Job Evaluation by Factor Comparison

Job evaluation by factor comparison

1. Overview of factor comparison:

Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors.

These factors include mental effort, physical effort, skill needed, supervisory responsibility, working conditions and other relevant factors (for instance, know-how, problem solving abilities, accountability, etc.).

Pay will be assigned in this method by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs may be divided among the factors weighed by importance (the most important factor, for instance, mental effort, receives the highest weight).

2. Advantages of factor comparison:

• Relatively easy to use once it’s set up.
• Customized to the organization.
• Results in ranking of jobs and a specific dollar value for each job, based on allocating part of the job’s total wage to each factor.

3. Disadvantages of factor comparison:

• Hard to set up.
• Not easily explained to employees.
• Using dollar values may bias evaluators by assigning more money to a factor than a job is worth.
• Every time wage rates change, the schedule becomes obsolete.

4. Process of factor comparison:

• Select key jobs (say 15 to 20), representing wage/salary levels across the organization. The selected jobs must represent as many departments as possible.

• Find the factors in terms of which the jobs are evaluated (such as skill, mental effort, responsibility, physical effort, working conditions, etc.).

• Rank the selected jobs under each factor (by each and every member of the job evaluation committee) independently.

• Assign money value to each factor and determine the wage rates for each key job.

• The wage rate for a job is apportioned along the identified factors.

• All other jobs are compared with the list of key jobs and wage rates are determined.

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