Job Evaluation & Performance Appraisal Methods
– Job Evaluation Methods and Techniques
Management Methods
Positions are ranked hierarchically based on their difficulty or relative value to the company. This method is less accurate and suitable for evaluating a small number of jobs when one person is familiar with all of them. Two variations include the alternation ranking method (listing positions from most to least important) and paired comparison (comparing each position against every other one and marking the more important, resulting in a ranked list based on the number of times a position was deemed more important).
Job Classification Method
Similar to the management methods, this approach establishes categories and assigns positions to them. Jobs are evaluated based on a single factor or an intuitive summary of factors.
Advantage: Applicable to many jobs.
Disadvantage: Evaluation relies on a single factor or an intuitive summary of factors.
Point-Factor Method
- Factor Identification and Definition: Factors representing important aspects of the job content are identified. These factors should be measurable, easily understood, cost-effective, legally compliant, and avoid duplication.
- Factor Degree or Level Determination: A scale is developed for each factor to assess its presence in different jobs.
- Factor Weighting: Weights are assigned to factors, reflecting their relative importance. This can be done through expert committees or statistical analysis, using benchmark jobs (stable, well-known, accepted, and representative jobs) as a reference.
- Total Point Calculation: Factor scores are summed to determine the total value of each job.
Advantages: Enables inter-company comparisons, simple, stable, and generally accepted.
Limitations: Subjectivity of the analyst can influence results, potentially leading to wage discrimination.
The Hay Plan
Developed in the 1950s, the Hay Plan combines the point-factor method and compensable factors.
- Job Description: A detailed job description is created, including experience, responsibilities, and decision-making freedom.
- Factor Categorization: Job elements are grouped into categories (e.g., knowledge, problem-solving). The job description is compared against established standards.
- Point Assignment: Each descriptor is assigned a point value.
- Company-Wide Application: The plan is applied to all positions within the company.
- Job Importance: The total points for each position represent its relative importance within the company.
- Salary Structure: The point totals are linked to a salary structure, assigning a pay level to each position.
Advantages: Facilitates inter-company comparisons through generic descriptors, utilizes specialized terminology, and incorporates market research to establish relationships between positions and salaries.
Problems: Generic descriptors can be vague and subjective, and the system may prioritize technology over human resources.
Factor Comparison Method
Process: Jobs are broken down into factors and compared against benchmark jobs. When similarities are identified, monetary values are assigned to the factors. The sum of these values represents the monetary value of the job.
Similar to the point-factor method in its use of factors and salaries, but the factor comparison method utilizes benchmark jobs and monetary values for each factor, while the point-factor method uses grades and points.
Reference prices are determined by the market.
Disadvantages: Subjectivity of analysts.
Evaluation Based on Skills and Competencies
Skills: Compensation is based on the individual’s skills, often incorporating training programs.
Competencies: Focuses on the acquisition of new skills by personnel at higher levels, aligning with the strategic development of the company.
Discrimination in Job Evaluation
- Assigning lower status and remuneration to jobs traditionally held by women.
- Lower pay for administrative roles often filled by women.
- Pay scales reflecting labor market prices and subjective evaluator assessments.
- Subjectivity in selecting benchmark jobs.
Measures to Reduce Bias
- Raise awareness among analysts about potential gender bias in the system.
- Focus on job content, not the individual.
- Conduct comprehensive and structured job analysis.
- Weight factors related to jobs typically held by women equally to those held by men.
- Analyze aspects of work commonly performed by women.
- Ensure the absence of discriminatory aspects in the evaluation systems.
- Maintain records of the job analysis process.
- Inform employees involved in the evaluation procedures.
Identification of Job Classes
Job families and levels should be established. Job families group positions with related content.
– Performance Evaluation Methods and Approaches
Comparative or Standards-Based Approaches
Straight Ranking
Supervisors rank subordinates from best to worst based on overall performance. Useful for small organizations.
Alternation Ranking
The supervisor identifies the best and worst performers, then selects the best and worst from the remaining group, continuing until all employees are ranked. Useful for evaluating workgroups.
Paired Comparison
Each employee is compared against every other employee to determine who is better. The employee selected most often is ranked highest.
Forced Distribution Method
Supervisors must allocate a specific proportion of subordinates to each performance category (e.g., A, B, C, D, E). All methods assume that performance is best measured by a single criterion: overall performance. Results can be influenced by evaluator subjectivity. The straight ranking method doesn’t specify the magnitude of difference between the best and worst performers. Paired comparison is cumbersome for large organizations. All four methods assume the presence of high and low performers in every group. The forced distribution method prevents all employees from being rated as excellent.
Rating Scales and Behavioral Approaches
Narrative Essays
The evaluator describes the assessed individual’s strengths and weaknesses and suggests performance improvement strategies. Essays can vary in length and depth, and not all evaluators possess strong writing skills. Structured formats can be used.
Conventional Rating Scales
These are the most commonly used scales, often employing personality traits or characteristics (e.g., aggressiveness, independence, maturity) as performance indicators. Sometimes, indicators like quantity or quality of work are added. They are easy to create but susceptible to errors like leniency, severity, central tendency, and the halo effect. Evaluators rate the extent to which an individual possesses a specific trait, and descriptive words can lead to different interpretations. These scales are suitable for providing useful feedback to the evaluated individual. A space for adding a brief description is usually included.
Critical Incident/Event
Supervisors observe and record instances of particularly effective or ineffective subordinate behavior. This provides a description of the behavior and the situation in which it occurred.
Advantages: Increases the likelihood of subordinates modifying and improving their behavior. Simple, behavior-focused, and not prone to recency bias as events are recorded throughout the year. Allows for identifying high performers and attributing mediocre performance to specific events.
Disadvantages: Can lead to blacklisting and makes it difficult to compare subordinates when events differ.
Weighted Checklists
After collecting critical incidents from multiple evaluators, weighted checklists can be created. The evaluator marks the frequency of each event for each subordinate. This saves time but hinders feedback as the evaluator doesn’t determine the relative importance of each event.
Forced Choice
To reduce leniency bias (rating everyone highly) and enable more objective comparisons, forced-choice forms were developed. Unlike weighted checklists, forced-choice requires the evaluator to choose which of two paired elements best describes the subordinate. The evaluator is unaware of the relevance of the chosen description. These forms don’t provide feedback to the evaluated individual.
Behaviorally Anchored Rating Scales (BARS)
Critical incidents representing effective and ineffective behaviors are collected and grouped into categories. Each event is assigned a numerical value (weight) based on its contribution to maximum efficiency.
Problems: Evaluators may struggle to find appropriate categories to describe subordinate behavior, or observed behavior may be associated with default behavior. Subordinates may exhibit behaviors related to both superior and unacceptable performance, making global assessment challenging.
Behavioral Observation Scales (BOS)
Evaluators indicate the frequency with which incumbents perform specific behaviors, and each frequency is assigned a numerical value.
Advantages: Systematic job analysis, clear items and predetermined behaviors, evaluator participation in dimension creation, performance feedback provision, relatively high validity and reliability.
Limitations: Costly and time-consuming to develop. Not suitable for routine jobs.
Results-Based Approaches
Management by Objectives (MBO)
- The most common method for evaluating managers. Promotes alignment between organizational and individual goals.
- Step 1: Establish objectives for each subordinate.
- Step 2: Set a timeframe for achieving the objectives.
- Step 3: Compare current progress against agreed-upon targets.
- Step 4: Determine new targets and potential strategies for achieving previously unattained goals.
Effective in motivating managerial performance, but not always feasible to evaluate work solely based on results, as the process is also important. Ensuring that agreed-upon objectives align with the individual’s knowledge, skills, and abilities is crucial to avoid demoralization. Some companies combine MBO with other methods that assess overall performance.
Focus on Performance Measures
- Applied to non-managerial positions.
- Concrete measures should be linked to a timeframe and aligned with organizational objectives.
- Advantage: Guides incumbents towards desired outcomes.
- Disadvantage: Cost, time, and cooperation required for development.
Direct Index Focus
- Measures individual performance using objective and impersonal criteria (e.g., productivity, absenteeism, turnover).
- Productivity measures are suitable for managerial positions and can be broken down into quality and quantity measures.
Record of Achievement
- Professionals document their achievements related to relevant work dimensions. A supervisor verifies the record, and an expert team evaluates it.
- High cost and time investment.
- Enables prediction of success in certain professions.