Meaning & Definition
Factor comparison is a job evaluation method used to determine the relative value of different jobs within an organization. It is a systematic approach to assessing and quantifying the worth of various jobs based on a set of predetermined factors or criteria. These factors typically include elements such as skill level, responsibility, knowledge required, working conditions, and other job-related attributes.
Here’s how the factor comparison method typically works:
- Selection of Factors
The first step is to identify and define the key factors that will be used to evaluate jobs. These factors can vary depending on the organization’s specific needs and industry but often include things like skill, effort, responsibility, working conditions, and supervision.
- Factor Weighting
Each factor is assigned a weight or point value to reflect its importance in the overall job evaluation. These weightings are typically determined through discussions and consensus among a committee or group of job evaluators.
- Ranking and Comparison
Jobs are then ranked based on each factor. This involves assessing the extent to which each job exhibits the characteristics associated with each factor and assigning it a numerical score.
- Scoring and Summation
Scores for each job on each factor are added up, and the total score represents the job’s overall value or worth within the organization.
- Job Grading
Jobs are often grouped into a set number of grades or classifications based on their total scores. These grades can then be used to determine compensation, benefits, and other human resource policies.
Factor comparison is a relatively complex and comprehensive method of job evaluation. It allows organizations to compare the relative value of various jobs within the organization, which can help in determining fair compensation, structuring job hierarchies, and making HR decisions. It is commonly used in large organizations or industries where there is a wide range of job types and where a more detailed and precise assessment of job values is necessary.