Page 129 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Unit 6: Compensation and Rewards

Demerits of Job Classification or Grading System Notes

• It is difficult to write comprehensive and unambiguous class descriptions.
• The rater can be easily influenced by title, personality and existing pay rate of a job.
Thus, the judgement in respect of a whole range of jobs may produce an incorrect
classification.
• Lack of substantiating data makes it difficult for the management to defend ratings to
their employees.

• This method leaves much to be desired because personal evaluations by raters establish
the major classes and determine into which classes each job should be placed.
• This system is unsuitable for large organizations as it is a very rigid system.

Analytical or Quantitative System
In the method discussed above, i.e. ranking system and grading system, the relative jobs
were determined without reference to any numerical values (points). However, the quantitative
system, various factors of a job are considered and points are assigned to them according
to their relative worth. The analytical or quantitative systems of job evaluation are:
(i) The Point Rating System
(ii) The Factor Comparison Method
(i) The Point Rating System: The point rating system is based on the assumption that it
is possible to assign points to the different factors as well as to each degree of each
factor involved in jobs and that the sum-total of the points will give an index of the
relative value of jobs. The method was originally designed and developed by the
Western Electric Corn. The point rating system is based on the assumption that it is
possible to assign points and respective factors which are essential for evaluating an
individual’s job.

Merits of Point Rating System
• The use of fixed and predetermined factors forces the evaluator to consider the job
elements when rating jobs.

• The method forces job raters to consider individual factors rather than the job as whole.
• It gives us a numerical basis for wage differentials.
• Prejudice and human judgement are minimised. A clear record of the judgements of
the evaluator is later available for explaining the results of the evaluation.
• The assignment of point values indicates not only which job is worth more than
another but how much more it is worth.

• As the system is more systematic and objective than any other job evaluation method,
the worker’s acceptance can be assured.
Demerits of Point Rating System

It is very difficult to give a fair evaluation of the relative worth of each job in the organization.
• The listing of factors may omit some elements that are important in certain jobs.
• Workers find it difficult to fully comprehend the point rating system.
• The task of defining job factors and assigning value to each degree is a time consuming
and difficult task.
• The point rating system entails considerable clerical work like recording and
summarizing the rating scale.

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