Job Evaluation Using Point Factor

Navigate through the realm of job evaluation by delving into the effective Point Factor Method. Discover how this method revolutionizes workplace productivity and enhances human resource management.

Introduction

Job evaluation is a systematic method for determining the relative worth or value of a job or position within the organization. This process helps to ensure that roles are appropriately compensated and that there is a fair and consistent approach to remuneration across the board. The job evaluation process includes:

• Selecting a job evaluation method that best fits the organization’s needs and culture.
• Assessing each role based on predetermined criteria, such as skill level, responsibility, and working conditions, to determine its relative value within the organization.
• Comparing the results of the evaluation with market data and industry benchmarks to ensure competitive compensation.
• Reviewing and adjusting the evaluation results as necessary to address any discrepancies or inconsistencies.

There’s more to the work environment than meets the eye. While at first glance it might seem like a straightforward exercise of assigning tasks and expecting results, the backdrop is embellished with countless management strategies. One such strategy that’s been making waves in the professional landscape is the Job Evaluation using Point Factor Method.

Job Evaluation using Point Factor Method: A Primer

So, what’s this buzz all about? Job evaluation using Point Factor Method refers to a systematic approach used to ascertain the relative worth of a job within an organization. Now, that’s quite a mouthful, but let’s break it down a bit. The method essentially assigns numerical points to different job components, hence quantifying the value of a job role.

Deconstructing the Point Factor Method

At its core, the Point Factor Method operates on four major factors: skills, responsibilities, effort, and working conditions. It’s like assembling a jigsaw puzzle, where every piece contributes to the complete picture, or in this case, a job role’s overall worth.

Understanding the Four Major Factors

Ever wondered how to weigh up a job’s value? The Point Factor Method has a neat answer to this. Let’s dive into each of these factors for a better understanding.

Skills

“Skills pay the bills,” they say, and they’re not wrong. The level of skills required for a job often dictates its worth. Skills encompass education, experience, initiative, and ingenuity. The more complex and diverse these are, the higher the points scored in a job evaluation.

Responsibilities

Responsibilities are the bread and butter of a job role. They encompass the duties and tasks that the job requires. From managing a team to ensuring a project’s success, responsibilities are often directly proportional to a job’s evaluation score.

Effort

No job is a cakewalk. Every role requires a degree of physical and mental effort. The higher the effort involved in executing a task, the higher the score it gets in the Point Factor Method.

Working Conditions

Last but not least, working conditions play a significant role in job evaluation. This factor takes into account the environment and potential hazards that a job might entail. Tougher conditions naturally score higher points.

Conducting Job Evaluation using Point Factor Method

Conducting job evaluation using this method can seem daunting. But with a step-by-step approach, it’s as easy as pie. Let’s break down the process.

1. Setting the Objectives

Begin by defining the objectives for your job evaluation exercise. The primary objective should be to create a fair and equitable compensation structure that takes into consideration your organization’s job analysis and job descriptions.

2. Selecting the Method

The next step is to choose the job evaluation method. In our case, we’ve opted for the Point Factor Method, an approach that assigns points to various job factors. This method ensures a more systematic, objective, and consistent job evaluation.

3. Identifying Key Job Factors

Take the time to identify key job factors that will be crucial in the Point Factor Method. These can include elements like education, experience, functional expertise, behavioral competencies, supervision, and financial impact.

Let’s take an example to highlight how this works. For a given position of Chief HR Officer within an organisation, consider choosing the following 5 factors critical to the role:

Education: Each point represents a level of formal education required for the job role, including degrees, certifications, and other relevant qualifications.

Overall Experience: This scale measures the cumulative knowledge, skills, and abilities an individual has gained through work and related experiences.

Supervision: This scale measures the extent of supervisory responsibility in the job role, including the size and complexity of the team/s being managed

Decision Making: This scale measures decision-making authority and autonomy that the job role has.

Business Impact: This scale measures the degree of business responsibility or impact on the organization that the job role has.

Assigning Points to Factors

Next up, assign points to each of the identified factors. This process can involve a scale of your choice, such as a Likert scale ranging from 1 to 10 as seen above. Now this might require some amount of calculations, so please pay attention to what follows:

Now for the following factors, the first step is to assign weightages to each factor based on the relative importance of that factor to the overall scheme of things. For example, in our case, we can assume

• Education: Weightage of 60%
• Experience: Weightage of 70%
• Supervision: Weightage of 80%
• Decision Making: Weightage of 90%
• Business Impact: Weightage of 100%

Ergo, for your Likert Scale of 1 to 10, we need to now appropriate these weightages across the scale. The table below explains how the weightages might be distributed. Since Education weights 60%, it gains a 0.6 score under the Likert Scale of 1, it gains a score of 1.2 (60% x 2) under the Likert Scale of 2, and so on. once you are done calculating this for all factors against their weightages, you are now ready with your Point Factor Table.

Evaluating Jobs

With the framework in place, you’re ready to evaluate the jobs. Use detailed information from job descriptions, interviews, or questionnaires to assign points to each job based on its requirements for each factor.

Point-factor based job evaluation is a quantitative form of job evaluation that uses defined factors and levels within them. Job requirements are compared to the definitions of the factor levels, with corresponding points assigned to the job based on the relevant level. The job scores are added to determine a total and are used to create a job grading. Put simply, the value of a job is judged based on the requirements of the core duties, tasks and generally KRAs/KPIs involved.

For a point-factor based job evaluation, the requirements, responsibilities, and other aspects of a job – not the position holder as a person – are evaluated with a set of standardized and generalized factors. And, with the factors consisting of several levels, points are assigned to each level. To do this, the requirements of the job are compared with the factor-level explanation to determine which is the best fit. The total score shows the value of the position. Once the total score is calculated, the jobs can be well evaluated.

Once the scales have been defined, you make go ahead and consider, basis the Job Analysis (Job Description + Job Specifications), the KRAs/KPIs and Critical Competencies (Functional & Behavioral), what should the factor for that job be rated at. For example, one might argue the following choices for the CHRO of a relatively large organisation. Each of the grey boxes denotes the point factor choice for that position.

Calculating Total Points

Now, add up the points for all factors to determine the total points for the job. This total will help establish the relative worth of the job role (CHRO) within your organization.

When you total them all (Education=4.8 + Experience = 4.9 + Supervision = 5.6 + Decision Making = 6.3 + Business Impact = 8), you will get a Total Point Score of 29.6, which in fact is the total value of the Job of the CHRO in points.

Benchmarking with External Pay Scales

Lastly, link the total points of each job to external pay scales. This can be done by assigning a base salary and incrementing it based on the pay difference per interval.

For example, hypothetically, for the job of a CHRO in the relevant industry you have acquired the external benchmark range of $50,000 (min) – $150,000 (max). By the way, this data is available through many salary benchmarking service providers.

Final Calculation of Job Worth

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