Subject: Human Resource Management

Topic: Job Evaluation

Submitted by:
Saurav Prasad
B.B.A.,LL.B
4th Semester
Roll No: 102/BBA/LLB/14007

Supervised by:
Mr. Amit Kumar Dutta.
(Assistant Professor in
Management)

INDIAN INSTITUTE OF LEGAL STUDIES, DAGAPUR

2014-2015

pg. 1
 ACKNOWLEDGEMENT

A research work of such great scope and precision could never have been possible without
great co-operation from all sides. Contributions of various people have resulted in this
effort. Firstly, I would like to thank God for the knowledge he has bestowed upon me.

I would also like to take this opportunity to thank Mr. Amit Kumar Dutta (Assistant
Professor in Management) without whose valuable support and guidance, this project
would have been impossible. I would like to thank the library staff for having put up with
my persistent queries and having helped me out with the voluminous materials needed for
this work. I would also like to thank my seniors for having guided me and culminate this
acknowledgement by thanking my friends for having kept the flame of competition
burning, which spurred me on through these days.

And finally my parents, who have been a support to me throughout my life and have
helped me, guided me to perform my best in all interests of my life, my grandparents who
have always inculcated the best of their qualities in me.

Saurav Prasad
BBA.,LL.B
4th Semester

pg. 2
 TABLE OF CONTENTS
Particulars Pg. No.

1. Introduction 04-06
2. Research Methodology 07
3. Objectives of Job Evaluation 09
4. Process of Job Evaluation 10-11
5. Advantage of uses of Job Evaluation 12-13
6. Limitation of Job Evaluation 14
7. Methods of Job Evaluation 15-19
8. Conclusion 20
9. Bibliography 21

pg. 3
 INTRODUCTION

Job evaluation developed out of civil service classification practices and some early
employer job and pay classification systems. Whether formal job evaluation began with
the United States Civil Service Commission in 1871 or with Frederick W. Taylor in 1881,
it is now over 120 years old and still of great value. The first point system was developed
in the 1920s. Employer associations have contributed greatly to the adoption of certain
plans. The spread of unionism has influenced the installation of job evaluation in that
employers gave more attention to rationalized wage structures as unionism advanced.
During World War II, the National War Labour Board encouraged the expansion of job
evaluation as a method of reducing wage inequities.

As organizations became larger and larger and more bureaucratized the need for a rational
system of paying employees became evident. Wage structures became more complex and
needed some way to bring order to the chaos perpetuated by supervisors setting pay rates
for their employees on their own. Job evaluation became a major part of the answer. The
techniques and processes of job evaluation were developed and perfected during this time
period of the late 1950s

Job evaluation is an orderly and systematic technique of determining the relative worth of
the various jobs within the organisation so as to develop an equitable wage and salary
structure. According to the International Labour Office, “Job evaluation is an attempt to
determine and compare the demands which the normal performance of a particular job
makes on normal workers, without taking into account the individual abilities or
performance of the workers concerned”. The British Institute of Management has defined
Job Evaluation as “the process of analysis and assessment of jobs to ascertain reliably their
relative worth using the assessment as the basis for a balanced wage structure.”

pg. 4
Job Evaluation is the process of collecting information relating to a job in terms of duties,
working conditions, supervisions, etc. it provides the information relating for evaluating a
job. Therefore, job evaluation is something more than job analysis. Job evaluation begins
with job analysis and ends up with the classification of jobs according to their worth. A
job cannot be evaluated unless and until it is analysed.

Job evaluation involves assessment of the worth of a job. The purpose of job evaluation is
to determine basic wage rates for different jobs whereas the aim of performance appraisal
is to determine incentives, and rewards for superior performance.

 In the words of Edwin B. Flippo. "Job evaluation is a systematic and orderly process

of determining the worth of a job in relation to other jobs."

 According to Kimball and Kimball Jr., "Job evaluation represents an effort to

determine the relative value of every job in a plant and to determine what the fair
basic wage for such a job should be."

 According to Bethel, Atwater and Smith et at, "Job evaluation as a personal term

has both a specific and genetic meaning specifically, it means job rating or the
grading of occupations in terms of duties ; generally it means the entire field of
wages and salary administration along modern lines"

 According to International Labour Organisation, "Job evaluation may be defined as

an attempt to determine and compare the demands which the normal performance of
particular job makes on normal workers without taking account of the individual
abilities or performance of the workers concerned."

 In the words of Dale Yoder, "Job evaluation is a practice which seeks to provide a

degree of objectivity in measuring the comparative value of jobs within an
organisation and among similar organisations."

 According to Bureau of Labour Statistics, "Job evaluation is the evaluation or rating

of job to determine their position in job hierarchy. The evaluation may be

pg. 5
 achievement through assignment of points or the use of some other systematic
rating method for essential job requirements such as skill, experience and
responsibility."

pg. 6
 RESEARCH METHODOLOGY

Research in common parlance refers to a search for knowledge In fact, research is an

art of scientific investigation. The Advanced Learner’s Dictionary of Current English
lays down the meaning of research as “a careful investigation or inquiry especially
through search for new facts in any branch of knowledge. Redman and Mory define
research as a “systematized effort to gain new knowledge.” Some people consider
research as a movement, a movement from the known to the unknown. It is actually a
voyage of discovery. We all possess the vital instinct of inquisitiveness for, when the
unknown confronts us, we wonder and our inquisitiveness makes us probe and attain
full and fuller understanding of the unknown. This inquisitiveness is the mother of all
knowledge and the method, which man employs for obtaining the knowledge of
whatever the unknown, can be termed as Research. Methodology is the systematic,
theoretical analysis of the methods applied to a field of study. It comprises the
theoretical analysis of the body of methods and principles associated with a branch of
knowledge. Typically, it encompasses concepts such as paradigm, theoretical model,
phases and quantitative or qualitative techniques. A methodology does not set out to
provide solutions - it is, therefore, not the same thing as a method. Instead, it offers the
theoretical underpinning for understanding which method, set of methods or so called
“best practices” can be applied to specific case. Research methodology can be done
through Primary data as well as secondary data. Primary research consists of a
collection of original primary data collected by the researcher. It is often undertaken
after the researcher has gained some insight into the issue by reviewing secondary
research or by analyzing previously collected primary data. It can be accomplished
through various methods, including questionnaires and telephone interviews in market
research, or experiments and direct observations in the physical sciences, amongst
others. The term primary research is widely used in academic research, market
research and competitive intelligence. There are several types of secondary data. They

pg. 7
 can include information from the Census, a company’s health and safety records such
as their injury rates, or other government statistical information.

pg. 8
 Objectives of Job Evaluation

It is essential for every organisation to be friendly with the process of Job Evaluation
because its main purpose is to identify the basis for fixing wages, salary for various jobs.
Thus, Job evaluation has a few more objectives so that the classification of jobs can be
done to their worth.

The objectives of Job evaluation are as follows:

1. To establish an orderly, rational, systematic structure of jobs based on their worth to

the organization.
2. To justify an existing pay rate structure or to develop one that provides for internal
equity.
3. To assist in setting pay rates that are comparable to those of in similar jobs in other
organizations to compete in market place for best talent.
4. To provide a rational basis for negotiating pay rates when bargaining collectively
with a recognized union.
5. To ensure the fair and equitable compensation of employees in relation to their
duties.
6. To ensure equity in pay for jobs of similar skill, effort, responsibility and working
conditions by using a system that consistently and accurately assesses differences in
relative value among jobs and
7. To establish a framework of procedures to determine the grade levels and the
consequent salary range for new jobs or jobs which have evolved and changed.
8. To identify a ladder of progression for future movement to all employees interested
in improving their compensation.
9. To comply with equal pay legislation and regulations determining pay differences
according to job content.
10.To develop a base for merit or pay-for-performance.

pg. 9
 Process of Job Evaluation

There are in general eight steps that are involved in the process of job evaluation which
has been explained as under:

1. Gaining Acceptance- First of all the cooperation and support of top

management, employees and the trade union should be obtained through
communication and participation. For the purpose conferences, letters and
booklets can be used explaining the aims and benefits of job evaluation.
2. Constituting Job Evaluation Committee- It is very difficult for a single
person to evaluate all jobs objectively. Therefore, a committee consisting of
experienced and respected representatives of a management and workers and
outside experts should be constituted. Participation of employees in a Job
evaluation will reduce their doubts and suspicion about the programme.
3. Selecting Jobs to be Evaluated- Due to constraints of time and money it
may not be possible to evaluate each and every job. Therefore, some key jobs
may be selected in each department. The key jobs are evaluated in detail and
the other jobs are compared with the key jobs. The key jobs should be
representative of the type of work performed.
4. Describing the Jobs- A detailed written description of every job is
prepared to indicate the duties and responsibilities involved in it. The job
description is thoroughly checked to ensure that there are no omission and
duplication in it. The acceptance of the employee performing the job is also
obtained to the job description.
5. Selecting the Method of Evaluation- There are several methods available
for evaluating jobs. The method most appropriate to the job and the
pg. 10
 organisation is chosen. If possible more than one method may be used to
increase the accuracy of evaluation.
6. Weighting Job Factors- A job is compared with other jobs in terms of
significant factors which may be as follows-
(a) Skill-mental and manual
(b) Experience
(c) Efforts and initiative
(d) Working conditions
(e) Responsibilities to be undertaken
(f) Supervision required

Weights are assigned to each job factor and total weights for a job indicate its relative
value. Different jobs are arranged in a sequence in terms of their relative worth to the
company.

7. Assigning Money Values- each job is priced in terms of its worth. In other
words, the sequences of jobs in terms of their relative worth is related to a
money scale
8. Periodic Review- A periodic view and revision of job descriptions will help
to assuage the feelings of employees who believe that their work was not
properly evaluated. Moreover, it will enable management to update job
description in the light of technological and other changes.. for example
automation of a job reduces physical effort, but increases responsibility.

pg. 11
 Advantages of Uses of Job Evaluation

Job evaluation is a process of determining the relative worth of a job. It is a process which
is helpful even for framing compensation plans by the personnel manager. Job evaluation
as a process is advantageous to a company in many ways:

1. Reduction in inequalities in salary structure - It is found that people and their

motivation is dependent upon how well they are being paid. Therefore the main
objective of job evaluation is to have external and internal consistency in salary
structure so that inequalities in salaries are reduced.
2. Specialization - Because of division of labour and thereby specialization, a large
number of enterprises have got hundred jobs and many employees to perform them.
Therefore, an attempt should be made to define a job and thereby fix salaries for it.
This is possible only through job evaluation.
3. Helps in selection of employees - The job evaluation information can be helpful at
the time of selection of candidates. The factors that are determined for job
evaluation can be taken into account while selecting the employees.
4. Harmonious relationship between employees and manager  - Through job
evaluation, harmonious and congenial relations can be maintained between
employees and management, so that all kinds of salaries controversies can be
minimized.
5. Standardization - The process of determining the salary differentials for different
jobs become standardized through job evaluation. This helps in bringing uniformity
into salary structure.
6. Relevance of new jobs - Through job evaluation, one can understand the relative
value of new jobs in a concern

pg. 12
 7. Skilled workers - It reveals jobs which acquire less or more skilled workers than
those already performing these jobs. In this way job evaluation facilitates better
utilisation of the work force.
8. Wage fixation- Due to increasing mechanisation and automation, performance
depends in many cases more on the machine than on the worker. In such cases, it is
unrealistic to pay workers on the basis of their output. Job evaluation is a realistic
basis of wage fixation in these cases.
9. Placement of employees- Job evaluation invariably involves detailed analysis of a
job. Data generated in job evaluation I very useful in selection, placement and
training of employees.

pg. 13
 Limitations:

1. Though there are many ways of applying job evaluation in a flexible manner, rapid
changes in technology and in the supply of and demand for particular skills, create
problems of adjustment that may need further study.
2. When job evaluation results in substantial changes in the existing wage structure,
the possibility of implementing these changes in a relatively short period may be
restricted by the financial limits within which the firm has to operate.
3. When there are a large proportion of incentive workers, it may be difficult to
maintain a reasonable and acceptable structure of relative earnings.
4. The process of job rating is, to some extent, inexact because some of the factors and
degrees can be measured with accuracy.
5. Job evaluation takes a long time to complete, requires specialized technical
personnel and is quite expensive.

pg. 14
 Methods of Job Evaluation

Various methods of Job Evaluation may be grouped as under.

1. Non-quantitative methods
(a) Ranking or job comparison
(b) Grading or job classification
2. Quantitative methods
(a) Point Rating
(b) Factor comparison.

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
organization. Jobs also can 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; and the job at the top of 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 organizational ranking. The following table is a hypothetical
illustration of ranking of jobs.
Table: Array of Jobs according to the Ranking Method
Rank                                Monthly salaries
1. Accountant                             Rs 3,000
2. Accounts clerk               Rs 1,800
pg. 15
 3. Purchase assistant                   Rs 1,700
4. Machine-operator           Rs 1,400
5. Typist                           Rs 900
6. Office boy                     Rs 600
 
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 organization. Its simplicity, however, works to its
disadvantage in big organizations because rankings are difficult to develop in a large,
complex organization. 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.

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.
 
(a)             Class I - Executives: Further classification under this category may be
Office manager, Deputy office manager, Office superintendent, Departmental
supervisor, etc.

pg. 16
 (b)             Class II - Skilled workers: Under this category may come the Purchasing
assistant, Cashier, Receipts clerk, etc.
(c)             Class III - Semiskilled workers: Under this category may come Stenotypists,
Machine-operators, Switchboard operators, etc.
(d)             Class IV - Semiskilled workers: This category comprises Daftaris, File
clerks, Office boys, etc.
 
The job classification method is less subjective when compared to the earlier ranking
method. The system is very easy to understand and acceptable to almost all employees
without hesitation. One strong point in favor of the method is that it takes into account all
the factors that a job comprises. This system can be effectively used for a variety of jobs.
 
The weaknesses of the job classification method are:
Even when the requirements of different jobs differ, they may be combined into a single
category, depending on the status a job carries.
It is difficult to write all-inclusive descriptions of a grade.
The method oversimplifies sharp differences between different jobs and different grades.
When individual job descriptions and grade descriptions do not match well, the evaluators
have the tendency to classify the job using their subjective judgments.

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 the 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:

pg. 17
(a)      Select key jobs. Identify the factors common to all the identified jobs such as skill,
effort, responsibility, etc.
(b)      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:
                         I.      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;
                       II.      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;
                    III.      Effort: Mental demands of a job, Physical demands of a job, Degree of
potential stress.
 

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,
supervisory responsibility, working conditions and other relevant factors (for instance,
know-how, problem solving abilities, accountability, etc.). Pay will be assigned in this
method by comparing the weights of the factors required for each job, i.e., the present

pg. 18
wages paid for key jobs may be divided among the factors weighed 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
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 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.

pg. 19
 Conclusion
By this we can conclude that job evaluation is a systematic technique of ascertaining the
relative worth of different jobs in an organisation. It helps us to serve several objectives.
Graining acceptance, constituting the job evaluation committee, selecting jobs to be
evaluated, describing the jobs, selecting the method of evaluation, weighting the job
factors, assigning money values and periodic reviews ae the elements of job evaluation
process. Job evaluation helps to design a rational wage and salary structure and does not
provide the complete answer to wage and salary problem. Several conditions are required
to make job evaluation successful. Ranking method, Grading Method, Factor comparison
method, and point method are the techniques of job evaluation.

pg. 20
 BIBLIOGRAPHY

Websites:
 http://www.slideshare.net/mHashaam67/job-evaluation-in-human-resource-
management-12804553
 http://hrcouncil.ca/hr-toolkit/compensation-job-evaluation.cfm
 http://www.whatishumanresource.com/job-evaluation
 https://admin.utep.edu/DesktopDefault.aspx?tabid=6727
 http://www.businessdictionary.com/definition/job-evaluation.html
 https://www.uoguelph.ca/hr/managers/job-design-job-evaluation

pg. 21