1. CONCEPT, PROCEDURES, ADVANTAGES & DISADVANTAGES Point Method of Job Evaluation By: Arthur Gonzaga

2. Point Rating  Also called Point Factor or Point Rating, An analytical method of job evaluation (devised by Lott 1924) which is based on breaking down Jobs into factors or key elements  The method has three (3) characteristics: There is a distinct set of compensable factors with sub factor components Compensable factors and sub-factor components are given weights depending on their relative importance to the organization Factor degrees are numerically scaled

3. Point Rating  Jobs are evaluated factor by factor and scored according to the factor degree levels which then the total points represent the relative value of Jobs to the organization.  These will be used then to locate the jobs in the pay structure

4. Point Rating Process 1.Identification of Compensable factors Compensable factors represent what the organization values Basically these are desired factors that the organization perceives as aids to attain its goals and targets The sum total of the variations in the compensable factors represents much how the job is worth in terms of monetary value Example of Compensable Factors 4 Major components also called as universal compensable factors a.Skill – Job knowledge, experience, and special training required on the job b.Responsibility – Degree of accountability, initiative and authority required on the job c.Effort – the mental or physical effort required d.Working Conditions – the physical surroundings and hazards involved in the performance of the job Compensable Factors must be: 1.Important and Relevant to the jobs to be evaluated 2.Measurable 3.Easy to rate 4.Mutually exclusive – no overlapping with other factors 5.Acceptable to both employer and affected job holder and meet their standards 6.Universal – apply to all jobs being evaluated 7.Should not more than 15 CF

5. Point Rating Process 2. Deciding the relative weight of each factor. A percentage value must be assigned to each of the chosen compensable factors and sub-factors The total must equal 100% Example a.Skill or Knowledge 35% b.Responsibility 25% c.Effort30% d.Working Conditions10% TOTAL100%

6. Point Rating Process 3. Defining each compensable factor, sub-factor and their various degree levels. The number of degrees need not be uniform. Use only enough to differentiate the jobs being rated. Education Degree 1 – High School graduate Degree 2 – Some college or vocational degree with licensure Degree 3 – College graduate Degree 4 – College degree with licensure Degree 5 – Earned graduate degree units Degree 6 - Master’s degree Degree 7 – Ph.D CFs need to be relevant by having its levels -Levels represent variations in job demands and responsibilities Give examples so that job holder can understand the distinction between the different levels Avoid vague terms like “moderate level of dependability” that may cause misinterpretation and misunderstanding Define the degrees in objective terms. This helps in avoiding biases when you are comparing jobs per factor

7. Point Rating Process 4. Calculation of the point values of levels within factor Requires a decision from the JE Committee on the relative weights of the main factors and their sub-factors. A careful consideration on the contribution of each factor makes to the maximum overall job evaluation score. Weights are important for they form the basis for calculating the corresponding point values of degree levels. And this likewise influence the pay levels for the evaluated jobs JE Committee needs to agree on the following points:  Groups of similar factors should have equal weights (e.g problem solving and decision –making)  Weighting of each factor should be of sufficient size to be meaningful so that individual factors add value to the JE factor plan  The organization is a knowledge-based firm therefore knowledge should have a greater weight than other factors  The Committee needs to test several models of weighting and scoring before finalizing. This will gauge their comparative effects on the rank of jobs. There are 2 main methods of apportioning the point values: 1.Arithmetic or geometric progression 2.10% method Sample

8. Point Rating Process 5. Job Evaluation Proper – members of the job evaluation committee rate the jobs and then total the point values are derived 6. Ranking or arrangement of jobs chronologically in a hierarchy (based on total point value obtained) which reflects their relative worth to the organization 7. Review results to spot evaluation mistakes or biases that can contribute to feelings of inequity. Reevaluation should be done in case there are suspected errors of judgment 8. Division of jobs into classes or job families. These shall later form the basis for the formulation of pay classes and the salary structure 9. Constructing the salary structure

9. Main Factor Weight FactorsSub- Factor Weght Degree levels and Point Values 12345 PositionBookStore ManagerJob Evaluation Form DepartmentOperations 35Skill Educati on 0.41445.577108.5140 Experie nce 0.62168.25115.5162.75210 25Effort2581.25137.50193.75250 30Re sponsibi lity 3097.5165232.5300 10Workin g Conditi ons 1032,55577.5100 TOTAL

10. POINT RATING ADVANTAGES  Point rating is an objective method based on well- defined and measureable factors  Degree levels are examined very carefully and given corresponding point values depending on the weights given in order to minimize subjectivity  It provides consistent results since each factor is clearly defined in terms of degrees and jobs are analyzed independent of their pay rates  It is also flexible and allows the organization to choose factors they value most  More reliable than non-analytical methods Disadvantages  Time consuming especially when there are many jobs to evaluate or conflicting schedule of JE committee  Expensive when a consultant is employed

11. REFERENCES