What is meant by point method of Job Evaluation

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Explain point method used for Job Evaluation with its advantages and disadvantages

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This method is most widely used system of job evaluation. It involves a more detailed, quantitative and analytical evaluation of jobs. It requires identifying a number of compensable factors i.e. various characteristics of jobs and the determining degree to which each of these factors is present in the job. A different number of points is usually assigned for each degree, of each factor. According to Dale S. Beads— "Every point plan consists of a number of compensable job factors or characteristics. This can be classified under four headings of skill, effort, responsibility, and job conditions."
Following are the steps involved in point method:
(i) Determination of Type of Job-The jobs in any organisation will range from the top executive down to watchman, each involving different skills, responsibility, efforts, and working conditions. Many of the jobs are unskilled also. There should be separate evaluation programme for different categories of jobs. It would be better to select 'key* or 'benchmark' jobs which represent each major level of duties, efforts and skills for each classification of jobs to be rated. It enables to work with relatively few jobs in selecting factors.
(ii) Selection of Factors—A factor is a distinguishing feature of a job. In the selection of factors, the following points should be kept into consideration: (a) factors chosen must be rateable, (b) factors must not be too many, © factors must not overlap in meaning, and (d) factors must meet both employer and employee standards.
It is very difficult to lay down the exact number of factors which should be used for evaluating a job. C.W. Lytie, after analysing the problem of the number of factors, feels that there are only four major job characteristics, namely skill, effort, responsibility and working conditions. These factors are genei^_ divided into a number of sub-factors called specific factors. A possible division of general factors i specific factors is given below :
Skill: Education, experience, training, judgment.
Responsibility : Machinery and equipment used, raw-materials used, quality of output, work of others.
Effort: Physical and mental.
Working Conditions : Working environment, accident hazard, discomfort, etc.
Each of the above mentioned general and specific factors must be defined precisely. It would ensure consistency in evaluation by different job evaluators.
(iii) Construction of Factor Scales—The next step is to construct factor scale. It will include (a) determine relative value of each factor (b, determine degree of each factor and © assign point values to each degree factor.
(iv) Evaluation of jobs— After the construction of scales the task of evaluation can be started. Read job analysis information carefully. Compare it with degree definitions. Decide at which degree the job falls and obtain the points. Do it with each factor and total up to the points so obtained. This will give worth of job in terms of points.
(v) Conducting the wage survey-When the worth of jobs in terms of points is available, the next logical step is to convert these into money value. For this purpose, a wage survey must be conducted to know what wages are being paid by others in the industry. This information should be collected in respect of only the representative jobs.
(vi) Design the wage structure-Management takes a decision what kind of wage structure does it wish to have. There are two main kinds of wage structure in vogue: N
(1) In the first kind same amount of wages are paid to each job falling in any particualr job class. The rates do not vary within a particular job class.
(2) In the second kind the wages change not only between different job classes but also within the job classes.
(vii) Adjusting the existing wage structure—The wage structure designed in the preceding step is the one to which the existing structure must conform. Those who are getting less than what they should as per the new wage structure should get a wage raise. But those who are getting more should not have their wages reduced. Instead such job should be "red circled" so that when the occupant leaves the organisation, the job in question is either eliminated or changed or when the new person occupies it he is given "appropriate" wage.
Merits
(1) It gives us a numerical basis for wage differentials by analysing a job by factors it is usually possible to obtain a high measure of agreement on job value.
(2) Once the scales are developed, they can be used for a long time.
(3) Jobs can be easily placed in district categories.
(4) It's terms and definitions can be understood by all.
(5) Ratings by points make it possible for one to be consistent in assigning money values to the total job points.
(6) It has the ability of handling a large number of jobs and enjoys stability as long as the factors remain relevant.
(7) Prejudice and human judgment are minimised i.e. the system cannot be easily manipulated.
(8) Workers accept it favourably because it is more systematic and objective than other methods.
Demerits
(1) The development and installing of the system calls for heavy expenditure.
(2) The task of defining job factors degrees is a time consuming and difficult task.
(3) If many rates are used, considerable, clerical work is entailed in recording and summarising the rating scales.
(4) It is difficult to determine the factor levels within factors and assign values to them.
It is difficult to explain to supervisors and employees. Workers find it difficult to fully comprehend the meaning of concepts and terms such as factors, degrees and points.