Point Method method is used for job evaluation.
Job evaluation is a systematic method by which compensation professionals ( C&B) compare jobs to determine pay rates that are internally equitable and externally competitive.
The point method is a widely used technique in which factors that are important to the job are rated numerically.
It helps in evaluating jobs by giving a detailed, analytical and quantitative evaluation.
It identifies certain number of factors i.e. various characteristics of jobs and the determining degree to which the ease of such factors is present in the job. Each degree is assigned a different number of points of different factor.
Steps involved in point method:
1. Determining the type of a job: The jobs range from top senior position to watchman level. Each involves different skills, responsibility, efforts and working conditions. Unskilled jobs have a separate evaluating programme for them.
2. Selection of factors: A factor is the differentiating feature of a job. The following should be kept in consideration for selecting a factor:
a. Factors must be ratable
b. Limited number of factors
c. Factors should not overlap in meaning
d. It must meet both employer and employee standards
There are mainly 4 Main job characteristics:
a. Skills: Education, work experience, training, expertise, judgement.
b. Responsibility: Machinery used, raw material used, work quality, output quality.
c. Effort: Physical and mental effort.
d. Working conditions: Work environment, accident hazard, discomfort.
3. Construction of factor scales: The next step is to construct a factor scale. It will include:
a. Relative value of each factor
b. Degree of each factor
c. Assigned point values to each factor
4. Evaluation of jobs: After the construction of factors scale, the evaluation of tasks can be started. Job analysis information should be read carefully and it should be compared with degree definitions. At which degree the job falls needs to be decided. It should be done with all the factors and total points should be added up.
5. Conducting the wage survey: After getting the worth of jobs in terms of points it should be converted to money value. A wage survey must be conducted to know what wages are being given in the industry.
6. Design the wage structure: After taking the wage survey the management decided to form a wage structure. There are 2 types of wage structure:
a. In the first kind, the wages are being paid to each job falling in any particular job class. The rates do not vary within a job class.
b. In the second kind, the wage changes not only between different job classes but also within the job classes.
Example of Point Method to hourly paid manual staff
The above table shows how point method is used to evaluate jobs.
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