02
This chapter starts by describing formal approaches to job evaluation, listing the different kinds of analytical and non-analytical job evaluation schemes and the use of tailor-made, ready-made and hybrid schemes. Reference is also made to some of the off-the-shelf ‘proprietary’ schemes offered by management consultants. The use of non-formal methods of job evaluation is then discussed and the chapter ends with a description of computer-aided job evaluation.
Formal approaches to job evaluation
A formal approach to job evaluation involves the development and use of a structured scheme that provides for a systematic approach to be made to the two basic job evaluation activities, which are to:
1. establish the content of jobs through job analysis (see Chapter 6);
2. decide through an analytical or non-analytical system on the size of a job as represented by a points score, or the place of a job in a hierarchy of grades or levels, or the position of a job in a rank order.
The design and operation of a scheme usually involve the analysis and description of benchmark jobs – typical jobs that represent the different occupations and levels of work in an organization and can be used as points of reference when designing a scheme and with which other jobs can be compared and evaluated.
A scheme can be analytical or non-analytical.
Analytical job evaluation schemes
Analytical job evaluation schemes are based on a process of breaking whole jobs down into a number of defined factors. The advantages of an analytical approach are that first, evaluators have to consider each of the characteristics of the job separately before forming a conclusion about its relative value and second, they are provided with defined yardsticks or guidelines which help to increase the objectivity and consistency of judgements. It can also provide a defence against an equal pay claim.
In point-factor schemes jobs are analysed to establish the extent to which each factor is present and then scored by reference to a graduated scale of points attached to each factor in a set of factors. In analytical matching schemes jobs are allocated to grade profiles (job-to-grade matching) or compared to benchmark job profiles (job-to-job matching) analysed under the same factor headings by identifying the grade or job profile which most closely matches that of the job to be evaluated.
In the UK, point-factor rating and analytical matching as described in Chapters 7 and 8 are the most commonly used schemes. Analytical levelling schemes (levelling is analogous to job-to-grade matching – see Chapter 9) in which the levels of work in an organization are defined in terms of a number of factors, and jobs are slotted into those levels by reference to those factors, are becoming more popular. The other two less-used analytical methods are factor comparison and graduated factor comparison as described below.
Factor comparison
The original factor comparison method compared jobs factor by factor using a scale of money values to provide a direct indication of the rate for the job. It originated in the United States but was not adopted much in the UK. A revised version is available in the United States, and resembles a conventional point-factor scheme except that there are no level definitions. Jobs are ranked and placed on a scale for each factor. The points values for each factor according to the job’s position are added to produce a total score.
Graduated factor comparison
Graduated factor comparison compares jobs factor by factor with a graduated scale. The scale may have only three value levels – for example lower, equal, higher – and no factor scores are used. This is a method often used by the independent experts engaged by Employment Tribunals to advise on an equal pay claim. Their job is simply to compare one job with one or two others, not to review internal relativities over the whole spectrum of jobs in order to produce a rank order. Independent experts may score their judgements of comparative levels, in which case graduated factor comparison resembles the point-factor method except that the number of levels and range of scores are limited, and the factors may not be weighted.
Graduated factor comparison can be used within organizations if there is a problem of comparable worth and no other analytical scheme is available. It can also be used in a benchmarking exercise to assess relativities across different categories of employees in the absence of a common analytical job evaluation scheme as long as the factors used are common to all the job categories under consideration.
Non-analytical job evaluation schemes
Non-analytical job evaluation schemes enable whole jobs to be compared in order to place them in a grade or a rank order – they are not analysed by reference to their elements or factors. A non-analytical scheme may stand alone or be used to help in the development of an analytical scheme. For example, the paired comparison technique described later can produce a rank order of jobs that can be used to test the outcomes of an evaluation using an analytical scheme. It is therefore helpful to know how non-analytical schemes function even if they are not used as the main technique.
Non-analytical schemes operate on a job-to-grade basis in which judgements are made by comparing a whole job with a defined hierarchy of job grades (non-analytical matching or job classification) – this involves matching a job description to a grade description. Alternatively, they may function on a job-to-job basis in which a job is compared with another job to decide whether it should be valued more, or less, or the same (ranking and ‘internal benchmarking’ processes).
Non-analytical schemes are relatively simple but rely on overall and potentially more subjective judgements than analytical schemes. Such judgements will not be guided by a factor plan and do not take account of the complexity of jobs. There is a danger therefore of leaping to conclusions about job values based on a priori assumptions which could be prejudiced. For this reason, non-analytical schemes do not provide a defence in a UK equal pay case.
There are four main types of non-analytical schemes: non-analytical matching or job classification, internal benchmarking, job ranking, and paired comparison (a statistical version of ranking). In addition, a levelling approach in which level definitions are not analysed into factors can be regarded as a non-analytical scheme.
Non-analytical matching (job classification)
This approach, traditionally referred to as job classification, is a job-to-grade procedure in which a ‘whole’ job description, ie one not analysed into factors, is compared with the grade definitions in a grade structure to establish the grade with which the job most closely corresponds. This process is known as matching or job slotting. The grade definitions may refer to such job characteristics as skill, decision making and responsibility but these are not treated separately as in analytical matching.
Internal benchmarking
Internal benchmarking is a job-to-job, non-analytical matching procedure in which the job under review is compared with any internal job which is believed to be properly graded and paid (an internal benchmark) and then placed into the same grade as that job. The comparison is made on a whole job basis without analysing the jobs factor by factor. This is what people often do intuitively when they are deciding on the value of jobs, although it is not usually dignified in job evaluation circles as a formal method of job evaluation. It can be classified as a formal method if there are specific procedures for preparing and setting out role profiles and for comparing profiles for the role to be evaluated with standard benchmark role profiles.
Job ranking
Whole-job ranking is the most primitive form of job evaluation. The process involves comparing whole jobs with one another and arranging them in order of their perceived value to the organization. In a sense, all evaluation schemes are ranking exercises because they place jobs in a hierarchy. The difference between simple ranking and analytical methods such as point-factor rating is that job ranking does not attempt to quantify judgements. Instead, whole jobs are compared – they are not broken down into factors or elements although, explicitly or implicitly, the comparison may be based on some generalized concept such as the level of responsibility. Job ranking or paired comparison ranking as described below is sometimes used as a check on the rank order obtained by point-factor rating.
Paired comparison ranking
Paired comparison ranking is a statistical technique that is used to provide a more sophisticated method of whole-job ranking. It is based on the assumption that it is always easier to compare one job with another than to consider a number of jobs and attempt to build up a rank order by multiple comparisons.
The technique requires the comparison of each job as a whole separately with every other job. If a job is considered to be of a higher value than the one with which it is being compared it receives two points; if it is thought to be equally important, it receives one point; if it is regarded as less important, no points are awarded. The scores are added for each job and a rank order is obtained.
Paired comparisons can be done factor by factor and in this case can be classified as analytical. A simplified example of a paired comparison ranking is shown in Table 2.1.
TABLE 2.1 A paired comparison
|
Job reference |
A |
B |
C |
D |
E |
F |
Total score |
Ranking |
|
A |
− |
0 |
1 |
0 |
1 |
0 |
2 |
5= |
|
B |
2 |
− |
2 |
2 |
2 |
0 |
8 |
2 |
|
C |
1 |
0 |
− |
1 |
1 |
0 |
3 |
4 |
|
D |
2 |
0 |
1 |
− |
2 |
0 |
5 |
3 |
|
E |
1 |
0 |
1 |
0 |
− |
0 |
2 |
5= |
|
F |
2 |
2 |
2 |
2 |
2 |
− |
10 |
1 |
The advantage of paired comparison ranking over normal ranking is that it is easier to compare one job with another rather than having to make multiple comparisons. But it cannot overcome the fundamental objections to any form of whole-job ranking – that no defined standards for judging relative worth are provided, and it is not an acceptable method of assessing equal value or comparable worth. There is also a limit to the number of jobs that can be compared using this method – to evaluate 50 jobs requires 1,225 comparisons. Paired comparisons are occasionally used analytically to compare jobs on a factor-by-factor basis.
Combined approaches
Organizations sometimes combine approaches and there are three ways of doing so:
1. Point-factor rating/analytical matching – point-factor rating or an analytical proprietary brand is used to evaluate benchmark posts as the basis for designing a grade structure in which grade profiles are defined analytically, and the remaining posts are graded by analytical matching. But a point-factor scheme can underpin a matching scheme by being invoked when a satisfactory match cannot be obtained. This is becoming a popular approach. It is used in the NHS, and the Hay Group job family modelling technique as used in a number of universities and elsewhere is often supported by their Guide Chart – Profile method of evaluation (in effect, a points scheme). As defined by Hay, a job family describes a number of different roles which are engaged in similar work and a job family model considers how many levels of that type of work there are and defines them in a way which clearly differentiates the levels. Jobs are evaluated by slotting them into the level in their job family that provides the closest match.
2. Point-factor rating/non-analytical matching – point-factor rating or an analytical proprietary brand is used to evaluate benchmark posts as the basis for designing a grade structure in which grades are defined non-analytically and the remaining posts are graded by slotting them into grades on a whole-job basis.
3. Formal job evaluation/market rate comparison – formal job evaluation is supplemented by information on market rates when developing pay structures, deciding on market supplements (additions to the base rate to reflect market rates) and fixing individual rates of pay.
The first two types of combination are used when it is believed that time will be saved by not extending benchmark point-factor rating to a large number of other posts.
Ready-made and tailor-made schemes
Job evaluation schemes can be developed entirely within an organization as described in Chapter 5. But it is common practice to buy them ‘ready-made’ or ‘off-the-shelf’ from a firm of management consultants – these are sometimes called a ‘proprietary brand’. A number of consultancies offer such schemes. The Hay Group’s Guide Chart-Profile method is the most widely used one. Other consultancies providing ready-made schemes include Aon Hewitt, Mercer, PricewaterhouseCoopers, SHL Group and Willis Towers Watson. Management consultants can also be engaged to help in the development of a tailor-made scheme in an organization, or they may modify (tailor) their standard scheme to suit the particular requirements of their clients.
Public sector schemes, often developed by consultancies, include:
· Agenda for Change job evaluation scheme (NHS);
· GLPC (Greater London Provincial Council);
· HERA (Higher Education Role Analysis);
· JEGS (Civil Service Job Evaluation and Grading Scheme);
· National Joint Council (NJC) for Local Government Services.
Informal approaches to job evaluation
Informal job evaluation does not use a structured approach. It depends on assumptions about relative internal value often based on matching one job with another in broad terms without always having the information provided by job descriptions for the job under consideration or for the job with which it is being compared. It is also likely to rely on market rate comparisons that may be crude generalizations formed from unreliable advertisements. The risk is that inequitable decisions will be made on the basis of subjective judgements that are not supported by any systematically assembled evidence.
There are, however, degrees of informality. A semi-formal approach might require some firm evidence to support a market pricing decision and the use of job descriptions to provide greater accuracy to the matching process through internal benchmarking.
Computer-aided job evaluation
Computer-aided job evaluation uses computer software to convert information about jobs into a job evaluation score or grade. It is generally underpinned by a conventional point-factor scheme. The ‘proprietary brands’ offered by consultants are often computer-aided. Computers may be used simply to maintain a database recording evaluations and their rationale. In the design stage they can provide guidance on weighting factors through multiple regression analysis, although this technique has been largely discredited and is little used now.
Methodology
The software used in a fully computer-aided scheme essentially replicates in digital form the thought processes followed by evaluators when conducting a ‘manual’ evaluation. It is based on defined evaluation decision rules built into the system shell. The software typically provides a facility for consistency checks by, for example, highlighting scoring differences between the job being evaluated and other benchmark jobs.
The two types of computer-aided evaluation are:
1. Schemes in which the job analysis data is either entered directly into the computer or transferred to it from a paper questionnaire. The computer software applies pre-determined rules to convert the data into scores for each factor and produce a total score. This is the most common approach.
2. Interactive computer-aided schemes in which the job holder and his or her manager sit in front of a PC and are presented with a series of logically interrelated questions, the answers to which lead to a score for each of the built-in factors in turn and a total score.
The case for computer-aided job evaluation
In a point-factor scheme that is not computer-aided, jobs are often evaluated by a panel that may include a broadly representative group of staff as well as line managers and one or more members of the HR department. The panel will have been trained in interpreting the factor plan and applying this in the evaluation of the job descriptions or questionnaires provided. It studies the job information and, by relating this to the factor level definitions and panel decisions on previous jobs, debates and agrees the level (and hence the score) that should be allocated for each factor. This is a well-understood process that has been tried and tested over more than 50 years and, properly applied, is generally accepted as a good approach by all concerned.
The problem with the panel approach is chiefly the way it is applied. The most common failings or disadvantages are:
· Inconsistent judgements – although the initial panel may be well trained, panel membership changes and, over time, the interpretation of the factor plan may also change. The presence or absence of a particularly strong-minded member may influence panel decisions.
· Inadequate record of decisions – each allocated factor level will, of necessity, be recorded but panels do not always conform to good practice by maintaining a record of how each decision was reached (a rationale). If an appeal is lodged, it can be difficult to assess whether or not the original panel took account of whatever evidence is presented in support of the appeal. The Gauge system of job evaluation helps to overcome this difficulty by recording the decision-making process.
· Staff input required – a panel of six or seven people (a typical size) may take an hour to evaluate each job if a traditional job-by-job approach is used. Up to 10 person hours could thus be spent evaluating each job. This is a substantial cost for any organization.
· Time taken to complete the process – assembling a quorum of trained panel members may take several weeks and, if their evaluations are subject to review by some higher-level review team (to minimize the risk of subsequent appeals) it can take two or three months to complete the whole process.
Incorporating computer-aided job evaluation as part of the process from the outset helps to overcome these problems. Depending on the type of scheme it can achieve greater consistency – the same input information gives the same output result. It can also increase the speed of evaluations, reduce the resources required and provide facilities for sorting, analysing, reporting on the input information and system outputs and record keeping (database).
However, it is worth remembering that the system can only support the job evaluation process by using the rules and algorithms that have been built into it. Human judgement is still required to design the scheme in the first place and to ensure that accurate job information is entered. In practice there is no such thing as ‘computerized’ job evaluation – only computer-aided evaluation.
The capabilities that can be found across a range of software packages are summarized in Table 2.2 below.
TABLE 2.2 Software job evaluation applications
|
Support to scheme design |
|
|
Development of weightings/scoring |
Paired comparison to support development of weightings. Use of software package to develop weighting, eg SSPS for multiple regression analyses (often manipulated by consultant as part of development process – not part of client software package). |
|
Data management |
|
|
Record keeping |
Record of individual evaluation responses. Maintaining library of benchmark roles. |
|
Data entry |
Direct import of job questionnaires completed manually. Direct online responses to questionnaire by job holder or analyst; might be accompanied by guidance and the ability to refer to similar jobs (sometimes called an ‘expert’ system). Direct online responses that are tailored to responses already entered (an ‘interactive’ system). |
|
Job descriptions/profiles |
Ability to write job descriptions using a standard template, or evaluation responses generate a profile that is based on an adapted form of wording from the evaluation scheme. |
|
Progress checking |
System records status of all scores, eg provisional, final and multiple scores for same job where it is evaluated separately by more than one evaluator prior to evaluation team review. |
|
Analysis and reporting |
|
|
Scoring |
Calculation of evaluation scores using pre-determined scoring/weighting – either built into standard package or agreed with client and built into software (usually on basis that client does not have access to the scoring model to make any changes). Sophisticated scoring capability including ability to build relationships between responses to separate questions. |
|
Tailored reporting |
Rank order listings either by total job score or factor by factor, either in order of calculated points score or by factor level entered (eg A, B, C etc). Analysis of evaluation results by function, gender or other pre-determined elements. Inter-site/division comparisons. Ability to generate customized reports. |
|
Quality review |
Quality checking of data entry for missing information. Identification of inconsistent scores, eg outside of pre-defined parameters, or unusual relativities between jobs (eg manager scores less than subordinate on decision making). |
|
Additional applications linked to job evaluation |
|
|
Pay modelling |
Modelling grades salaries and costs of new pay structure (typically includes scattergrams, lines of best fit). |
|
Equal pay review |
Analysis by gender, disability, race or age for pay elements of total package, allowances and other benefits. |
|
Competencies |
Provides a link between job requirements and individual performance expectations and required behaviours. |
|
Survey link |
Direct link to consultants’ pay database, based on evaluation points or bandings. |
The software platforms have moved on considerably over recent years. Whereas initial computer-aided job evaluation schemes used to require the installation of a software package onto a stand-alone PC or server, most consultancy firms offering a computer-aided scheme now provide for internet, intranet or PC access. The advantage of web-enabled systems is that the software is updated automatically, so there is no need to have to install the latest upgrade on-site.
A web-enabled or intranet system means that organizations can devolve the administration of their scheme around the organization, or where relevant, around the world. Where this is the case, the package will invariably provide for a range of security settings. This will typically allow for some locations or users to have read-only access, others will be able to enter and amend data for the jobs under their jurisdiction only, whereas at the highest level the system administrator will have complete access to all records in the system.
The case against computer-aided job evaluation
For some organizations the full approach is too expensive and elaborate a process for them to be bothered with. Others do not want to abandon the involvement of employees and their representatives in the traditional panel approach. There is also the problem of transparency in some applications. This is sometimes called ‘the black box effect’ – those concerned have difficulty in understanding the logic that converts the input information to a factor level score. Interactive systems such as those offered by Pilat Consultants (Gauge) aim to overcome this difficulty.
It is perhaps for these reasons that only 39 per cent of the respondents to the 2017 e-reward survey had computer-aided schemes although almost all of them used computers to maintain job evaluation records.
Use of schemes
The use of schemes by the respondents to the 2017 e-reward survey of job evaluation was as follows:
· point-factor rating – 68 per cent;
· levelling – 26 per cent;
· analytical job matching – 25 per cent;
· job classification –17 per cent;
· non-analytical job matching –10 per cent.
A number of respondents used more than one scheme, for example point-factor rating and analytical job matching.
References
Emerson, S M (1991) Job evaluation: a barrier to excellence, Compensation & Benefits Review, January–February, pp 4–17
e-reward (2017) Job Evaluation Survey, Stockport, e-reward
Plachy, R J (1987) The point-factor job evaluation scheme: a step by step guide, part 1, Compensation & Benefits Review, pp 9–24