A drawback of the ranking method of job evaluation is that evaluators using this method must:

Ranking Method  is the simplest form of job evaluation  method. The method involves ranking each job relative to all other jobs, usually  based on some overall factor like ‘job difficulty’. Each job as a whole is  compared with other and this comparison of jobs goes on until all the jobs have  been evaluated and ranked. All jobs are ranked in the order of their importance  from the simplest to the hardest or from the highest the lowest. The importance  of order of job is judged in terms of duties, responsibilities sand demands on the  job holder. The following steps are involved in ranking jobs.

1. Obtain job information – The first step of ranking method of job evaluation is the job analysis. Job descriptions  for each job are prepared and these are the basis on which the rankings  are made. The job ranking method usually ranks jobs according to ‘the  whole job’ rather than a number of compensable factors.
2. Select raters and jobs to be rated – Ranking all the jobs, at a time, is  usually not possible. The more usual procedure involves ranking jobs by  department or in ‘clusters’ i.e. factory workers, clerical workers and so  on. This eliminates the need for having to compare directly, say, factory  jobs and clerical jobs.
3. Select compensable factors — In the ranking method, it is common to  use just one factor, for instance job difficulty, and to rank jobs on the  basis of ‘the whole job’. Regardless of the number of factors you choose,  it is advisable to carefully explain the definition of the factor(s) to the  evaluators so that they evaluate the jobs consistently.
4. Rank jobs – Next, the jobs are ranked. The simplest way to do this  involves giving each rater a set of index cards, each of which contains a  brief descript of a job. These cards are then ranked from lowest to  highest.
5. Combine rating – It is usually to have several raters rank the jobs  independently. Finally, divide all the ranked jobs into appropriate groups  or classifications by considering the common features of jobs such as  similar duties, skills, or knowledge required. All the jobs within a  particular group or classification receive the same wage or range of  raters. Then, once this is accomplished, the rating committee can simply  average the ranking.

Merits — Ranking method of job evaluation has the following merits in terms of its procedure,  resources involvement and operational mechanisms.

1. It is the simplest method.
2. It is quite economical to put it into effect.
3. It is less time consuming and involves little paper work.

Demerits — The ranking method of job evaluation has the following demerits in terms of validity  and reliability.

• Simple.
• Very effective when there are relatively few jobs to be evaluated (less than 30).

• Difficult to administer as the number of jobs increases.
• Rank judgements are subjective.
• Since there is no standard used for comparison, new jobs would have to be compared with the existing jobs to determine its appropriate rank. In essence, the ranking process would have to be repeated each time a new job is added to the organization.

Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job.

Jobs are then grouped by total point score and assigned to wage/salary grades so that similarly rated jobs would be placed in the same wage/salary grade.

Job evaluations are performed for several reasons, most commonly to determine the monetary value of a job with a company. A second common reason is to discover overlapping jobs that cause two or more workers to perform the same duty. Thirdly, evaluations can uncover work flow gaps that can slow production. Two of the most common job evaluation methods are job ranking and the points method.

Job Ranking

Job ranking is the simplest and easiest job evaluation method. Jobs and employees who perform those jobs are ranked from highest to lowest, depending on their quality and value to the organization. This method entails the comparison of jobs against other positions within the organization. Jobs are evaluated based on content and value. Job content refers to the type of work performed, and the skills and knowledge needed to perform the work. Job value refers to how well the job meets the organization's goals and the difficulty in filling the job.

Ranking Advantages

Job ranking is the easiest and least expensive method of evaluation. It is very effective in small organizations, where there are few job classifications. This method is easy for employees to understand.

Ranking Limitations

The main disadvantage to job ranking is that it's based on judgment and isn't scientific. Rankings are based on the opinions of evaluators and can seem unfair to those performing the jobs. A major limitation is that evaluators have to redo the ranking system for every new job or position that's created.

Point Method

According to Microsoft, point evaluation is the most widely used method. This method is based on certain compensable factors within a company. Depending on the industry, job evaluators may assess jobs based on one or more of these factors: training level, qualification requirements, knowledge and skills requirements, complexity of tasks, interaction with other areas in the organization, problem-solving tasks that require independent judgment, accountability, responsibility, decision-making authority, degree of supervision required, cross-training requirements, working conditions and degree of difficulty. Points are then assigned to each factor. The number of points each position is worth equals an assigned monetary value.

Point Advantages

This method may be considered less biased by employees because evaluators assign a job’s total points before assessing compensable factors.

Point Limitations

The evaluator must be familiar with each job to accurately assign a point value to each compensable factor. The process of assessing and assigning points to compensable factors is a time-consuming and expensive method to implement.

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