The Job Evaluation And Grading System Business Essay

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Job Evaluation is defined as the process of analyzing the duties and requirement of each job and appraising the value of the job in relation to others in the organization, according to established standards. It provides systematic means for establishing the proper grade classification of jobs within the Group towards payments of equitable compensation.

2.1.2 Job Evaluation - The Future:

As organizations constantly evolve and new organizations emerge there will be challenges to existing principles of job evaluation. Whether existing job evaluation techniques and accompanying schemes remain relevant in a faster moving and constantly changing world, where new jobs and roles are invented on a regular basis, remains to be seen. The formal points systems, used by so many organizations are often already seen to be inflexible. Sticking rigidly to an existing scheme may impose barriers to change. Constantly updating and writing new jobs together with the time that has to be spent administering the job evaluation schemes may become too cumbersome and time consuming for the benefits that are derived. That's what this research report is about the role of job evaluation to tailor the need of companies who are coordinating in similar projects.

2.1.3 Job Evaluation and Grading System: [1] 

Job evaluation is a practical technique, designed to enable trained and experienced staff to judge the size of one job relative to others. It does not directly determine pay levels, but will establish the basis for an internal ranking of jobs.

The two most common methods of job evaluation that have been used are first, whole job ranking, where jobs are taken as a whole and ranked against each other. The second method is one of awarding points for various aspects of the job. In the points system various aspects or parts of the job such as education and experience required to perform the job are assessed and a points value awarded - the higher the educational requirements of the job the higher the points scored. The most well-known points scheme was introduced by Hay management consultants in 1951. This scheme evaluates job responsibilities in the light of three major factors - know how, problem solving and accountability.

Job Evaluation Factors




Mental Effort


Problem Solving





Working Conditions

Financial Responsibility

Mental Demand


Physical Effort

Freedom to Act

Visual Demand


Contacts with others

Operational Latitude

2.1.4 The Advantage of Job Evaluation to an Organization [2] 

Job evaluations or employee performance reviews are beneficial for an organization for various reasons, as the evaluations are designed to keep workers on-task in reaching the company's goals. The job evaluation process covers every job and employee in the business, providing appraisals and feedback to ensure the work is being done as expected and within reasonable time. Job evaluations are not necessarily a negative experience for the workers, because they can receive recognition and promotions for their hard work following a favorable performance appraisal.

A) Addressing Employee Needs

One of the advantages of having biannual or annual job evaluations is that you can address employee needs in the workplace. One employee may not be performing well in the given job because of the lack of resources in your company. This lack of resources can be discussed during the job evaluation, so the employer can address these needs to help improve the employee's work. The employee may also need additional training to complete tasks effectively in the given job, so in response to the evaluation, training can be initiated and completed.

B) Developing Employees

A common job evaluation between you and your employees includes a discussion of both the positive achievements the employee has obtained and aspects of job performance that need to be addressed and corrected. Your employees want to know what they are doing right and get attention or recognition for their hard work. Give them the proper appraisal and focus on the things that need attention, if applicable. Use the strengths and weaknesses of your employees to set new goals for them. These new goals will help develop their skills to improve your business.

According to the commission, the level definition can be based on some factors:

1. Authority

2. Challenges

3. Company Image

4. Complexity of Work

5. Compliance with Standards

6. Contribution to Corporate/Unit Goals

7. Contribution to Product Delivery

8. Control of Financial Resources

9. Creative Thinking

10. Customer Services

11. Decision-making

12. Education

13. Impact on End Results

14. Leadership/Team Membership

15. Management of Human Resources

16. Planning & Organizing

17. Problem-solving

18. Process Management

19. Professional Qualification

20. Revenue Contribution

21. Safety & Security

22. Scope of Activities

23. Work Experience

24. Working Conditions

25. Working Relationships

C) Company Goals and Mission Statement

Another advantage of having frequent job evaluations is to ensure that the employees' work is benefiting your business and the goals of the company. The tasks and responsibilities outlined in each employee's job description are chosen because they benefit the business in reaching company goals. The employees need to work with the company's goals and mission statement in mind at all times.

D) Customers and Clients

Job evaluations will also help employees address the needs of your customers and clients. Employees may not be offering the expected service or help to customers and clients because the proper training has not been completed or because the employee has not attended seminars, for example. The way your employees treat your customers affects how your customers see your business or company. One of the advantages of having frequent job evaluations is to ensure that your employees are treating your customers and clients with proper respect and according to company guidelines.

2.1.5 Process of Job Evaluation

The steps involved in the job evaluation process are as follows:

A) Understanding the Organization

The first step is a preliminary organization review which should be carried out with the Department and Division concerned.

The objective of such a review is to understand the jobs in relationship of one job to others within the organization. In the review, the following points should be considered.

Reporting relationships must be clearly defined.

The possibility of combining similar jobs should be investigated and any duplication or overlap of duties avoided.

The number of jobs and budgeted employees should be checked against approved manpower budgets.

Organization charts should be up-to-date and approved.

B) Job Analysis

The second step is to analyze each job and to find out what the job comprises. Job Analysis entails gathering the facts of the job and its environment, analyzing the tasks and responsibilities involved and determining the skills and knowledge required of the incumbent to carry out the job in a satisfactory manner.

C) Job Description

The third step is to prepare the Job Descriptions. This simply means putting

down in an orderly and standardized form the information obtained through Job Analysis.

The Job Description consists of three parts:

A concise description of the duties and responsibilities of the job, and

A specification of the minimum education, training and related experience required for carrying out such duties and responsibilities.

A description of all other information required for job evaluation purposes.

The Job Description is normally prepared either by a Job Analyst or by the Job Supervisor with the assistance of a Job Analyst. It is always subject to the approval of the Department Manager concerned. Once approved, the Job Description becomes the formal record for the purpose of Job Evaluation. Job descriptions should always be kept up to date and modified when changes to responsibilities or other information occur.

D) Grading System:

A company or industry having a professional Job Evaluation Analyst follows quality gradation patterns to ensure both employee satisfactions where one provides quality output. Whether an organization is looking forward to hire talented people or planning to promote an existing candidate, numerous factors decide the HR grading system.

The human resource grading system includes:

- Experience and skills required for a particular job

- Nature and range of duties

- Decision making ability

- Responsibility towards confidentiality

- Leadership skills

All these are some of the basic concepts that help in choosing the best employee for promotion with in-house survey or external recruitments. Job Evaluation grading system forms the backbone of any organization that wishes to find success in achieving its organizational goals. Over the past few years, HR solution has undergone a complete sea change where to ensure smooth workflow.

KGOC and KJO follow 2 different job grading approaches and the salary structures vary between the 2 organizations.

E) Job Evaluation and Grading:

Based on the information contained in the Job Description, the job will be evaluated under the Job Evaluation Plan. The total Point Scored for the job will determine its grade classification according to the point ranges established for each grade under the plan.

The grading system and Job evaluation plan differs in every organization according to their process and policies.

2.1.6 How to Develop a Performance Grading System for Fabrication Employees

By Daniella Lauren (2010)

Manufacturing companies hire fabrication staff to turn raw materials or resources into finished items. Developing a performance grading system supports the employee-evaluation process by offering owners and managers with a quantitative system. Most performance grading systems connect rewards, mutually monetary and non-monetary, to an employee's performance. This helps improve their skills and provides the firm with the benefit of higher-skilled employees who could increase entire productivity. Companies might also weed out poor employees through this process.

To assign precise tasks to every fabricator. This will allow for grading staff on a relatively small number of activities rather than a wide, generalized set of responsibilities.

To set productivity goals for every position. These goals are rottenly the units produced within a definite time frame

To create constraints for wasted materials.

To develop a number system to rate staff performance. Based on the tasks, goals and waste constraints, assign a system such as 1 to 5 for grading staff.

To weigh critical tasks ahead of routine tasks. Set a total number of points for every task, such as 50 possible points.

To calculate an evaluation grade by summing scores for each section of the report. A percentage (dividing earned points by total possible points) could result in a grade given for the total job performance of the fabrication staff

2.2 Related Studies

2.2.1 Understanding of Job Evaluation systems practiced by both the companies:

Job Evaluation Analyst from both the companies studied the existing job evaluation systems and the current job grading structures. The understanding of these two systems and the grading structures highlighted a few challenges, which could be either due to the orientations of the systems or due to certain historical factors, as stated later in this document. For each challenge highlighted, corresponding implications, wherever applicable have been identified.

The system and structure at KGOC, and the challenges arising out of them are given in A.1 Understanding of KGOC evaluation and grading, while that of KJO are shown in A.2 Understanding of KJO's evaluation and grading. Each of these two sections are organized into further three parts, with the first part providing a brief overview of the evaluation system, the second part showing the grading structure and the third part analyzing the system.

A] Understanding of KGOC evaluation system and grading structure

KUWAIT Gulf Oil Company (KGOC) follows the Kuwait Petroleum Company's (KPC) Unified Job Evaluation System; a factor point methodology used by KPC and its group companies and subsidiaries. There are 20 grades under this system.

KPC is the mother company of all the companies in Kuwait that belong to oil sector.

Overview of the evaluation system

In the Kuwait Petroleum Company it has a Unified Job Evaluation System, each of the seven factors has two degrees and each degree has sub-degrees attached to it. The following table shows the seven different factors and the corresponding degrees. The table also shows the minimum and the maximum possible scores that can be assigned to each of the seven factors and how it translates to a percentage of the total score at the lower end and at the higher end.



Analysis of Job Evaluation Factors




(a) Job Knowledge,

(b) Physical Effort,

(c) Mental Demands

Knowledge, Skill, Experience and Effort (A)


(a) Work Contact,

(b) Responsibility for Actions or Decisions*,

(c) Guidelines for Supervisory Responsibility, (d) Work Environment

Responsibility & Organization Level (B)


(a) Responsibility for Actions or Decisions*

Impact (C)


*Responsibility for Actions or Decisions has been equally split into B and C

Knowledge, Skill, Experience and Effort ("KSEE") requirements such as Job Knowledge, which are derived from organization hierarchy or levels forms almost 34% of the job evaluation scores, whereas Responsibility & Organization Level is directly linked to the organization hierarchy and contributes almost 51% of the score.

Thus, organization hierarchy influences 85% of the score, with the impact of the position contributing to only 15% of the score.

Comment: Hence it was found that the prime driver of the job evaluation scores will be responsibility and organization hierarchy

B] Understanding of KJO's evaluation system and grading structure

Khafji Joint Operation (KJO) has adopted a classification approach for allotting job grades to positions. KJO had implemented a point factor job evaluation system about twelve years back and all existing positions then had been evaluated by this system. However, in the last nine years no new positions have been evaluated and all such positions have been allotted grades using a classification approach. This grading structure consists of 26 job grades, with job grade 1 through job grade 16 known as "Non - University Grades" and job grade 21 through job grade 30 known as "University Grades".

Overview of the evaluation system

In the KJO job evaluation system, positions are assigned to predefined classifications. While this is relatively easy to administer, it does not meet the challenges posed by organization changes and difficulty to construct class definitions in complex organizations with diverse jobs.

The primary criterion for allotting grades is whether the position requires a university degree or not. Thus a position requiring a University degree would be positioned at a minimum of job grade 21, while a position not requiring a University degree would never be allotted a grade above job grade 16.

The following table shows the link between education criteria and the job grade allotted.

2.2.2 Difference and Problems between Job Grading Structures in KGOC and KJO:

KGOC and KJO follow 2 different job grading approaches and this makes it difficult to map employees to the appropriate grades across the 2 organizations. The difference leads to a perception of inequity between the Kuwaiti employees and their Aramco Gulf Operations Company counterparts. This is further compounded by the fact that the salary structures vary between KJO and KGOC, where KJO has multiple salary scales based on nationality and education levels; such is not the case in KGOC.

Following are some of the differences related to the job grading structures prevalent in the 2 organizations:

KGOC follows KPC's Unified Job Evaluation System, which is a based on a point-factor method. On the other hand, KJO's job grading structure is based on a classification method.

The Unified Job Evaluation System consists of 20 grades viz. Grade 1 to Grade 20. In KJO's job grading structure, the grades range from 5 to 16 (Non University Graduates) and from 21 to 30 (University Graduates)

KJO attaches a range of job grades for a particular position/ job title depending on qualification and the nature of the job. In KGOC, each position/ job title corresponds to a single job grade.

Due to the differences in the job evaluation methodology, grading structure and implementation of salary scales, there is a requirement of a grade correlation map between the 2 sets of jobs. Currently, there exists a correlation map, which is not acceptable to the KGOC nominated employees.

KGOC formed a team to carry out a grade correlation between KGOC and KJO jobs based on a scientific approach. The resultant approach able to compare jobs and grades consistently, fairly and equitably across the two organizations. KGOC also clarified that the Unified Job Grading Methodology will be used for this purpose, as per directions from Kuwait Petroleum Company (KPC).

A] Problem in Job Grading Structure

The 26 KJO Grades (University Grades 21 - 30 and Non-University Grades 1 - 16) are mapped to 20 KGOC Job Grades. Thus, multiple KJO Grades have to be mapped to a single KGOC Job Grade.

KJO treats the following pairs of University and non-University Grades as equivalent. This Policy has been respected in the design principles:

University Grade

Non-university Grade









Supervisors and subordinates share the same KGOC Job Grade.

For graduate recruits with experience not exceeding 3 years, equivalence of minimum requirements i.e. Qualification & Experience between KJO and KGOC is not established.