advantages and disadvantages of point method of job evaluation advantages and disadvantages of point method of job evaluation

A job evaluation program is useful for the following reasons: (i) In the case of new jobs, the job evaluation often facilitates fitting them into the existing wage structure; (ii) Job evaluation is a logical and, to some extent, an objective method of ranking jobs relative to one another. The process of job rating is to some extent, inexact because some of the factors and degrees cannot be measured with accuracy. It tends to be flexible because it does not place proper emphasis on the wage-rates in the industry as a whole. The disadvantages are they are complex and still rely on judgment for scoring the jobs themselves. Strategic Management 3. When applied to the whole industry, it facilitates comparison between wage rates in two different localities. 3. This job evaluation method works by ranking jobs according to their perceived value compared to other jobs. It can be enforced in a wide area of jobs and newly created jobs. The point rating method is the most sophisticated and widely used method in business organizations. However, there are certain disadvantages: (i) Job evaluation system takes a long time to be adequately implemented and it not only requires specialized and trained personnel but it may also be costly. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Hence, it makes recruitment and selection easier. Sales Management Irrespective of the job evaluation method used, a number of potential problems can arise. The advantage of the point method of job evaluation is its impact on true objectivity. It only works effectively if those involved believe it to be fair. Communicating the job values assigned to the employees can also be challenging as they are often subjective. The same point is assigned to each factor and the total number of points indicates the jobs ranking. There is no clear-cut opinion amongst the scholars as to how many factors should be used and what weightage should be assigned to each factor. Financial Management What are the features of issue factor method? Using the same criteria or key factors to measure all jobs in an organization may not be effective in situations when jobs vary within the organization. (vii) It ensures employee satisfaction about wage level and wage equity. Virtual & Las Vegas | June 11-14, 2023. Job evaluation is a systematic method by which compensation professionals compare jobs to determine pay rates that are internally equitable and externally competitive. 1. The Factor Comparison Method 5. 2. UGC NET, Job evaluation methods are classified into two categories which are further subdivided into two types , Difference between Micro and Macro Economics, 5 Proven Ways to Build Trust With Upper Management (For Leaders) - Sancus Leadership, 10 Roles of Manager: Managerial Roles by Henry Mintzberg. The factors identified may not be exhaustive and accurate . ANSWER : The advantages of this system include a high degree of precision . Defining the key factors that are present in all jobs. However, others may not and tend to be confused about self-evaluation. Which of the following is not a standard mounting dimension for an electric motor? (1) It is a systematic, quantifiable method for which instructions are available. It provides a better basis for assessing the relative worth of each job when compared to the non-analytical methods. As such, the benefit of point-factor based job evaluation methods is that they can give you a clear marker you can use to increase the objectivity and consistency of your findings. 3) Helps in Recruitment and Selection: Job evaluation helps in determining the need of new employees. viii. To conclude, we can say that job evaluation is not an exact science but it is a systematic way of avoiding several anomalies in wages. Unless the job values and contents are rechecked so as to include the changes, they will not represent the true position. Account Disable 12. (v) It facilitates wage/salary administration by bringing about uniformity in wage rates. The disadvantages include the complexity and difficulty involved . So some kind of Merit Rating Scheme has to be super-imposed upon the evaluated rates. For these reasons, it is accepted by both workers and the management without any hesitation. 00:00 00:00 Brought to you by Techwalla iv. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". In other words, continuing attention and frequent evaluation of a job are essential. Content Guidelines 2. The points for individual factors are added up to get a point value for the whole job. The point method is an extension of the factor comparison method. When the economy is unstable, employers are faced with difficult decisions around staffing, pay and benefits. It needs the expertise to decide factors, degrees, and point values. It provides a clear and objective basis for wage negotiation and collective bargaining. Disadvantage It is subjective in nature because a committee rank the job hence it enhances the chance of human error. The method helps in removing grievances arising out of relative wages; and it improves labour-management relations and workers morale. Thus, job evaluation system, in spite of the limitations, can produce reliable results. You can specify conditions of storing and accessing cookies in your browser, Advantages and disadvantages of point method of job evaluation, Who is the number one travel agents in Bihar?, Future suggestions for e commerce's company, Clarity of role is not a part of the organising function of management, The key element that are involved in entrepreneurship are, What rules should be followed by a telephone operator before transferring a call. By clicking, you agree to our Terms and that you have read our Data Use Policy, including our Cookie Use. var temp_style = document.createElement('style'); Quantitive Technique and Operational Research What are the four methods of job evaluation? If you like the fitness and motion activity tracking feature on the iPhone, you should have this setting left on. Four primary methods of job evaluations used to set compensation levels are point factor, factor comparison, job ranking and job classification. It helps in standardization of job that is same kind of job will require same kind of people in terms of qualification, skill and abilities, so that they fit in same wage and salary structure. Copyright 10. It is easy to understand and clear on the process and makes more accurate judgments. Once this is done for all the compensable factors to be used, the analyst examines individual jobs to determine which factors are most important, assigning weights to these categories. Human Resource Management The job scores are added to determine a total and are used to create a job hierarchy by using either the original points (job ranking) or a translation into a grade structure (job grading). But as the evaluators become more experienced at interpreting the factor plan and input of job descriptions, they start to gain greater clarity on the process and make more accurate judgements. Principles and Practice of Management What are the advantages of Factor comparison method? There is a strong feeling among the workers that individual merit should also be rewarded. 1. ii. There are a number of points that must be remembered. The awards by each feeding are sum to form a amounts point score for the job. What to read next. Calculated Decisions: What is a Compa-Ratio and How Can Organisations Use It? But opting out of some of these cookies may affect your browsing experience. Weaker groups are better served by an evaluation plan than by the market; the former places the emphasis not on force but on equity.. Points are assigned to job based on these factors, their degrees and weightages. 6-8. Business Communication Job evaluation is based on the assumption that wage rates can be related to the work of a given job. (1) It is a systematic, quantifiable method for which instructions are available. Therefore, the evaluation of a job today is made on the basis of job factors, and does not reflect the time job value in future. This method begins with the collection of information and data about various jobs with the help of job analysis and then all the jobs are put under different grades or classes that match them best based on the nature of the job, skill, responsibilities, experience, and another requirement. In the final step, the job evaluation analyst totals the points for the office manager job and groups it with other jobs with similar job totals. Although it is complex and may require the participation of management, once completed the point method of job evaluation is easy to use and is not likely to need frequent updating. (iii) The need for employee understanding; (iv) Acceptance and Support of the Evaluation Procedure. 1st: conduct job analysis. ii. Point-Factor Method. advantages:this method may be considered less biased by employees, disadvantage:the process of assessing and assigning points to compensable factors is a expensive method to implement, This site is using cookies under cookie policy . The Point-Factor Method 4. document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. iv. Assigning points to factors and degrees Evaluators examine each job on a factor-by-factor basis and ascertain the degree the job fits into each factor. These variations are wider in such cases where the average pay given by the organisation is lower than the current pay in other organisations for the same position in the same industry, or in the same geographical region. g. Since workers who feel that they are paid on the basis of merit will tend to be happier and more productive than those who have reason to argue the wage scale, more job evaluation is needed but it should be a better job evaluation and might be made better if common-sense and a due regard for the scientific method were followed. Uploader Agreement. are avoided, because wage rates are set by experts other than the management and that too after a careful job evaluation programme. juan holds ________ power. e. Too great a controversy is raised over method and not enough attention paid to results. In many cases, 100 factors are used. Subjectivity and prejudice are reduced. (i) It is a logical and to a certain extent an objective method of ranking and grading the jobs. Financial Accounting All rights reserved. Such information also reveals that workers are engaged in jobs requiring less skill and other qualities than they possess, thereby pointing to the possibility of making more efficient use of the plants labour. 3. It serves as a means to establish a rational wage and salary structure which will satisfy both the workers and the management. This cookie is set by GDPR Cookie Consent plugin. Rank the key job, factor by factor basis. Some methods of job evaluation are difficult to understand. The analyst continues until all factors are rated for the office manager job. Job evaluation has certain advantages over other techniques of pay fixation. ii. It is easily understood by the workers. I love when a hack helps me to recycle, and makes my life easier. Acceptance and Support of the Evaluation Procedure: The challenge of a job evaluation program lies in selecting supervisors and other managers to participate in job evaluation committees and in obtaining their commitment of time and attention to the process. It helps to increase productivity and consistency. The main steps in developing a point method of job evaluation system are as follows: identify the compensable factors, scale the factors, weight the factors, and apply and test the system. If a job offers bright prospects of rise, more people will be attracted in comparison to a job having no prospects of rise though both are equally rated by job evaluation process. It helps in merit-rating, selection, training, improvement of working conditions, work simplification and fixation of incentive pay for workers. It helps in maintaining harmonious relations between labour and management since it tends to eliminate wage inequalities within the organization and the industry. In todays corporate world the significance of job evaluation becomes very higher. Too many rating factors are used. Internet Based Benefits & Compensation Administration, Atchison, Thomas J., Belcher, David W., Thomsen, David J., Economic Research Institute. (iv) Job evaluation does not provide a complete answer to the wage problem. (vi) Sufficient acceptance of a job evaluation plan and general agreement on its essential features may not be achieved. Hence, it is very difficult to introduce it in smaller concerns. 4. For a point-factor based job ranking, the requirements, responsibilities, and other aspects of a job - not the position holder as a person - are evaluated with a set of standardized and generalized factors. Substantial differences exist between job factors and the factors emphasised in the market. It relies too much on internal standards and evaluation for fixing rates of wages. The points for each factor are summed to form a total point score for the job. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Digital Marketing What is an advantage of using the point-factor method in job evaluation? There are just too many details and specifications which you must be certain of when looking for one. No training is required to implement this system. (5) Too much reliance on internal standards and wage rates in industry or region are ignored: Job evaluation tends to be inflexible is so far as it does not give right weightage to rates prevalent in the industry or region as whole. . How Certain Job Evaluation Systems Are Failing to Stand Up In Equal Pay Claims. Each factor is then divided into levels or degrees which are then assigned points. 2. Generally, these key factors include mental requirements, physical requirements, skill requirements, working conditions, job responsibilities, supervisory responsibilities, etc. What is the major disadvantage of the factor comparison system of job evaluation? It does not produce results with scientific precision because it is very difficult to assess each and every factor accurately. 6) Subjective: Several factors are used in evaluating jobs but there is no standard list of factors to be considered. According to the Office of the Chief Human Resources Officer, point rating is an analytical, quantitative method of determining the relative values of jobs. The points rating system has many advantages over ranking and classification systems. Advantages and Disadvantages Although it is complex and may require the participation of management, once completed the point method of job evaluation is easy to use and is not likely to need frequent updating. It helps to improve industrial relations by reducing employee grievances arising out of wages. It plays a key role in establishing fair and standard pay differentials among jobs. The Competitive Market Analysis Method 6. It provides documentation and an audit trail. Some systems, often coming from the context of scientific management theories, create the illusion of objective measurement by using quantified jumps between levels. Advantage: Identifies the Top Performers The main advantage of the ranking appraisal method -. It measures job size, not post holders. Authorities suggest 5 to 20 members. It can also be applied to new jobs created in the organisation. But even so, point-factor methods are the most common forms of analytical job evaluation, with the International Labor Organizations Scheme of Geneva from 1950 a popular though out-dated example of point-factor-based job ranking. The cookies is used to store the user consent for the cookies in the category "Necessary". Playing your favorite game, Roblox, on Chromebook is quite achievable, but many users are only familiar with the Play Store method. It can be changed as per the specific needs of the organisation. d. Too wide a range of factors is assumed and too many degrees are defined. This is particularly so if the factors are of highly technical in nature. Discuss the advantages and disadvantages of the point method of job evaluation. Discuss the advantages and disadvantages of the point method of job evaluation. The evaluation may be achieved through the assignment of points or the use of some other systematic method for essential job requirements, such as skills, experience and responsibility. This system presumes that job of equal content will be equally attractive to the employees. 2. The list of factors is not a standard one. What is the major disadvantage of point method? Disadvantages of job evaluation are as follows: 1) Non-Scientific Technique: It is not a scientific but a systematic method of rewarding the job. It helps to increase productivity and consistency. Job evaluation information helps in selection, placement of employees. The assignment of weights to factors may be biased. 6-7. This multiplicity of factors creates confusion and so precise results cannot be obtained. It provides a better basis for assessing the relative worth of each job when compared to the non-analytical methods. The ranking method is one of the simplest methods of job evaluation. For example, he could define the experience factor into 5 levels with points distributed as follows: No experience (entry level) = 10 points 1-3 years experience = 30 points 4-6 years experience = 50 points 7-10 years experience = 75 points Over 10 years experience = 100 points, The job evaluation analyst continues defining and assigning points to all the compensable factors, distributing points across the levels as determined by the differences between the levels. Heavy Cream is in Aisle A31 of the Dairy section in Walmart. Please log in as a SHRM member. Why? This score determines the relative value of each job within an organization.