Everything you need to know about the methods and techniques of job evaluation. According to I.L.O. job evaluation as “an attempt to determine and compare demands which the normal performance of a particular job makes on normal workers without taking account of the individual abilities or performance of the workers concerned.”

As per opinion of the Bureaus of Labour Statistics, U.S.A., “job evaluation is the evaluation or rating of jobs to determine their position in the job hierarchy.

The evaluation may be achieved through the assignment of points or the use of some other systematic method for essential job requirements, such as skills, experience and responsibility.”

The methods of job evaluation can be studied under the following heads:- 1. Non Quantitative 2. Quantitative Methods.


Some of the methods of job evaluation are:- 1. Ranking 2. Paired Compensation and 3. Job Classification Methods 4. Factor Comparison 5. Point Methods.

Job Evaluation Methods: Non-Quantitative and Quantitative Methods and Techniques

Methods of Job Evaluation – Top 5 Methods: Ranking, Paired Compensation, Grading, Point System and Factor Comparison

Job analysis describes the duties of a job, authority relationships, skills required, conditions of work, and additional relevant information. Job evaluation, on the other hand, uses the information in job analysis to evaluate each job — valuing its components and ascertaining relative job worth.

It is the process of determining systematically the relative worth or value of various jobs in an organisation. Job analysis is the process of collecting information about job while job evaluation begins with job analysis and ends where the worth of a job is ascertained for achieving pay equity between jobs. It consist of various methods.

They are:

Method # 1. Ranking:


Under this method, jobs are ranked in order of its importance from the simplest to the hardest, or from most difficult to least difficult, or from more skilled to low skilled and so on. A committee of experts is formed to evaluate job description and rank the jobs in order of their importance. Committee takes into account the factors like nature of job, working condition, supervision needed, responsibilities involved, etc., in the matter of ranking the jobs.

Steps in Job Evaluation:

i. Job description – Job analysis is conducted and job description is prepared for each and every job. Though it is not essential, preparation of job description is helpful in having a clarity about each and every job.

ii. Selection of raters – Jobs are ranked department wise or in cluster (factory job, clerical job, menial job and so on). These jobs should not be compared with one another. Factory jobs should not be compared with administrative jobs. On account of variation in the nature of work involved in each job a committee of raters are appointed for the purpose of rating.


iii. Selection of key jobs – Key jobs are first selected and then compared with other jobs. These key jobs are selected from major departments or main functions.

iv. Ranking the jobs – Each job is compared with other similar jobs to establish its exact ranking in the scale. Each job is assigned a rank depending upon its relative significance to several raters.

Raters may independently rank them and final ranking is arrived at by averaging the score. Having ranked all the jobs, they are classified into 8 to 12 categories. The job in a single class are given the same wage rate.



This method is suited to small concerns where there are few jobs which can be easily compared with one another.


i. The method is simple enough to be understood by anyone in the organization.

ii. It is least expensive method.


iii. It can be put in place without any delay as it does not consume much time.


i. Human bias may distort ranking.

ii. There may not be uniformity in ranking.


iii. Employees resent arbitrary ranking.

iv. As job are ranked in some order, exact differences among different jobs cannot be determined.

v. Ranking may not be accurate.

vi. Factors like skill, effort, responsibility, etc., are not analyzed separately. Hence, wage rates paid for different jobs influence the rates.

Method # 2. Paired Compensation:

i. Each job is paired with every other job in the series.

ii. The more difficult job in each pair is identified.

iii. Rank is then assigned in terms of number of times a job is rated difficult.

Ranking along a Number Line:

Ranks obtained through job description and paired comparisons are spread along a line.

Each job is placed along the line on the basis of its closeness to the highest ranked job. In the example given below, ‘Z’ is highest ranked job while ‘V’ is the lowest ranked job. Other jobs are spaced according to its closeness to the highest ranked job.

Method # 3. Grading:

Job evaluation committee grades or classifies the job on the basis of pre-determined grades in the first place, jobs are then simply graded in terms of information collected from job analysis. There is a range of wages for each grade of job. The jobs may be graded as skilled, unskilled, clerical, administrative and the like.


Preparation of Job Description:

The job evaluation committee has to prepare a job description to evolve job classification.

A. In the first place, number of grades are selected – Then grading should be awarded in terms of grades like nature of duties, supervisory responsibilities, application of mind, expertised knowledge, the extent of physical skill required to do the job, physical stress involved and so on. Each job is fit into description.

B. Selection of grade – Job evaluation committee should select the grades in the first place which may range from 10 to 20. Then key jobs should be selected next.

C. Assignment of grades – Jobs selected are assigned grades appropriate to the level. Inter-relationship between the job is determined.

D. Grading all the jobs – Jobs are allocated to various grades. For instance, menial job is put in grade 4, clerical job is assigned to grade 3, technical job is taken to grade 2 and decision/making policy formulation job is assigned grade 1.


i. This method is simple enough to be understood by all. It is simple to adopt.

ii. A systematic criterion is followed in grading the job. Job holders do not have any confusion in understanding the standards used for grading the jobs.

iii. Grouping of jobs into grades make it easy for wage administration.

iv. It is economical to operate. It is suited even to small concerns. It is followed in public sector.

v. Pay grades can be compared with those of other organisations.


i. As no set standard is available, there is a lot of scope for human bias.

ii. It is difficult to write accurate job description of job grades.

iii. Some jobs may involve tasks which may overlap with more than one grade.

iv. Since personal judgement is involved in deciding job classes and assigning jobs to specific classes, there may exist the possibility of job being wrongly classified.

v. With increase in number of jobs, the system becomes difficult to operate.

vi. This system may not be suitable for large organizations because of job rigidity.

Method # 4. Point System:

This method involves both quantitative and qualitative approach to measurement of worth of a job. A number of factors are to be considered in each and every job determined. Weightage is assigned in terms of points arrived for each factor. The sum of these points serves as index for findings out the relative significance of the related jobs. This total is compared with that of other jobs and thus relative worth of various job is determined. The points of different jobs are converted into money value or wage rate.


i. Type of Jobs to be Evaluated:

There are several jobs involving different skills, efforts, working conditions, etc. Therefore, a few representative jobs need to be selected in the first phase.

ii. Selection of Factors:

The number of factors to be selected for evaluation differs from company to company. The factors selected should cover all aspects of a job. The common factors selected include education, skill, training, physical ability, mental requirement, responsibility, job conditions, etc.

iii. Definition of Factors:

The selected factors are defined in order to ensure uniformity or consistency in interpretation of various raters.

iv. Determining Relative Values of Job Factors:

The relative values of various factors depend upon their significance to the job. The total points for each factor should be allocated among its sub factors.

v. Assigning Point Value to Factors along Scale:

Point value for different degrees of a factor may be decided on the basis of arithmetic progression.

 vi. Adding up Point Value:

Find the maximum number of points assigned to each and every 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 plus points of sub-factor is given a point value of say 650 by the job evaluation committee. This job is now placed at a level higher than the officers’ job.

vii. Conversion into Monetary Value:

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, is usually undertaken to collect wage rates of certain key jobs in the organization.


i. Point method is superior and a widely used method of job evaluation. It forces the evaluator to consider all factors and sub-factors of a job. Hence it is a said to be a comprehensive and accurate method.

ii. Point values are assigned in a systematic way. So there is no scope for bias at any stage.

iii. It is reliable method since the raters using the same criteria would get the same results.

iv. It gives numerical basis for wage differentials.

v. It is a more objective method of job evaluation, as it rates various factors of a job on some predetermined criteria fixed after deep analysis and examination.

vi. Since job factor is scaled into degrees, wage and salary fixation is easier. Rates can be simply decided according to die points.

vii. If new jobs are added, these can be evaluated in the light of degrees specified.

viii. This method is understandable by all as various degrees in terms of which points are allocated are well defined.


i. It is time consuming and an expensive method.

ii. It is complicated method and an average worker cannot comprehend it.

iii. Preparation of manual for various jobs fixation of values for key and sub-factors and establishment of wage differentials for various grades are time consuming process.

iv. The selection of factors and sub-factors is a challenging task.

v. Since awarding points to various job factors is judgemental, it may be difficult to convince trade union leaders about the rationality of a point system of job evaluation and wage fixation.

vi. Determination of degrees of various job factors and assigning points to these degrees call for specialised skills. If such skilled persons are not available, this system cannot be practised.

vii. It is difficult to apply this method to managerial jobs wherein work content is not measurable precisely in quantitative terms.

viii. Errors may happen if the assigned point values are not realistic.

Method # 5. Factor Comparison:

This method is a combination of ranking and point system of job evaluation. It was developed by E.J Benge in 1926. Some key jobs are selected at first instance and then ranked by considering one factor at a time. Five factors are usually selected namely mental requirements, physical requirements, responsibilities, skills, and working conditions.


i. Selection of Factors:

The factors common to all jobs are selected and defined clearly namely skill, physical effort, mental effort, responsibility and working condition.

ii. Selection of Key Jobs:

Key jobs which serve as representative jobs against which other jobs can be compared are selected. A key job is defined to be one having standardized content and well accepted pay rate. Generally 10 to 15 jobs are picked up as key jobs.

iii. Ranking Key Jobs:

All the members of a job evaluation committee rank various jobs on the basis of each of the five factors in the light of job description of each job.

iv. Deciding Rate for Each Job:

A fair and equitable wage rate, hourly or daily is determined for each job.

v. Apportioning the Wage Rates:

The wage rate for a job is allocated among the identified and ranked factors.

vi. Evaluation of Remaining Jobs:

The remaining jobs are compared with the key jobs in terms of each factor. Suppose a carpenter’s job is to be evaluated; After comparison, it is, found to a be similar to a tool maker in skill (Rs. 25), Machinist in physical effort (Rs. 7), Welder in mental requirements (Rs. 14), Painter in responsibility (Rs. 12), and Painter in working conditions (Rs. 18). Then, the wage rate for this job would be (Rs. 76 = Rs.25 + 7+ 14 + 12 + 18).


i. This method is more analytical and objective. Hence trade unions may not raise any objection to this method.

ii. Since only limited number of factors are compared, chances for overlapping of factors are reduced.

iii. It provides more accurate information about the relative worth of a job as different comparable factors are compared with key jobs.

iv. It is within the grasp of an average employee.

v. This method is systematic as each and every job factor is quantified.


i. This method is quite easy and time-consuming to put in place in the organization.

ii. There may be frequent changes in wage levels, which may warrant corresponding adjustments in key jobs.

iii. This system considers only limited factors for the sake of simplicity and avoids overlapping, but it ignores other factors which may be important for the performance of the job.

iv. Using same criteria for all jobs within the organization is questionable as jobs differ across and within the organization.

Methods of Job Evaluation – Non-Quantitative and Quantitative Methods (With Merits and Demerits)

In principle, there are two methods of job evaluation:

1. Non-Quantitative Methods:

This is also called non-analytical or summary system because they utilize non-quantitative techniques of listing jobs in order of difficulty.

This method is further divided into two types:

(i) Ranking Method:

This is oldest method of job evaluation useful in small organisation. Under this method, various jobs are ranked in their order of relative difficulty in performance or jobs are ranked from highest to lowest, or in the reverse order, in order of their value to the organisation. It is not necessary to have job description for ranking the jobs because jobs are examined as a whole rather than on the basis of important factors in the job.

The variation in the monthly pay is due to the variation in the nature of job performed by the employees in the organisation.


The following are merits of this method:

(a) It is simple, easy to understand and practical.

(b) It is easy to explain to employees of the organisation.

(c) It involves less paper work.

(d) It is very economical and less time consuming.


The demerits of this method are:

(a) It is comparatively less accurate method.

(b) It is not suited for large organisation because rater will not be thoroughly familiar with all the jobs.

(c) It is highly subjective in nature.

(ii) Job Classification Method:

According to this method, all the jobs are sorted out into classes or grades predetermined and arranged in order of importance. These classes or grades are established by a committee. The description of every grade level is written by the committee utilizing basic job information which is usually derived from a job analysis.

This method involves the following steps:

(a) Determining the type of position to be evaluated;

(b) Determining the number of grades;

(c) Preparing grade level description; and

(d) Assigning individual jobs to appropriate grades.


The merits of this method are:

(a) It is simple to understand and operate.

(b) It is less subjective as compared to ranking method.

(c) It is generally acceptable by all employees in government departments without hesitation.

(d) It takes into account all the factors that a job comprises.


The following weakness of this method are:

(a) The detailed analysis of job is not possible under this method

(b) It is difficult to write a descriptions of a grade

(c) This system is difficult to operate if the number of jobs increases in the organisation.

(d) This system is rigid and not suitable for a large organisation.

2. Quantitative Method:

This is also called analytical system because they use quantitative techniques of listing the jobs which are more complex and time consuming.

This method is also further divided into two types:

(i) Factor Comparison Method:

This is systematic and more scientific method of job evaluation. In this method, the value of job is determined in terms of various types of factors. The job evaluation team selects some key jobs for which they understood job descriptions. They are analysed into basic factors.

The steps involved in this method are as follows:

a. Selection of key jobs;

b. Job descriptions and job specifications are written for selected jobs;

c. Find the factors in terms of which the jobs are evaluated.

Eugene J. Benge suggested the following five factors:

(i) Skill;

(ii) Physical effort;

(iii) Mental effort;

(iv) Responsibility;

(v) Working conditions;

d. Every member of job evaluation teams separately rank the selected jobs under each factor. Then final rank for each job factor is found through consensus agreement;

e. Allocate the current money to each factor and determine the wage rates for each key job; and

f. All other jobs are then compared with the key jobs and to determine their money value.


The following merits of the system are:

(a) This system is generally useful for white collar employees.

(b) It is more objective and easy to explain to employees.

(c) There is no upper limit to the value for a factor.

(d) Reliability and validity of the system are more as each job is compared with all other jobs in terms of key factors.


The following demerits of the system are as follows:

(a) The system is based on certain assumptions which may not be true in practice.

(b) It is costly to install and time consuming procedure.

(c) This system is not suitable to non-supervisory employees.

(d) The same criteria is used to assess the all other jobs in the organisation is some time questionable by the employees.

(ii) Pointing Method:

This method was developed by Merrill Lott in 1925. It is most widely used method of job evaluation. In this method, jobs are expressed in terms of key component factors then points are assigned to each factor according to the degree of its importance. The points of each factor are added and total point value for a job is obtained.

The following steps are involved in this method:

a. Few key jobs are selected for the purpose of evaluation;

b. Identify the factor common to all key jobs are selected for evaluation. The factors chosen must be acceptable to both management and workers.

The following factors are commonly used:

(i) Education and training;

(ii) Skill and experience;

(iii) Mental and physical abilities;

(iv) Responsibility for materials, tools, equipment and product;

(v) Supervision of others;

(vi) External and internal contacts;

(vii) Working conditions; and

(viii) Potential stress;

c. The break down each factor into degree and to assign a point value to each degree. The degree of each factor should be defined to the employees to avoid any ambiguity and

d. Assign money values to points and points are added to give the total value of a job then its total value is translated in terms of money


The following merits of this system are:

(a) It is considered as the most accurate method, because point values are assigned to all factors in a systematic manner.

(b) The human errors are minimized.

(c) This system has ability to handle large number of jobs.

(d) Jobs may change but the rating scale remain unaffected.


The drawbacks of the system are:

(a) It is most complicated and time consuming method.

(b) It is very costly.

(c) It cannot be used where intangible factors like personality and leadership dominate the job content.

Methods of Job Evaluation – Most Widely Used Methods of Job Evaluation (With Advantages and Disadvantages)

The most widely used methods of job evaluation are as follows:

1. Ranking Method,

2. Job Classification Method,

3. Factor Comparison Method and

4. Point Method.

Of these, ranking and job classification methods are non-quantitative, whereas factor comparison and point methods are quantitative in character. Besides, many organisations adopt variations of these methods, and many others use some other methods suited to their convenience.

The main features of the four methods are explained as follows:

1. Ranking:

This method of job evaluation is generally adopted in small-sized organisations having smaller number of jobs. Under this method, jobs are ranked from the highest to the lowest in descending order of the importance attached to the compensable factors present in them. Some groups of jobs in the hierarchy may include many jobs and others only one or a few. The money values of these jobs are determined accordingly.

The method involves the following steps:

i. Collecting Job Information:

The first step in the method is to obtain job information. This is achieved mainly through the use of “job analysis” and “job descriptions.”

ii. Selecting Raters and Jobs:

The next step is the selection of raters and jobs to be rated. It is desirable to select raters department-wise.

iii. Selecting Comparable Factors:

In the third step, compensable factors such as “difficulty or disagreeableness of the job”, “responsibility involved” and so on are selected. As these factors provide the bases of comparing jobs, these should be clearly explained to the raters so as to ensure consistency in their application.

iv. Ranking of Jobs:

The fourth step is that of ranking jobs. This is generally done by “card-sorting method” or the “paired comparison method.” In the “card-rating method”, the raters are given cards containing job titles and job descriptions. The raters are then asked to rank jobs from the highest to the lowest. In the “paired comparison method”, the rater compares each job with every other job requiring rating.

v. Combining Ratings:

When raters have ranked jobs department-wise, the next step involves combining department-wise ratings into a composite rating.

vi. Matching and Combining Rankings:

When job ranks for each department have been obtained, the next and final step is to combine departmental rankings to arrive at a single ranking. This task is generally performed by a committee consisting of departmental heads, and exceptionally, by a single person conversant with various jobs in the organisation. After rankings for jobs in the organisation as a whole are obtained, the number of grades of jobs is determined, and wage-rates or wage-scales for various grades are worked out.


(i) Ranking method is simple and easily explainable.

(ii) When compared to other methods, it involves much less time.

(iii) It is less expensive.

(iv) It is flexible and can be adapted easily to changed situations.

(v) It does not require services of highly skilled experts.

(vi) New jobs can easily be evaluated and ranked in the hierarchy.


(i) It leaves scope for haphazard evaluation of jobs without securing adequate job information.

(ii) There are chances of subjectivity in ranking jobs.

(iii) Generally, there is lack of competent raters, on account of which, the ranking may not always be perfect.

(iv) There is the possibility of adoption of different bases by different raters.

(v) It is unsuited to large organizations having a wide variety of jobs. If a large number of jobs are being ranked, the ranking method makes finer distinctions in job difficulty and importance than are necessary or even possible.

2. Job Classification Method:

“Job classification method,” also known as “grade description method,” involves demarcation of a number of classes and grades of jobs, and fitting various jobs in these classes and grades at their appropriate places. Describing each of the classes and grades is basic to the effectiveness of the method.

The method involves the following steps in order:

i. Collecting Job Information:

As in the “ranking method,” so also in the “job classification method,” the first step involves obtaining job information, for which, “job analysis” and “job descriptions” are usually used. The success of the method depends mainly on the clarity with which job descriptions in respect of each job are written.

ii. Separating Jobs by Type:

The second step in the method involves classification of jobs by type, such as accounting jobs, engineering jobs, clerical jobs and so on.

iii. Selecting Compensable Factors:

In this step, compensable factors, such as job-complexity, responsibility involved and mental ability required, are selected. In most cases, only a few carefully selected factors are chosen for the purpose.

iv. Developing Descriptions of Grades:

In this step, description of each class of similar jobs is worked out in terms of the degree or level of comparable factors present in them. The step also involves the determination of the number of classes into which various types of jobs may be grouped.

v. Classifying Jobs:

After descriptions of various classes and grades have been worked out, the next step is to classify jobs. This involves comparing job information with grade description. Each job is fitted in its appropriate place. Generally, grade descriptions of two extreme grades are determined first, and the respective places of the remaining jobs are decided accordingly. After jobs have been classified, monetary value of various classes of jobs and the grades is assigned.


(i) The method is more acceptable to employees as they themselves are aware of broad differences in jobs.

(ii) The method makes the evaluation of new jobs easier.

(iii) When the grades of each job are defined, wage and salary administration become easier.

(iv) Even where other methods of job evaluation are adopted, classification of jobs is also involved.

(v) The method can be utilised by all types of organisations.


(i) Difficulties are frequently encountered in the development of grade descriptions.

(ii) When grade descriptions are written only in limited terms, such as duties and responsibilities, there is a scope for biased approach towards placing jobs at their appropriate places.

(iii) There is the possibility of ignoring certain more relevant compensable factors.

(iv) The method is inappropriate in organisations having a cluster of heterogeneous jobs.

3. Factor Comparison Method:

The “factor comparison method” is a quantitative method of job evaluation. It involves comparison of different jobs in terms of the degree of importance of compensable factors present in them. Taking one compensable factor at a time, all jobs are compared to one another. For doing this, key jobs in respect of each compensable factor are selected.

These “key jobs” provide the scale to be provided for comparison. Some of the notable factors usually considered for comparison include skill requirements, mental abilities required, physical abilities required, responsibility involved and physical working conditions.

The method involves the following steps:

i. Collecting Job Information:

As in the ranking and job classification methods, this method also involves collection of adequate job information as the first step. This is done with the use of job analysis, job descriptions and job specifications.

ii. Selecting “Key Jobs”:

When job information has been obtained, the next step is the selection of a requisite number of “key jobs”. As the effectiveness of the method depends mainly on these “key jobs”, their selection has to be made very carefully.

iii. Ranking “Key Jobs” by Compensable Factors:

In this step, “key jobs” are ranked on the basis of compensable factor selected. For ensuring correctness of the results, it is desirable to repeat the ranking. At the end, composite ranks of “key jobs” are worked out.

An idea of the “key jobs” in terms of compensable factors in a jute mill is given in Table 7.1.

iv. Distributing Wage Rates by Compensable Factors:

This step involves distributing the existing wage being paid to each key job amongst the compensable factors on the basis of the importance of the factors as decided by the evaluators. An example of such a distribution of wage-rates by compensable factors in respect of a “key job” in a jute mill as per Table 7.1 may be cited as follows.

If the existing wage of a common mazdoor is Rs. 300 per day, its distri­bution among compensable factors in a “key job” may be as follows:

(a) Skill requirement – Rs. 52

(b) Mental abilities required – Rs. 40

(c) Physical abilities required – Rs. 80

(d) Responsibilities involved – Rs. 44

(e) Physical working conditions – Rs. 84

Such a distribution of wage-rates is made for all the key jobs.

v. Constructing and Using Job Comparison Scale:

After the wage-rates of “key jobs” have been distributed amongst compensable factors, the next step is to prepare the job comparison scale and adopt it for comparing each job factor-wise. The basis of this scale is the corrected money distribution allotted to “key jobs”. The application of the scale enables the placing of all the jobs in their appropriate positions in the hierarchy.

For example, the jobs of beamer and sectional sirdar are similar in respect of mental abilities required; those of sweeper and beamer in respect of physical abilities required; and the jobs of weaver and beamer in respect of responsibilities involved. The jobs, which are similar in respect of particular compensable factors according to job comparison scale, will be assigned the same monetary value. The total of the money value of all the compensable factors will be the correct pay for the job.


(i) The method is helpful in establishing a systematic and tailor-made job comparison.

(ii) It is flexible and can easily be adapted to changed conditions.

(iii) The method enables the development of objective guidelines in its installation. The originators of the method believed that “the method is sufficiently clear to permit comparable results whether used by management, representatives of employees or an outside consultant.”

(iv) The use of a limited number of compensable factors reduces the scope of overlapping.

(v) The job comparison scale can be used with ease.


(i) A major disadvantage of the method is only the use of certain well-recognized compensable factors. Particular organisations may find other compensable factors more appropriate.

(ii) In this method “key jobs” are selected on the basis of a combination of criteria. The wage-rate of the major criterion is accepted as correct. This may be erroneous.

(iii) The “key jobs” may change during the course of time. Job comparison scale based on these “key jobs” may lose its original utility.

(iv) Very often, the judgments of the persons doing comparison may be biased.

(v) In the application of job comparison scale to jobs other than “key jobs”, the wage-rates attached to them may not be acceptable to employees working on such jobs.

(vi) The method is generally complex and, often, difficult to explain.

4. Point Method:

The “point method” of job evaluation is a quantitative method, and when compared to other methods, it is most widely used in one form or the other. It involves identifying several compensable factors in a job and giving a numerical score on each of these factors. The compensable factors inter alia comprise the following – education and training, skill, effort, responsibility, working conditions and similar other factors.

These usually vary according to the type of job to be evaluated. Each factor may include certain degrees, to which varying scores are assigned. The scores allotted to compensable factors or their degrees in a job are added to obtain the total score for the job.

The “point method” of job evaluation generally involves the following steps:

i. Identifying Jobs to be Evaluated:

The first step in the method is to select the type of jobs to be evaluated. It is desirable to identify jobs having broad similarities in regard to compensable factors.

ii. Collecting Job Information:

As in other methods, so also in this method, it is necessary to obtain relevant job information. Job analysis and job descriptions are useful tools for the purpose.

iii. Selecting Compensable Factors:

The third step in the method is to select compensable factors. A mention of a few compensable factors has been made above. These factors may be different for different groups of jobs to be evaluated. As such, it is desirable to choose compensable factors more relevant to the jobs to be evaluated.

iv. Defining Compensable Factors and Their Degrees:

Defining compensable factors and the degree or level of each factor is an important step in the application of the method. As evaluation progresses, these definitions help the raters in making correct decision about the points to be allotted to the factor along with the consideration of the degree or level earmarked. It is desirable that general factors should be defined in broader terms, and the specific factors in a precise manner.

A great deal of caution has to be displayed in defining these to ensure clarity; otherwise, the ratings may become faulty. The most common of the compensable factors which have been used in the point system include – (a) education, (b) experience, (c) initiative and ingenuity, (d) physical demand, (e) mental or visual demand, (f) responsibility for equipment or process, (g) responsibility for material or product, (h) responsibility for safety of others, (i) responsibility for work of others, (j) working conditions, and (k) unavoidable hazards.

v. Assigning Point Values to Compensable Factors and Degrees in Each Compensable Factor:

This step involves determination of the points to be allotted to each of the compensable factors, and each degree in a particular compensable factor. For assigning points to each degree, two procedures may be followed. In the first procedure, points at flat-rates may be assigned such as 10, 15, 20, 25, 30 and so on.

In the second procedure, the number of degrees is ascertained, and points per degree are determined. To arrive at the points for subsequent degrees, the point allotted to the first degree is multiplied by the number of degrees.

vi. Assigning Monetary Values to Jobs:

After the total score of a job is obtained, the next step will be the determination of monetary value per point. Based on the flat monetary values assigned to various jobs, pay ranges or pay-scales are developed for similar groups of jobs. Although the number of jobs may be numerous, these are squeezable only to a few identical or similar groups for the purpose of remuneration. These pay- scales or pay-ranges generally contain minimum and maximum pay with provision of increments in the middle.

The number of pay-ranges or pay-scales differs from organization to organization, depending on a set of factors such as the size and composition of workforce, number and complexities of jobs, prevailing practices and the union’s stand.


(i) A major advantage of the point method is the stability of the rating scale. The scales developed may be used for a longer period.

(ii) It is relatively more accurate and consistent in use.

(iii) The scales used in the method are generally reliable.

(iv) It is also conducive to ensure agreement among the raters.

(v) As the method develops a scale for each compensable factor, the results are generally acceptable to all concerned.

(vi) The method is also helpful in the setting up of job classes.

(vii) The pricing of jobs becomes easy under this method.


(i) A major disadvantage of the method is the difficulty encountered in developing the method.

(ii) The determination of compensable factors and various degrees in each of them, and also defining them clearly are not an easy task.

(iii) Besides, the points allotted to various compensable factors and assigning points to various degrees may not always be consistent.

(iv) The installation of the method consumes much time.

(v) The method is also difficult to explain.

As a matter of fact, the success of job evaluation programme depends on a number of factors. In the first place, the employees and their union must have confidence in the reliability of the method adopted, and the element of objectivity involved. Second, wherever possible, associating employees’ representatives at various stages of the application of the method will be conducive to make it more acceptable.

Third, it is also necessary that the raters are trained adequately before implementing the method. Fourth, it is also necessary to ensure workability of the method. Last, the method must be easily understandable and easily explainable.

Otis and Leukart comment, “There are certain limitations which apply to all job evaluation systems. All systems lend themselves to manipulation, since human judgement is involved in deciding what rank a job should attain, to what grade it should be assigned, and what point values or what amount of money it should earn. The final wage value of a job depends therefore not only upon facts but also upon a varying amount of bias.”

Methods of Job Evaluation – 3 Important Methods: Grading, Weight-in-Money and Point System

According to I.L.O. job evaluation as “an attempt to determine and compare demands which the normal performance of a particular job makes on normal workers without taking account of the individual abilities or performance of the workers concerned.”

As per opinion of the Bureaus of Labour Statistics, U.S.A., “job evaluation is the evaluation or rating of jobs to determine their position in the job hierarchy. The evaluation may be achieved through the assignment of points or the use of some other systematic method for essential job requirements, such as skills, experience and responsibility.”

According to Wendell French, job evaluation is a process of determining the relative worth of the various jobs within the organisation, so that differential wages may be paid to jobs of different worth. The relative worth of a job means value produced by such factors, as skill, effort responsibilities and working conditions.

There are three methods of job evaluation and they are as follows:

1. The Ranking/Grading Method:

The job description are arranged and ranked according to the value of work as judged by the analyst.

It consists of three stages:

1. Making a thorough job analysis.

2. Expressing the findings of this analysis in a job description.

3. Ranking each job by arranging them in ascending order starting with the one with the minimum needs and ending up with the maximum needs. In ranking the jobs, care is taken to a number of factors like (a) Volume of Work (b) Difficulty of work (c) Monotony of work (d) Responsibility involved (e) Supervision needed (f) Knowledge and experience heeded (g) Working conditions.

Jobs are ranked first by departments. A comparison of departmental ranking is advisable so as to even up discrepancies in work of similar character.

The Advantages of Ranking System:

(i) It is very simple.

(ii) It needs less time than other systems.

The Disadvantages of Ranking System:

(i) It does not tell how much one job differs from another except indicating, that it is higher or lower than other.

(ii) Unless the same detail is followed as in the other systems the analyst cannot possibly be so familiar with the jobs as they should and hence the ranking is likely to be inaccurate.

(iii) In the absence of details, analyst cannot possibly be so familiar with the job as they compromise plays an undue part and wages for the job are, likely to influence the ranking.

This method is best suitable for small concerns.

2. The Factor Comparison or Weight-In-Money Method:

It is also called Benge Plan. It was originated by Eugene in 1928.

The method analyses jobs on the basis of following five factors:

(i) Mental Requirements:

This factor is measured on the basis of concentration of attention (tension) intensity and frequency of thought necessary.

(ii) Skill Requirements:

This depends on three considerations:

(a) Length of training needed for an average employment acceptable proficiency.

(b) The variety of complexity of the operations or of the job.

(c) The satisfactorily.

(iii) Physical Requirements:

It measures fatigue, the toughness of the job and its posture requirement.

(iv) Responsibility:

It is estimated through the possible damages value. The job is responsible for the equipment damage possible, the tool and fixture damage and the responsibility for safety of other employees.

(v) Working conditions:

The work location counts much. Dampness, wetness or very wetness of the location effects the working conditions. Noise involved, eye-strain, physical contact with oil, accident hazard and health due to dust or fume, all reflect the working conditions.

The jobs are ranked with each of the factors. Job and factors are compared. Money values are applied. Wage rate is fixed.

Advantages of Factor Comparison Method:

(i) Unlike jobs can be evaluated.

(ii) The system can be applied to combinations of clerical, manual and supervisory positions.

Disadvantages of Factor Comparison Method:

(i) The method is complicated and installation is expensive.

(ii) They are not explainable to the workers easily.

(iii) It needs expert persons to its development.

(iv) It needs leadership by a competent and experienced practitioner.

3. Point System:

The system uses a manual. The manual gives elements or factors upon which each job is to be rated and provides scales and yardsticks by which each degree of each factor is to be valued. It describes many job elements and prescribes the weighing to be applied to each element.

It includes a scale for each element by means of which varying degrees are to be appraised. These degrees determine the number of points to be credited to the job. The total of such points establishes the point value of the job.

The four job factors common to practically all point methods of job rating are skill, effort, responsibility and job conditions. Most of these- methods are expensive to administer and are not designed for small businesses. But every business can attempt.

On the basis of analysis of such factors one may rank or grade the jobs. When the magnitude of an operation justifies the paper work, this test of job requirements may be used to make written job specifications i.e. a list of all functions needed of employee who fills each job.

There may also be a rating sheet for each job, listing the degree of skill, responsibility and effort, and the job conditions that are required, so that the enterprise may at all times have evidence that its policy in setting comparative wage rates is equitable.

Methods of Job Evaluation – Top 2 Techniques

Method # A. Non-Quantitative Techniques of Job Evaluation:

1. Ranking Method:

In this method a job is ranked related to other jobs in an organization. First, detailed information about various jobs in an organization is obtained, then jobs are grouped based on their similarity and difference. Thereafter the compensable factors are selected, after which the jobs are ranked.

2. Job Classification Method:

In job classification method the committee groups similar jobs together in groups or classes based on the amount or degree of compensable factors that they contain. These groups or classes then help in determining the value of different jobs.

Job classes could at times be prepared on the basis of their difficulty level like:

i. Very simple tasks.

ii. Simple tasks directive in nature.

iii. Simple tasks but difficult process.

iv. Tasks calling for judgment by individual.

v. Regular tasks with accountability.

vi. Non-regular tasks.

vii. Complicated tasks requiring specialization.

viii.Creative, entrepreneurial tasks.

Method # B. Quantitative Methods of Job Evaluation:

1. Point Method:

Point method of job evaluation is used widely and consists of the following steps:

A. Identifying Compensable Factors for the Benchmark Jobs – Benchmark jobs are those that are commonly found in the market.

B. Assigning Point Values to Compensable Factors – There after the job evaluation committee determines the relative weight-age of various compensable factors and assigns point values to them.

C. Collecting Job Information – Detailed information about the jobs is obtained using job analysis techniques. Tools like Position Analysis. Questionnaire (PAQ), MPDQ etc. may be used for this purpose. The job description and job specification reports help in understanding the job & the ideal candidate better.

D. Rate Each Job using Point Table – Each job is then rated using the point table and the total points are calculated.

E. Plotting Points & Wage Rate – The points of the benchmark jobs so obtained are plotted with the market wage rates for these jobs. The Point values of benchmark jobs are taken on X-axis and market wage rates for these jobs are taken on Y-axis.

A line of best fit is drawn from the plot through use of scatter gram. This line is known as the wage trend line, drawn using a statistical technique known as least squares method of regression.

Point values of other jobs can be plotted on this line and pay-rates can be obtained. The employer has a choice of being the best-paymaster, average pay master or pay-at-par with the market. It all depends on employer’s compensation philosophy. There are companies who deliberately want to be at par or average pay master because they offer very good benefits and culture.

2. Factor Comparison Method:

Factor Comparison method is another quantitative approach for job- evaluation. It uses wages of the existing key jobs, which provide standard against which all other jobs are compared.

The factors used for analysis and evaluating jobs are:

(1) Skill,

(2) Mental effort,

(3) Physical effort,

(4) Responsibility, and

(5) Working conditions.

A composite score is obtained for all factors. The jobs under consideration are evaluated using factor-by- factor in relation to the key jobs on job comparison scale. Then each job is evaluated and compared with other jobs in terms of each factor. Pay is then assigned 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 weighed by importance. All other jobs are compared with the list of key jobs and wage rates are determined.