The next step in the job evaluation process is to select or design a method of evaluating jobs. Four basic methods have traditionally been said to describe most of the numerous job evaluation systems: ranking, classification, factor comparison, and the point plan.

The dimensions that distinguish these methods are (1) qualitative versus quantitative, (2) job-to-job versus job-to-standard comparison, and (3) consideration of total job versus separate factors that when summed make up the job.

These four methods as listed here, may be thought of as increasing in specificity of comparison.

Ranking involves creating a hierarchy of jobs by comparing jobs on a global factor that presumably combines all parts of the job. The classification method defines categories of jobs and slots jobs into these classes. Factor comparison involves job-to job comparisons on several specific factors. The point method compares jobs on rating scales of specific factors.

These four basic methods are pure types. In practice there are numerous combinations. Also, there are (as mentioned) many ready-made plans as well as numerous adaptations of these plans to specific organization needs. The following sections describe these basic plans and provide some examples.

Job Ranking

As its name implies, this method ranks the jobs in an organization from highest to lowest. It is the simplest of the job evaluation methods and the easiest to explain. Another advantage is that it usually takes less time and so is less expensive.

Its primary disadvantage is that its use of adjacent ranks suggests that there are equal differences between jobs, which is very unlikely. Other disadvantages stem from the way the method is often used. For example, ranking can be done without first securing good job descriptions.

This approach can succeed only if evaluators know all the jobs, which is virtually impossible in an organization with many jobs or with frequently changing jobs.

If the ranking method is used in accordance with the process described in the next section, it may yield the advantages cited and minimize the disadvantages. Developing a job ranking consists of the following steps:

1. Obtain Job Information. As we have noted, the first step in job evaluation is job analysis. Job descriptions are prepared, or secured if already available.

2. Select Raters and Jobs to Be Rated. Raters who will attempt to make unbiased judgments are selected and trained in the rating procedure. Less training is required for ranking than for other methods of job evaluation.

If job descriptions are available, it is unnecessary to select as raters only those people who know all the jobs well; this is probably impossible anyway except in very small organizations.

3. Select Compensable Factor(s). Although ranking is referred to as a "whole-job" approach, different raters may use different attributes to rank jobs. If judgments are to be comparable, compensable factors must be selected and defined. Even as broad a factor as job difficulty or importance is sufficient, so long as it is carefully defined in operational terms.

4. Rank Jobs. Although straight ranking is feasible for a limited number of jobs (20 or less), alternation ranking or paired comparison tends to produce more consistent results.

 Straight ranking involves ordering cards (one for each job) on which job titles or short job briefs have been written. In case more information is needed by raters, it is useful to have the actual job description at hand.

Alternation ranking provides raters with a form on which a list of job titles to be ranked are recorded at the left and an equal number of blanks appear at the right. The raters are asked to record at the top of the right-hand column the job title they adjudge the highest, and cross out that title in the list to the left. Then they record the lowest job in the bottom blank and the remaining jobs in between, crossing out the job titles from the left-hand list along the way. 

5. Combine Ratings. It is advisable to have several raters rank the jobs independently. Their rankings are then averaged, yielding a composite ranking that is sufficiently accurate.

Although job ranking is usually assumed to be applicable primarily to small organizations, it has been used in large firms as well. Computers make it possible to use paired comparison for any number of raters, jobs, and even factors. But the other disadvantages remain. .

Job Classification

The classification method involves defining a number of classes or grades of jobs and fitting jobs into them. It would be like sorting books among a series of carefully labeled shelves in a bookcase.

The primary task is to describe each of the classes so that no difficulty is experienced in fitting each job into its proper niche. Jobs are then classified by comparing each job with the class description provided.

Classification methods customarily employ a number of compensable factors. These typically emphasize the difficulty of the work but also include performance requirements. The terms used in grade descriptions to distinguish differing amounts of compensable factors necessarily require judgment. 

While the judgment involved in such distinctions may produce the flexibility just cited as an advantage, it may also encourage managers to use inflated language in job descriptions and job titles to manipulate the classification of jobs. Developing a job classification system requires these steps:

1. Obtain Job Information. If it is to function properly, classification, like all other job evaluation methods, must start with job analysis. A description is developed for each job. Sometimes key jobs are analyzed first and their descriptions used in developing grade descriptions; then the other jobs are analyzed and graded.

2. Select Compensable Factors. Job descriptions are reviewed to distill factors that distinguish jobs at different levels. This is often done by selecting key jobs at various levels of the organization, ranking them, and seeking the factors that distinguish them.

3. Determine the Number of Classes. The number of classes selected depends upon tradition, job diversity, and the promotion policies of the organization. Organizations tend to follow similar organizations in this decision. Those favoring more classes argue that more grades mean more promotions and employees approve of this.

4. Develop Class Descriptions. This is a matter of defining classes in sufficient detail to permit raters to readily slot jobs. Usually this is done by describing levels of compensable factors that apply to the jobs in a class. Often, titles of benchmark jobs are used as examples of jobs that fall into a grade. Writing grade descriptions is more difficult if one set of classes is developed for the entire organization, than if separate class hierarchies are developed for different occupational groups.

6. Classify Jobs. The committee charged with writing grade descriptions is often also assigned the task of classifying jobs. This involves comparing job descriptions with class descriptions. The result is a series of classes, each containing a number of jobs that are similar to one another. The jobs in each class are considered to be sufficiently similar to have the same pay. Jobs in other classes are considered dissimilar enough to have different pay.

Factor Comparison 

This method, as the name implies, compares jobs on several factors to obtain a numerical value for each job and to arrive at a job structure. Thus it may be classified as a quantitative method.

Factor comparison itself is not widely used: it probably represents less than 10 percent of the installations of job evaluation plans. But the concepts on which it is based are incorporated in numerous job evaluation plans, including the one that is probably used the most, the Hay Plan.

Factor comparison involves judging which jobs contain more of certain compensable factors. Jobs are compared with each other (as in the ranking method), but on one factor at a time.

 The judgments permit construction of a comparison scale of key jobs against which other jobs may be compared. The compensable factors used are usually (1) mental requirements, (2) physical requirements, (3) skill requirements, (4) responsibility, and (5) working conditions.

These are considered to be universal factors found in all jobs. This means that one job-comparison scale for all jobs in the organization may be constructed, and this practice is often followed upon installation of factor comparison. However, separate job-comparison scales can be developed for different functional groups, and other factors can be employed.

Factor-comparison concepts employed in other job evaluation plans should be noted. Job-ranking plans that use two or more compensable factors and weighting them differently are essentially factor-comparison plans. The practice of assigning factor weights statistically on the basis of market rates and the ranking of jobs on the factors employs a factor-comparison concept.

Point - Factor Method

The point-factor method, or point plan, involves rating each job on several compensable factors and adding the scores on each factor to obtain a point total for a job. A carefully worded rating scale is constructed for each compensable factor.

This rating scale includes a definition of the factor, several divisions called degrees (also carefully defined), and a point score for each degree. The rating scales may be thought of as a set of rulers used to measure jobs.

Designing a point plan is complex, but once designed the plan is relatively simple to understand and use. Numerous ready-made plans developed by consultants and associations exist. Existing plans are often modified to fit the organization.