Evaluating Jobs: The Point Method
(Reference reading in the text: Strategic Compensation by Richard J Long, 4th Edition)
(Chapter 8)

The Point Methods of Job Evaluation
The Point Method – Establishing job values by the application of points to each job based on compensation factors

Basic procedure: A number of compensable factors are identified and then the degree to which each of these factors is present in the job is determined and an overall point value is calculated (See Compensation Notebook 8.1, P.299of the text).
The steps in developing a point system:
Collect job information (based on job analysis)
Select and define the compensable factors
Weight the factors (Determine factor weights)
Scale the factors (Assign degrees to factors)
Assign point value to factors and degrees
Rate the jobs
Test the system

PLEASE PREPARE PAPER FOR (2-6) STEPS ONLY

** Please note the bolded steps above are those specified in Chapter 8 of the text. While the text lists only four steps, the seven steps listed above are more detailed and easier to follow. See the detailed description below:

1) Step 1: Collect job information through job analysis

Any job evaluation will start with obtaining job information. We obtain job information through job analysis, using job description and job specification as the bases on which jobs are evaluated.

2) Step 2: Select and define compensable factors

Compensable factor –a fundamental compensable element of a job, such as skill,
effort, responsibility, and working conditions.

Principle: We should select those compensable factors that are representative and inclusive to the jobs in our company. They should be accepted by the employees as fair and objective.

(See Compensation Notebook 8.1, P.299 of the text for examples of commonly used compensable factors)

After you decide on a factor, we must define it. The definition of a factor…