Job Evaluation

Let’s Define
• Job evaluation is the process of analyzing and assessing
various jobs systematically to ascertain their relative worth
in an organization.
• It is an assessment of the relative worth of various jobs on
the basis of a consistent set of job and personal factors, such
as qualifications and skills required
• Dale Yoder: Job evaluation is a practice which seeks to
provide a degree of objectivity in measuring the comparative
value of jobs within an organization and among similar
organizations.
• Job evaluation is the evaluation or rating of job to determine
their position in job hierarchy. The evaluation may be
achievement through assignment of points or the use of
some other systematic rating method for essential job
requirements such as skill, experience and responsibility
Objectives of Job Evaluation
• Provide a standard procedure for determining the relative
worth of each job in a plant
• Determine equitable wage differentials between different
jobs in the organization
• Eliminate wage inequalities
• Ensure that like wages are paid to all qualified employees for
like work
• Form a basis for fixing incentives and different bonus plans
• Serve as a useful reference for setting individual grievances
regarding wage rates
• Provide information for employees’ selection, placement,
training and numerous other similar problems
• Provide a benchmark for making career planning for the
employees in the organization
Principles of Job Evaluation
• Definition: Jobs must be clearly defined such that they are
identifiable and easily distinguishable. These jobs must then be part
of the job description.
• Evaluation: A job evaluation scheme must be arrived upon and used
as a standard and all jobs in the organization must be evaluated as per
that scheme only.
• Job Understanding: Job evaluators need to have deep insights into
the job design process. They must have a methodical understanding
of various tasks involved.
• Concern: Job evaluation must be concerned with the job and not with
the person. i.e. it is the job that has to be evaluated and not the person
• Assessment: The assessment has to be carried out in an acceptable
manner and by competent people. Further, it should be based on
some scientific procedure and not just judgement of a few people
Methods of Job Evaluation
• Ranking Method: Being able to rank the positions within a company based on their
contributions toward the goal is one of the easiest job evaluation methods. With the
job ranking method, jobs and the employees who perform them are ranked from
highest to lowest, depending on their quality and value to the organization
• Job Classification: The job classification method uses job classes or groups to
provide more customization in the evaluation. The job classification method allows
us to predetermine the job classes and assign each job to these classes, which makes
evaluating the jobs based on classification very objective.
• Factor Comparison: What differentiates this method from the others is that it is
more systematic and analytical. Rank each job according to a specific set of factors,
such as physical effort, mental effort or responsibility – all of which have
predetermined weights indicating their importance to success. The goal is to apply
these factors to all jobs within the company, which allows us to make job-to-job
comparisons and rank each one accordingly.
• Point Method: This method works by identifying key job factors and then assigning
points based on importance. For example, you may determine that skill is one of the
factors. You can then break this category down even further and assign points based
on experience, education and ability. Then, cross-reference the points with a pay
structure, which allows you to determine compensation for a particular position.
Advantages of Job Evaluation
• Rating Of Jobs Scientifically: Job evaluation helps to determine the worth or value
of different types of jobs in the organization. So, it is a scientific technique to rate
the jobs according to their importance and nature.
• Rational Wage Structure: Job evaluation helps to develop sound wage policy in
the organization. It helps to establish rational wage policy according to the nature
and value of the jobs.
• Arriving at a list of Specialized Jobs: Job evaluation promotes division of labor
and specialization by defining the job in terms of nature and complexity.
• Harmonious Industrial Relations: Job evaluation helps to establish harmonious
relationship between manager and employees by eliminating wages controversies.
It also helps to maintain good labor relation in the organization.
• Identifying Training And Developmental Needs: Job evaluation helps the
management to identify the training and development needs of different jobs by
ranking them according to their importance.
• Cost Minimization: Job evaluation helps to reduce labor turnover rate by fixing
proper pay structure and by maintaining good labor relation. It helps to improve
production rate which minimizes the cost of production.
• Higher Employee Morale: Proper placement, uniform pay structure and job
classification is possible because of job evaluation. It helps to motivate and
maintain high employee morale in the organization.
“The best advice I've ever received is, 'No one else knows what
they're doing either.”

- Ricky Gervais

Prof. Surya Karteek Yamujala

Balaji Institute of Modern Management
Mob: +91 9581483390
Mail: Surya.Yamujala@bimmpune.com