A set of compensable factors are identified as determining the worth of jobs. Show
Typically the compensable factors include the major categories of:
These factors can then be further defined.
The point method is an extension of the factor comparison method. Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job. Jobs are then grouped by total point score and assigned to wage/salary grades so that similarly rated jobs would be placed in the same wage/salary grade.
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GroupingAfter ranking, the jobs should be grouped to determine the appropriate salary levels. SoftwareInteractivePoint-Method Program
(https://hr-software.net/cgi/JobEvaluation.cgi)
Factor comparison is systematic and scientific method designed to carry out job evaluation which instead of ranking job as a whole, ranks according to a series of factors.  Factor comparison definitionFactor comparison is systematic and scientific method designed to carry out job evaluation which instead of ranking job as a whole, ranks according to a series of factors. The aim of factor comparison is to assign financial value to the relative parts of each job role. Factors of factor comparison1. Skill 2. Mental effort 3. Physical effort 4. Responsibility 5. Working conditions Factor comparison steps1. Selecting key jobs across the company, arund 20-25 jobs. 2. Selecting corresponding evaluation parameters for each of the selcted jobs. 3. Giving ranks to each job under each formulated factor in an independent fashion. 4. Assigning an equivalent monetary value to each job parameter. 5. Dividing money value of the job amongst the formulated factors. Advantages and disadvantages of factor comparison The advantages of factor comparison method- its broad application, - ensuring companies that their recruitment and selection methods provide a reasonable return on investment, - fair way of assigning money value - flexibility of the method as there is no upper limit on the rating of the factors. The disadvantages of factor comparison: - someone has to make a decision on evaluating the relative worth of each factor, - cost, - it's time consuming. Do you use a modern recruitment software? If not, you're missing out. See how your life can be easier. Start your free 14-day TalentLyft trial.Start my free trialSimilar to thisA job evaluation involves the use of a systematic process to determine the importance, monetary worth and complexity of jobs in an organization relative to one another. It uses objective criteria to help companies determine how jobs should be filled, what the pay level (or grade) for these positions should be, and other factors regarding how these jobs should be managed. Nội dung chính Show
An effective job evaluation system can help determine the best rate of pay for a position and develop a broad job description that easily adapts to the company’s needs as they change over time. Popular techniques used in job evaluations include ranking, point method, factor comparison and classification, according to the Society for Human Resource Management. Reviewing different job evaluation methods will help you create a protocol that works for your department or company. Using a Ranking SystemsThe simplest and most common technique for job evaluation employs a system whereby human resources associates or consultants rank jobs in an organization based on a single factor, such as difficulty or education required to effectively perform the job. They then base compensation on ranking order with the highest ranked position earning the highest pay. The points give an indication of what it takes for a person to move from one of these positions to the next. This least-expensive method of job evaluation works well for smaller businesses with small staffs and tight budgets. Although this method can prove effective, its analytical system does not reach deep enough to determine other things associated with job evaluation, such as the value of the job to the individual organization or experiential competencies necessary to properly perform the job. The Points MethodA more complex job evaluation technique, the point method, requires evaluators to assign points to a number of compensation characteristics based on skill level, responsibility, effort required and working conditions. They then assess the level to which each of these are present in the job and assign points accordingly. The jobs with the highest points garner the highest pay with this popular technique. The Factor Comparison MethodFactor comparison, a sophisticated, yet time-consuming method, utilizes the techniques found in several job evaluation schemes, explains TalentLyft. The first step in factor comparison involves assessing each job based on characteristics used in the point method, but without assigning points. Next, evaluators analyze their findings against the market rate of pay for the compensation factors ranked in the first step. Finally, they establish external benchmark jobs that they use to compare to the job and its compensable characteristics to determine rate of pay. The Classification TechniqueThe classification method requires that evaluators categorize jobs into groups with relatively the same value to a business, according to Academy to Innovate HR.com. The groups are commonly called grades. Evaluators categorize the grades with similar compensation characteristics together. You will often see job grades noted in want ads for government jobs (which often set the pay scale for each job at a grade level). The characteristics evaluators use in these types of performance evaluation methods may include level of responsibility required, competencies required and physical exertion necessary to perform the job. Those evaluating the positions may choose to include other characteristics, such as education or security clearance levels required. Job evaluation is a complicated but important process in achieving pay equality. In this article, we will explain what job evaluation is, discuss the four key methods of job evaluation, and we will take you through the full job evaluation process. Let’s dive in! Contents What is job evaluation? A definitionJob evaluation is the systematic process of determining the relative value of different jobs in an organization. The goal of job evaluation is to compare jobs with each other in order to create a pay structure that is fair, equitable, and consistent for everyone. This ensures that everyone is paid their worth and that different jobs have different entry and performance requirements. Job evaluations are developed by HR, often together with workers unions and other social partners and commercial consultancy companies. The advantage of job evaluation is that it does not take into account the qualities of the job holder. According to a report on this topic by the European Commission, the relative worth of a job is assessed irrespective of the qualities of the specific job holder. The relative worth corresponds to a ranking, which in turn corresponds to basic pay brackets or scales (called wage grids). Personal qualities of the job holder (including seniority, education level, tenure) are rewarded by an entitlement to higher steps within the applicable pay bracket. Related (free) resource ahead! Continue reading below ↓ HR Metrics for Organizational Development Cheat SheetOrganizational development is a critical process that should be monitored with the right HR metrics. These strategic metrics will help you manage your organization’s ability to change Download the FREE metrics cheat sheet Job evaluation requires some basic job analysis to provide factual information about the jobs concerned. The starting point is often the job analysis and its resulting job description. Based on this, the job is evaluated. One of the key criteria in the evaluation is the added value of the job to the organization. Based on this evaluation, the job is added to the job structure. The resulting structure ensures pay transparency and equity between gender and minorities. The European Commission actively encourages the use of job evaluation. According to Cordis, which coordinates EU-supported R&D activities, 49% of European organizations in the private sector use a formal Job Evaluation scheme, with SMEs at less than 3%. This lack of evaluation leads to unstructured wage payment practices and a lack of requirement-based career and skill development for employees. Job evaluation methodsThere are different methods that can be used for job evaluation. The easiest way to split these up is to make a distinction between qualitative and quantitative methods. Four common job evaluation methods
Each of these methods has its own advantages and disadvantages. The qualitative methods are usually faster while the quantitative methods are more objective and take into account required skills and responsibilities. The best approach is always a combination of methods. We will give a brief explanation of each of the methods.
Depending on the organizational size and complexity, different methods are chosen. The paired comparison method (as displayed below) works well for smaller organizations, while a factor-comparison or a point-factor method works better for larger organizations. Point-factor method Of all job evaluation methods, the point-factor method is probably the best known. On a high level, the steps for this approach are as follows:
The result is a spread of points and a salary range per job, similar to the image below. Any outliers can be calculated and need to be dealt with on an individual basis. We will go into more detail in the next section. The job evaluation process: 4 stepsThe job evaluation process involves four steps. These steps are planning and diagnosis, design & development, validation & modeling, and communication & roll-out. Armstrong et al., 2003Phase 1. Planning & diagnosisIn this phase, the job evaluation project is started with an initial workshop. During this workshop, the evaluation is scoped and approaches for evaluation are decided on. Map out yourPath to HR LeadershipTry our need tool to determine the direction in which you want to progress based on your HR career goals and capabilities. Get Started In terms of scope, decisions need to be made on cost, time constraints, the degree of rigor applied, administration, tooling & software, how much external help is required, how to build on previous projects, and how job evaluation will be used to support equal pay. The organization also needs to decide on their job evaluation scheme. There are multiple schemes with different degrees of customization.
Next, benchmark jobs are identified, data collection is planned, and a communication plan is created. Phase 2. Design & developmentIn the next phase, the evaluation elements and levels are determined. This often happens through a workshop. In this phase, it is important to identify elements that are relatively timeless. Keep in mind: the job scheme is relevant for as long as the elements it is based on are relevant. Because of the cost and effort to create a job scheme, they could stay relevant for well over 25 years. In our article about job classification, I give the example of Russian organizations that still work with the frameworks provided by the state during the USSR. Once this is all done, data on the different roles in the organization is collected. Phase 3. Validation & modelingIn the third phase, the results from the data collection are analyzed and the weightings of the different elements are discussed. This may require some fine-tuning as initial definitions may skew the results. Next, a pay grade structure is drafted, and jobs are categorized. There will always be a set of jobs that do not match the pay grade structure. An example could be specialist roles in artificial intelligence and machine learning that are very scarce while crucial for the company’s future. These may have to be put on a different salary scale. The risk here is that these jobs may be much more abundant in say 10 years, so by then they may be overcompensated so this may have to be revised later. Phase 4. Communication & roll-outIn the final phase of the job evaluation process, the structure is implemented. Best practices are to explain everyone affected why their pay grade structure may have changed. There should also be an opportunity to appeal decisions that are perceived as unfair. Here it is important to hear and investigate what employees have to say. This phase will be easier if there is buy-in from the organization. Also note, lowering salaries for workers may not be possible as wages could be protected under national labor laws or it may prompt people to leave the organization. Taking all of this into account will be an administrative challenge. ConclusionThat is it for the job evaluation. There is of course much more that can be said about this topic but that would require us to write a book. Resources we can recommend are the Hay job evaluation manual and the book Job Evaluation by Armstrong and colleagues, which we used as one of the resources for this article. FAQWhat is job evaluation? Job evaluation is the systematic process of determining the relative value of different jobs in an organization. The goal of job evaluation is to compare jobs with each other in order to create a pay structure that is fair, equitable, and consistent for everyone. What are the four job evaluation methods? Four common job evaluation methods are the ranking method, job classification, the factor-comparison method, and the point-factor method. What is the classification method of job evaluation? The job classification method ranks job based on a pre-determined grade comparison. An example classification is a CEO, vice president, director, manager, and operator. What is the first step to using ranking as a job evaluation method?Obtain job information - The first step of the ranking method of job evaluation is job analysis. Select raters and jobs to be rated - Rank jobs by department or in clusters i.e. factory workers, clerical workers, and so on. What are the 3 compensable factors in job evaluation?Typically the compensable factors include the major categories of:. Skill.. Responsibilities.. Effort.. Working Conditions.. What is the third step in the factor comparison method for job evaluation?The third step in the factor-comparison method for job evaluation is: A. developing a job-comparison chart to display the benchmark jobs in an organization. What are the five most commonly used compensable factors in a factor comparison system?The compensable factors used are usually (1) mental requirements, (2) physical requirements, (3) skill requirements, (4) responsibility, and (5) working conditions. These are considered to be universal factors found in all jobs. What is the first step to using ranking as a job evaluation method?Obtain job information - The first step of the ranking method of job evaluation is job analysis. Select raters and jobs to be rated - Rank jobs by department or in clusters i.e. factory workers, clerical workers, and so on.
Which of the following is the second step in the factor comparison method for job evaluation?Which of the following is the second step in the factor-comparison method for job evaluation in an organization? a. The comparison factors to be used are selected and defined.
What is the third step in the factor comparison method for job evaluation?The third step in the factor-comparison method for job evaluation is: A. developing a job-comparison chart to display the benchmark jobs in an organization.
Which of the following describes a job evaluation method?It is the process to determine systematic and analytic manner the comparative worth of the on in an organization. Job evaluation has four methods of job evaluation. These methods are ranking method, point method, factor comparison method, and grading method.
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Which of the following is the first step in the factor comparison method for job evaluation?
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