Job Evaluation

Job Evaluation Methods

The numerous methods for conducting a job evaluation range from relatively simple approaches (e.g., ranking) to more sophisticated, complex approaches (e.g., point-factor). Job evaluation methods also differ in terms of whether they are standardized systems or whether they are custom-tailored to the specific organization. The Hay Guide Chart–Profile Method™ is a proprietary, standardized system that has been used by many different organizations as a job evaluation method. The Position Analysis Questionnaire (PAQ) is another standardized system that has been used for job evaluation purposes. It consists of approximately 200 items, referred to as job elements, that assess such aspects as how information is inputted in the job, mental processes used by the worker, relationships with others, and the job context (the physical and social environment). Research indicates that different job evaluation methods may produce different conclusions about the worth of jobs to the organization. Because the point-factor system is the most common method of job evaluation, most of what follows here is based on this approach.

Developing a Point-Factor Job Evaluation System

Briefly, organizations choosing to create a customtailored solution are likely to design a point-factor system using the following six steps. First, a committee is formed. Typically, this committee will include an expert in job evaluation, who may be an internal human resources manager or an external consultant, as well as other relevant parties (e.g., a union representative) and members who are familiar with the jobs to be evaluated. The next step is for the committee to determine what compensable factors will be used in the system. Simply stated, compensable factors are the underlying determinants as to why some jobs are paid more than others. Common compensable factors include mental demands, responsibility, education, and physical conditions. A clear, specific definition should also be provided for each compensable factor. The third step is to determine the relevant levels on each compensable factor. If education is a compensable factor, for example, the committee may determine that four levels are appropriate, such as high school diploma, 2-year college degree, 4-year college degree, and master's degree. There is nothing magical about the levels that are created. What is important is that the levels be appropriate for the jobs that will be evaluated.

In the fourth step, a total number of points is established for the system overall. Often, 1,000 points is used. The goal is to have a sufficient number of points to avoid a ceiling effect. The best way to understand the ceiling effect is to think of a scale to weigh people. If the scale does not go past 100 pounds, it will be impossible to accurately determine the weight of most adults.

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