Types of Job Evaluation Systems
The process of evaluating a job involves systematically determining the value of a position within an organization. It differs from performance evaluations and assessment in that the main goal of a job evaluation is to rate the job in itself, not the person responsible for doing it. Job evaluation determines the value of one job in relation to others in the organization in order to ensure a fair job hierarchy and/or salary system is in place. There are many different types of job evaluation systems to choose from. The most common are job ranking, factor comparison, point evaluation and job comparison methods.
Job ranking works best for small organizations and is the fastest, easiest and least expensive job evaluation method to employ. When using ranking as a method for job evaluation, simply rank the jobs in order from highest to lowest in regards to their importance to your organization.
Classification is a frequently used job evaluation method by government and university employers. The purpose of using the classification method of job evaluation is to establish pay grades. When using this method, first a description is created for each job category, and then a set of standards is developed for each set of jobs within that category. Finally, positions are matched to categories based on the similar duties and overall value to the organization.
Points evaluation is the most commonly used method of job evaluation. In this method, a point system is made based on the overall monetary value of a position within the company. The first step in a points evaluation is determining what skills a group of jobs is expected to possess. Points are assigned based on these characteristics that represent the importance of the job within the organization as a whole.
Factor comparison utilizes several evaluation methods in order to evaluate jobs within an organization. This method allows for customizable job evaluation, but it is also very time consuming. In factor comparison, evaluators first rank jobs using a point assessment. Then jobs are analyzed in regards to the external labor market to determine the market rate for the skill set ranked in the points assessment. Jobs in an organization are then compared to benchmark jobs established in conjunction with the market value of a position's compensable factors. Finally, a salary is determined.