Point Rating technique is the most widely used system of job evaluation. The method evaluates the compensable factors of each job. It involves a more detailed, quantitative and analytical approach to the measurement of job work. Under this method of job evaluation, jobs are broke down based on various identifiable factors such as skill, effort, training, knowledge, hazards, responsibilities and so on. Thereafter, points are allocated to each of these factors. Weights are given to factors depending on their importance to perform the job. Points so allocated to various factors of a job are then summed. Then, the jobs with similar total of points are placed in similar pay grades. The sum of points gives an index of the relative significance of the jobs that are rated.
Point Rating System requires six steps and is usually implemented by a job evaluation committee or by an individual analyst.
- Determine critical factors – The points rating method includes the following job factors for allocation of points:
- Safety of other;
- Equipment of materials;
- Assisting trainees;
- Production or service quality.
- Determine the levels of factors – Since, the amount of responsibility or other factors may vary from job t job, the point rating method rates several levels associated with each factor. These levels help analysts reward different degrees of responsibility, skill, and other critical factors.
- Allocate points to sub-factors – With the factors listed down one side and the levels placed across the top, the result is a point method matrix. Starting with highest level, the job evaluation committee subjectively assigns the maximum possible points to each sub-factor. The allocation allows the committee to give very precise weights to each element of the job.
- Allocate points to levels – Once the total points for each job element are assigned under highest level, analysts allocate points across each row to reflect the importance of the different levels.
- Develop points manually – Analysts then develop a point manual. It contains a written explanation of each job element. It also defines what is expected for the various levels of each sub-factor. These information is needed to assign jobs to their appropriate levels.
- Apply the point system – When the point matrix and manual are ready, the relative value of each job can be determined. This process is subjective. It requires specialists to compare job descriptions with the point manual for each sub-factor. The match between the job description and the point manual statement reveals the level and points for each subfactor of every job. The points for each sub-factor are added to find the total number of points for the job. After the total points for each job are known, the jobs re ranked.
Merits – The points rating has several advantages. The major merits of the method are:
- It is the most comprehensive and accurate method of job evaluation.
- Prejudice and human judgement are minimized. The method can not be manipulated.
- Being the systematic method, workers of the organization favor this method.
- The scales developed in this method can be used for long time.
- Jobs can be easily placed in distinct categories.
Demerits – The points rating method also has some disadvantages. The major demerits of the method are:
- It is both time-consuming and expensive method.
- It is difficult to understand for an average worker.
- A lot of clerical work is involved in recording rating scales.
- It is not suitable for managerial jobs wherein the work content is not measurable in quantitative terms.
Credit: Compensation Management-CU