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Four Methods of Job Evaluation: Ranking, Classification, Point & Factor Comparison

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  • 0:02 Job Evaluation Defined
  • 1:15 Job Ranking
  • 1:44 Classification
  • 3:37 Point-factor Rating
  • 4:40 Factor Comparison
  • 5:39 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Are some jobs in an organization more valuable than others? In this lesson, we'll learn about job evaluation and how human resource management professionals can use job evaluation methods to help determine the value of jobs in their organizations.

Job Evaluation Defined

Beth is a human resource specialist for a toy manufacturing company. Her boss has asked her to perform a job evaluation for all the positions currently held by employees of the company. Job evaluation is a systematic and objective process used by organizations to compare the jobs within the organization to determine the relative value or worth of each job. Keep in mind that the focus is on evaluating the job, not the people that perform the job.

Beth's employer will use job evaluations to determine the comparative worth of each job, which will then help determine the basis of the wages and salaries offered for each job. It helps ensure that everyone is paid fairly relative to one another based upon the value they bring to the organization. For example, if a mail clerk is paid more than an engineer, then there's probably a problem with pay equity because an engineer generally brings more value than a mail clerk.

Criteria used in job evaluations can include factors such as education qualifications, skills needed, working conditions and job responsibilities. Moreover, there are different types of methods available for Beth to use. Let's take a look at some of her options.

Job Ranking

Perhaps the easiest method that Beth can use for job evaluation is the job ranking method. This method involves putting all jobs in an organization in rank order of importance based upon their contributions towards the achievement of an organization's goals. Beth may perform the ranking herself after performing a job analysis of each position or bring in subject matter experts more familiar with the jobs. For example, a marketing analyst will receive a higher ranking than a janitor.

Classification

Beth can also use the classification method. In this method, a series of classes and grades are defined. Each class will describe a group of jobs. Each grade in a class will represent different levels of difficulty and responsibility. Beth will sort the jobs into each class by matching up the job descriptions for each job with the class and grade descriptions and assign the job to the class that's the best match. Let's look at an example.

Let's say that Beth wants to develop a class for administrative workers. Within this class, she may have three different grades, or levels, based upon the nature of the work and the level of responsibility. She calls them A-1, A-2 and A-3:

  • A-1 performs clerical work under close supervision. The job typically requires a high school diploma and a general knowledge of office procedures, equipment, etiquette and the ability to follow instructions. There are no supervisory responsibilities.
  • A-2 performs clerical work with no supervision and may be assigned simple special projects. The job typically requires an associate level or vocational degree and requires the same knowledge as an A-1 as well as intermediate knowledge of word processing and spreadsheets.
  • A-3 may perform the duties of A-1 and A-2, but is independent of any supervision. A-3 personnel may also engage in special projects without supervision, provide personal administrative assistance to management level personnel and may have supervisory responsibilities over A-1 and A-2 personnel.

Beth may place the executive assistant to the company's president in the A-3 grade, while a mail clerk would be placed in grade A-1. Of course, Beth may develop classes and grades of other types of job categories such as research, management and marketing. A good model that Beth can follow is the federal government's GS classification system.

Point-Factor Rating

The point-factor rating method is another approach that Beth can use. The point factor method uses specific factors to determine the relative value of a job compared to the others in the organization. Let's see how it works.

In this method, Beth will select compensable factors related to the job, which are factors that have value to the company such that the company is willing to pay for them. Examples of a compensable factor may be problem-solving or supervisory skills. Some factors are more important or valuable than others, so Beth will give a relative weight to each factor.

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