There are several ways to actually categorize jobs. One is to write class or grade descriptions (similar to job description) and place jobs into classes or grades based on how well they fit these descriptions. Another is to draw up a set of compensable factor based rules for each class (for instance, how much independent judgment, skill, physical effort, and so on, does the class of jobs require?) Then categorize the jobs according to these rules.
Probably the most popular procedure is to choose compensable factors and then development class of grade description for each class or grade in terms of amount or level of the compensable factor (s) in those jobs. The federal classification system in the United States, for example, employs the following compensable factors: (1) difficulty and variety of work, (2) supervision received and exercised, (3) judgment exercised, (4) originality required, (5) nature and purpose of interpersonal work relationship, (6) responsibility, (7) experience, and (8) knowledge required. Based on these compensable factors, raters write a grade definition like that. This one shows one grade description (GS-7) for the federal government’s pay grade system. Then the evaluation committees review all job descriptions and slots each job into its appropriate grade, by comparing each job description to the rules in each grade description. For instance, the federal government system classifies the position automotive mechanic; welder, electrician and machinist in grade GS – 10.
The classification method has several advantages. The main one is that most employers usually end up grouping jobs into classes any way, regardless of the evaluation method they use. They do this to avoid having to work with and price an unmanageable number of jobs. Of course the job classification automatically groups the employer’s jobs into classes. The disadvantages are that it is difficult to write the class or grade descriptions, and considerable judgment is required to apply them. Yet many employers (including the US government) use this method with success.
Job Evaluation Methods:
Point Method: The point method is a more quantitative technique. It involves identifying (1) several compensable factors, each having several degrees, as well as (2) the degree to which each of these factors is present in the job. Assume there are five degrees of responsibility a job could contain. Further assume you assign a different number of points the each degree of each factor. Once the evaluation committee determines the degree to which each compensable actor (like ‘responsibility and effort’) is present in the job, it can calculate a total point value for the job by adding up the corresponding points for each factor. The result is a quantitative point rating for each job. The point method is apparently the most widely used job evaluation method.
Job Evaluation Methods:
Factor Comparison: The factor comparison method is actually a refinement of the ranking method. With the ranking method, you generally look at each job as an entity and rank the jobs on some overall factor like job difficulty. With the factor comparison method, you might first rank jobs in terms of the compensable factor “skill”. Then rank them according to their mental requirements and so forth. Then combine the rankings for each job into an overall numerical rating for the job. This is widely used method.
Computerized Job Evaluations: Using quantitative job evaluation methods such as the point or factor comparison plans can be time-consuming. Accumulating the information about how much of each compensable factor the job contains traditionally involves a tedious process in which evaluation committees debate the level of each compensable factor in a job. They then write down their consensus judgments and manually compute each job’s point values.