CHAPTER 8
JOB EVALUATION
To formally establish an internal equity process, organizations have relied on some form of job
evaluation. Many different kinds of job evaluation methodologies have been developed since the 1920s.
Most job evaluation methods currently in use are, at best, one generation removed from the initial plans
developed in the 1920s and 1930s. In fact, in many cases, the plans currently used are the same as those
developed at that time.
Possibly the most poorly understood area of basic wage and salary administration relates to the
identification, description, and use of compensable factors. Compensable factors are those elements
common to all jobs that differ by quality and quantity within each job. These degrees of differences
within jobs make it possible to determine job worth; thus, compensable factors become the yardsticks or
indicators of differences between jobs. With the increasing importance of identifying job worth and
relating difference in pay to difference in job worth, a measurement system using valid and reliable
compensable factors becomes more valuable to compensation managers.
Once again, the subjectivity-objectivity issue arises. The development and description of
compensable factors is basically an artistic endeavor. It does require the use of experts who understand
world of work requirements and who are able to formulate their ideas into logical, rational, and orderly
processes. Job evaluation then requires people who have an open mind, who wish to perform in a
knowledgeable and fair manner the analysis and evaluation of jobs. This demand on human skills
certainly opens the job evaluation process to all of the evils that arise because of subjective
considerations. Like so many practices in the field of personnel-human resource management, objectivity
will always, to some degree, be at the mercy of subjective judgments. The most sophisticated procedure
will not eliminate attempts of unfair, unethical manipulation. Well-designed job evaluation methods
require good management, including necessary auditing and monitoring of the processes to ensure
operation as designed.
KEY CONCEPTS:
2. The use of ranking in whole job methods of job evaluation.
4. The use and value of intra- and interoccupational comparison charts.
6. The division of compensable factors into universal factors, subfactors, and degrees or levels.
8. Removal of certain compensable requirements from the job evaluation process—e.g.,
working conditions and physical demands.
10. Weighting and scoring processes.
SIGNIFICANT POINTS OF INTEREST
2. A wide variety of job evaluation methods is available for determining job worth.
4. Although many different job evaluation methods are available, most organizations with
5. Many job evaluation methods favor how a knowledge or skill is acquired instead of defining
and weighting the levels of knowledge or skills required in performing an assignment. In
6. Two very general ways of classifying job evaluation methods are (1) group them into
7. Evaluating job worth through the ranking method is useful in small organizations or when
working with a select group of jobs.
8. A commonly used method of job evaluation is to identify key or benchmark jobs (those
9. The use of more than one job evaluation method within one organizational setting depends,
10. Removing job evaluation from the confines of the human resources-compensation
11. Compensable factors provide a systematic and precise approach for determining job worth.
12. To be most useful in determining job worth, compensable factors must be properly
identified, defined, and weighted.
13. If the identification, definition, and weighting procedures are to produce valid and reliable
14. Most compensable factors will relate to such universal considerations as job knowledge and
15. A typical problem related to traditional effort-type compensable factors is that effort relates
to mechanical activities and not to intellectual activities. Early job evaluation plans related
16. Working conditions is another holdover factor from the heavy industrial setting where
17. There will be an expenditure of much time and effort in the next decade to validate
compensable factors that will be useful in determining internal equity and will not
discriminate against typical female and minority occupied jobs.
18. An understanding of the concept of relativity is critical in determining the weight of
19. Statistical procedures are available for analyzing subjective considerations and translating
these subjective views into objective quantitative data.
20. Although hundreds of compensable factors have been identified over the past fifty years,
21. Most organizations using some kind of a point compensable factor method are variants of
the job evaluation methods developed by Western Electric, National Electrical
Manufacturers Association (NEMA), or the National Metal Trades Association (NMTA).
22. The factor-guidechart profile method of job evaluation used by Hay Associates combines
23. Most compensable factor methods use factors that are described in very universal terms that
relate to a wide variety of jobs in different occupations and business settings. A major
variation to this approach was developed by the federal government in its Factor Evaluation
System (FES) which describes each factor and factor level in terms that relate to the specific
occupation or class-series being evaluated.
24. Job evaluation methods using multiple regression are currently receiving much publicity.
Many proponents of this approach are claiming that, through the use of market-weighted