One of the critical pre-requisites of any reward management system is that it must be fair and equitable and the only way to build equitability into a reward system

is by scientifically determining the value of jobs in an organization through Job evaluation (how else can you determine the net worth) Other aims of Job Evaluation Armstrong (2003:32) 1. Establish the relative value or size of jobs 2. Produce information required to design ad maintain equitable and defensible grade and pay structure 3. Provide as objective as possible a basis for grading jobs within grade structure thus enabling consistent decisions to be made about job grading 4. Ensure that the organization meets its ethical and legal obligations to give equal pay for work of equal value

How jobs are Evaluated Job evaluation approaches can be divided into two broad categories 1. Analytical Approaches 2. Non Analytical Approaches

Non Analytical/Qualitative Approaches Job ranking method Here the job evaluator or evaluation committee simply collects all job descriptions and by way of comparison arrange the jobs in order according to their value in the organization. Thus up to date and comprehensive job descriptions are a must for this method to work. This method obviously will prove to be very cumbersome for large organizations e.g. NRZ 15000

employees, but may be most appropriate for a small medium sized organization. Job classification/Grade description Method Here a job hierarchy with the lowest to the highest job is broken down into a number of sub grades each with its own grade description e.g. a job hierarchy with grade 1-12 as lowest and highest will then be broken down into grades 1,2,3,4,5-12 and a brief description of each grade. After grade descriptions have been made each job is analyzed using the job descriptions and then slotted into the most appropriate grade descriptions. (adv and disadv) Analytical/Quantitative Methods Factor comparison Method Here a job is graded based not on its entirety but on the various factors within the job itself. There are generally 5 factors that are inherent in each job. 1. Mental requirements 2. Skills 3. Effort/physical requirements 4. Responsibility 5. Working conditions Each of these factors is the analyzed and compared for each job with a job with a stronger weight of a total of these factors having a higher grade. However the argument in some texts (Maundy and Bates) that each of these factors is given a monetary value based on market rates become worrying as

job evaluation should not be seen as a determinant of prices to be paid for a job- but just its relative worth

The Point Method This method is arguably the most scientific in the sense that each of the universal factors is inherent in a job is given a numerical weight with the total weight being the overall value of that job.

FACTOR 1. Mental requirements 2. Skills 3. Effort 4. Responsibility 5. Working conditions TOTAL WEIGHT A B

WEIGHT C D

A more detailed/more scientific way of evaluating jobs using this method may entail weighing each of these factors differently eg 20 for mental requirements, 10 for skills. The characteristics of Job Evaluation 1. Is a semi scientific process- while the analytic methods attempt to make job evaluation a scientific process it is not purely scientific but remains largely semi-scientific processes 2. Concerned with the job not the position- this means that when a job is being evaluated only the job must be looked at and not the person

who holds the job. However this is often the major trap in job evaluation, as evaluators tend to award a higher grade for a job basing on the high performance of the individual who occupies it and viceversa, which should not be the case. 3. Judgmental in nature- while job evaluation may be based on factual evidence it still has to rely on the interpretation and judgment of the evaluators e.g. in the most scientific method the point factor method, what weights should be given to a certain factor e.g. skills will depend on the judgment of the evaluators. However the focus should be on ensuring consistency in terms of judgment. Job Evaluation Committees While the HR department is responsible for initiating and managing a job evaluation system, the actual evaluation is not done by the HR manager but by committees known as job evaluation committees. This committee may be chaired by the HR head and should include as the other members the finance head, a labour rep (workers committee chairman) and the head of the department of the particular job being evaluated. It may also include any other person with specialist knowledge on the job/s being evaluated. The important issue to note is that each member of the committee must be well trained in the art of job evaluation. Advantages of Job Evaluation

Objectively done job evaluation has the following advantages (Armstrong 203: 68)

1. It can make the criteria against which jobs are valued explicit and provide a basis for structuring the judgment process (increases objectivity in the process judging value for jobs) 2. An equitable and defensible pay structure cannot be achieved unless a structured and systematic process is used to assess job valuing and relativities (ensures equitability in a reward system) 3. Provides a logical and reasoned frame within which consistent decisions can be made on job grades and rates of pay. 4. Provides the only basis for achieving equal pay for equal value and are the only acceptable defense in cases of equal pay disputes 5. Ensures some form of transparency in a reward system enabling it to be acceptable by all hence ensuring stability in an employment relationship Disadvantages of Job Evaluation 1. It ca n be bureaucratic and inflexible exercise which does agree well with the nee for organization to continuously change and be flexible 2. Job evaluation systems may become absolute over time 3. Powerful individuals in an organization can manipulate the system to award higher grades on personal grounds i.e. (for those the like)

However on analysis of these disadvantages of job evaluation will reveal that they focus not on the concept of job evaluations per se but on how it is sometimes carried out. Thus despite these shortcomings there is still no substitute for job evaluation with the only alternative being chance and

favoritism whose outcome in any case will be a disastrous reward management system. Commercial Job Evaluation systems/Packages Commercial job evaluation systems are the actual systems used in organizations. Usually they are branded and licensed by consultancy organizations that would hold rights to them. However they are all based on the theoretical concept of job evaluation especially the analytical approaches. The Patterson system (DBM) Decision band method The castellion system The peromnes system The hay guide chart profile system The questionnaire system The task system The simplest system

The Patterson system This is arguably the most widely used job evaluation system. It is a grade definition system where by all jobs in an organization are put into six grades based on one job factor decision making as follows Band Band Band Band Band Band F Policy making decisions (top mgt) E Programming decisions (senior mgt) D Interpretive decisions (middle mgt) C Routine decisions (skilled technicians) B Automatic decisions (semi- skilled) A Defined decisions (unskilled)

Each and every job in an organization would then be slotted into the appropriate band/grade depending on the level of its decision-making. The level of decision-making can also vary within each band and hence each band except band A is subdivided into 5 bands e.g. band C will range from band C1 C5. Its main advantage is that it is relatively easy, simple to implement and understand at all levels and hence ensuring fairness and perceived fairness in the reward management system. Its main disadvantage is that it uses only one factor as a basis of differentiating jobs i.e. decision making The Castellion System This system devised for SA Brewery is also named after SA Breweries beer brands. It combines both factor comparison and point rating. It identifies 6 job factors that are used to differentiate jobs.

Decision making Pressure of work Controls and checks Consequence of error Education Experience

Job descriptions are then analyzed and points awarded for each factor with the total determining the grades. The grades range from 1-16 with either 1 or 16 being the highest depending on the organizations choice. Its main advantage is that it uses more than one factor to compare jobs. The Peromnes system Peromnes is a Latin term which means for all. It essentially works like and was developed from the castellion system with the difference being that it uses 8 factors as follows:

Problem solving Consequence of error Pressure of work Job knowledge

Job impact Comprehension Evaluation Experience

It has 21 grades with 21 being the lowest an 1 being the highest The Hay Guide Chart Profile system The hay guide uses 3 factors

Know how Problem solving Decountability

It is essentially a point method based on 3 factors with points being awarded for each factor. It is usually used for managerial employees and unlike other systems it does not lead to particular job grades. When used to determine salaries the salary will be based on the actual points score and not the job. Because it looks at 3 conceptual factors it is not effective for lower level employees and is generally less applied The Question system The system combines both grade definition and the point method. It compares 3 factors

Decision making Controls and checks on the job Contact with people

The Task system This system combines points rating with factor comparison. Five grade definitions in the form of Level 1 Basic skills Level 2- Discretionary skills

Level 3 Specialized skills Level 4 Tactical skills Level 5 Strategic skills The following factors Complexity Knowledge Influence Pressure Are considered and given a weight at each skill level.

The Zimplest System/Bob Martin system This system compares the widest range of factors in the form of

Training and experience Job knowledge and skill Initiative and judgment Accuracy and quality of work Decisions and problems Physical effort Visual effort Contact with people within the organization Contact with people outside the organization

This system uses job specification rather than the whole job description Managing and maintaining a job evaluation system The following is a checklist of how to maintain a job evaluation system to ensure that it does not decay and become discredited.

Ensure that regular reviews of the system is by designing a system of job grade complaints whereby employees can forward their grievances about their grades. The addressing of these grievances will keep the system up to date and will ensure that job evaluation is a continuous process

Provide adequate and continuous training about how the system works for all members of the organization and in particular for the job evaluation panel/committee member Devolve the issue of ensuring grade equity to line as much as possible Reduce bureaucracy associated with the system as much as possible i.e. make it as less time consuming as possible Put in place sound record keeping and general administration mechanism

Job Evaluation policy Job evaluation is one area of HR, which needs a detailed policy as it relies very much on consistency in its application. Therefore a job evaluation policy, which should ideally be in the form of a separate manual, should answer the following questions

How the organizations job evaluation system works Members or composition of the job evaluation committee The procedure including the relevant forms for grading/reviews

Skills practice Read the details about the commercial job evaluation package