The information derived from a job analysis is vital for establishing the relative worth of the jobs within the company through a systematic process called job evaluation. The four most common job evaluation approaches are job ranking, job classification, point factor, and factor comparison. The first two approaches, job ranking and job classification, are qualitative approaches. Point factor and factor comparison are quantitative approaches to job evaluation. Next we give a brief overview of the ranking method.

The most commonly used type of job evaluation is the point method, sometimes referred to as point factor method. This quantitative approach uses a point value scheme that yields a score for each job. The scores for various jobs are then compared to determine their relative worth.

The point method is developed by first identifying a set of factors for which the company is willing to pay. These compensable factors are chosen because they represent aspects of jobs that a company needs in order to achieve its goals. Typically, companies use compensable factors such as skill, effort, responsibility, and working conditions, but they can add other factors, such as innovativeness.

Once the point manual is ready, job descriptions for benchmark jobs can be compared with the factor descriptions, and the appropriate points can be assigned for the jobs. Benchmark jobs are used to represent the range of jobs in the company.

Once the points are assigned, job grades are created to reflect the hierarchy of jobs within the company. Jobs with comparable points are grouped together to create the job grades. A company may have one job grade plan for all jobs. Typically, however, a company develops different structures for professional, technical, and other categories of jobs, such as clerical and skilled-trade jobs.

Non-benchmark jobs can then be evaluated and slotted into the hierarchy.

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