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what is difference between Job evaluation system and performance appraisal method

Updated on August 22, 2011

Job evaluation can be defined as a systematic process for determining the relative worth of a job as compared with others within an organization so that an equitable and meaningful basis can be arrived at in determining wages and salaries. However, job evaluation emanates from the job analysis process, using job description and job specifications as its base.

Methods of Job Evaluation
There are different methods available to determine the internal job worth through job-evaluation.

Essentially, all methods have a common objective which is to determine the relative worth of job in an organization. Nevertheless, each method differs in its complexity and measurement means.

Some methods consider the job as a whole while others consider it as divisible into units. Similarly, some methods place numerical values on various aspects of job (i.e. quantitative approach) while others does not. Again, some methods compare a job to a predetermined standard. Which ever method is adopted, the most important thing is to develop a usable, measureable and realistic system of compensation in an organization.

Prominent among the job evaluation methods are:
i. The ranking method
ii. The classification or grading method
iii. The weighted point method
iv. The factor comparison methods

The first two methods are regarded as non-quantitative while the last two are quantitative or analytical.

1. The Ranking Method

This method is one of the simplest methods used in job evaluation. It is done by ranking jobs in order of importance to the organization that is, starting from the highest to the lowest job in value. In this method, the entire job is considered rather than the individual component of the job.

Ranking under this method can take two forms namely; alternate ranking and paired comparison ranking. In the former, all jobs are listed and the evaluator works from top to bottom as well as bottom to top. The evaluator identifies the highest rated job, the lowest rated job, and then the second highest, followed by the second lowest and so on in that order until all jobs is listed. The job in the middle is the last one identified.

In the paired comparison ranking, you pair jobs together (two at a time) and find the better to the two. Then you pair the winning ones and repair them. A good example is the African Cup of Nations Football Competition where you put down the winner first, and then the losing finalist, then the third placed one etc.

1. It is the simplest of all the method
2. It is easy to understand
3. It is best for small companies


1. The method is heavily subjective hence managers may have difficulty explaining why one job is ranked higher than another to employees especially since their rankings will ultimately affect the pay received by individuals on the jobs.

2. When there are large numbers of jobs, the ranking method can be very awkward and cumbersome.

3. The job ranking method is limited in use hence is more appropriate or suitable to a relatively small organization having few jobs.

4. The ranking system does not indicate any degree of differences between jobs.

5. There are usually disagreements on values

2. The Classification of Job Grading Method

This method of job classification is peculiar of the public sector in Nigeria. The GL grades are derived through job classification or grading methods.

The method is carried out by first defining a number of classes or grades for jobs. Thereafter, the various jobs available in the organization are slotted into the classes based on common factors found in jobs such as degree of responsibility, abilities or skills, knowledge, duties, volume of work, and experience needed. The classes are then ranked into an overall system through these grades the pay for each job is determined e.g. civil service salary structure. Basically, there are five steps involved in jobs’ classification. They are as follows:

i. Necessary information is taken from job description and job specification

ii. Jobs are separated into types such as sales jobs, manufacturing jobs, clerical jobs etc.

iii. Identification of the job factors to be used in grading or classifying the jobs constitutes the third step

iv. Description of classes of jobs are then made by writing statements that indicate “jobs falling in this classification have the following characteristics”.

v. Placing individual jobs in the appropriate classification constitutes the fifth and last step

i. One reason for its wide acceptance in the public sector and other organizations is that it is a flexible method which employees and managers alike can easily understand.

i. It involves subjective judgment to develop the grade description and determine which job falls under which grade

ii. With a large variety of jobs and generally written graded descriptions, some jobs may appear to fall into two or three different grades.

iii. Again, the job grading method relies heavily on job titles and duties with the assumption that jobs are similar from one organization to another.

3. The Weighted Points Method
This method seems to be more peculiar to the advanced countries like the United States of America (USA). In this method, jobs are broken down into various identifiable components and weights or points are allocated to these components. The weighing or points given each factor or component will depend on the type of industry. For example, while a bricklayer’s skill will rate very highly in a construction industry.

The values or points allocated to the various components are then added for each job and compared to other jobs, by adding together the total points scored by a job, it will be decided what job group it falls and hence the salary range for that job. The table A below clearly illustrates the point method.

i. The method is relatively simple

ii. It is much more comprehensive system in that it considers the components of jobs rather than just the total job.

iii. The method can be understood by both managers and employees.

iv. It does not consider current pay for a job rather it evaluates the components of job and total points are determined before the current wage structure is considered.


i. It involves much time to be drawn hence manuals and system developed by management consultants or other organizations are what many employees adopt.
ii. Another demerit of the point method is that even though it does attempt to be objective, managers must still make subjective judgment to determine what degree and how many points should be allocated for each element.
4. The Factor Comparison Method
The factor comparison method involves determining the key jobs in an organization, attaching weight to them, using them as bases for determining the relative importance of other jobs.

A key job is one generally seen by employees and managers as been a standard type of job, correctly priced, and representative of major factors in most jobs in the organization.

To develop the factor comparison method, five factors are commonly used to evaluate jobs,

i. Mental requirements
ii. Skill requirements
iii. Physical requirement
iv. Responsibility and
v. Working conditions


i. The method is tied to one organization hence each organization must necessarily develop its own key jobs and its own factors.

ii. The method does not only tell which jobs are worth more, it also indicates how much more so the factors values can be more easily converted to the monetary wages.


i. The method is relatively difficult and complex hence it is not easy to explain to employees.

ii. It is time consuming

iii. It may not be appropriate for an organization with similar jobs.


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