The Point System depends upon (1) the factors used, (2) the weightages given and (3) the degree defined. The job evaluation exercise, by the Point System, can be more reliable and truthful if:
1. The factors are so chosen that they are common to all the jobs and yet bring out the differences between one job and the other. There should not be any overlaps between the factors; each factor should be distinct from the other. Moreover, the analysis should not omit any relevant factors i.e. the factors should be comprehensive.
2. Weightages for factors are a disciplined, group judgment.
3. The degrees or levels within the factors are defined clearly.
Factor Comparison System:
This method combines the features of the Ranking System and Points System. The steps involved are as follows:
1. The ‘factors’ are selected and defined as in the Points System but, there are no degrees.
2. Few ‘key’ jobs (or Benchmark Jobs) are selected and ranked under each factor. A ‘key’ job is one which has no dispute regarding the wage rates. Generally, 10-15 key jobs will suffice.
3. The average wage rate of each key job is now converted into points, by multiplying the wage rate by an arbitrary number (in order to mask the wage rate).
4. For a key job, the points so obtained are allocated under each factor according to its importance for the job. Do this for all the jobs. While doing this do not bother about the ‘ranks’ given in step (2).
5. Based on the allocated points, derive new rankings for the jobs under each factor. Compare the new ranks with the original ranks. Wherever they do not tally, remove those jobs from the list of key jobs.
6. Repeat this process till there is no disagreement between the original and new rankings.
7. Use the key jobs positioned under each factor for comparing and positioning the remaining jobs under each factor. The total points for a job can be easily arrived at by adding the point values for the job under each factor. The points can be reconverted to the pay rate or used to determine the overall hierarchy of jobs.
Example: Let A, B, C, D, E, F and G be the key jobs selected. If the average wage rates for them are Rs 10, 14, 16, 11, 20, 13 and 16 respectively, we convert these into point values by multiplying by an arbitrary number, say 23.
A= 10×23 =230 points
B= 14×23=322 points
C= 16 x 23 =368 points
D = 11x 23= 253 points
E = 20 x23= 460 points
F= 13 x 23 = 299 points
G= 16 x 23 = 368 points
The ranking of the jobs is done under each factor. This is the original ranking.
Next, for a job the point values are distributed under each factor. For Key Job A our distribution would be 60, 85, 25, 40 and 20 points under Mental Requirement, Skills, Working Conditions, Responsibility and Physical Effort factors, respectively. This is our assessment of the relative importance of each factor for Job A. We do this for all the key jobs. Based on the points noted for each key job under a factor, compute the new rankings under that factor. This is followed for all factors.
The same could be expressed in the form of a calibrated scale for each factor. In actual practice, depending upon the total number of jobs being evaluated a few more supplementary jobs may be added to the key jobs so that the scales under each factor are clear and spread out.
The other jobs can then be positioned in the scale under each factor by comparing with the key jobs. It may be mentioned that the key jobs, in addition to being non-disputable, should preferably cover as wide a range of points as possible under each factor. They should include in themselves a wide range of existing pay scales including the highest and lowest paid jobs.
Merits and Demerits of Factors Comparison System:
One of the advantages of the Factor Comparison system is that the evaluation is based on benchmark or key jobs about which there is no dispute. Everything is in comparison to these key jobs which constitute the steps of the rating scales. Moreover, because of the very same fact, the rating scales are tailor made so to say, for an organization.
But what leaves a ring of suspicion about this system is its feature of using monetary points for arriving at these ratings scales. Due to this, many feel that this system may perpetuate existing inequalities thus negating the purpose of the job evaluation.