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Point Factor Method - steps to create your own plan.
| 1. Analyze Jobs | As in all other job evaluation methods, this step comes first. You should write a job description for each job analyzed. |
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| 2. Develop Training and Guidance for Job Evaluators |
Training and guidance for job evaluators will help to ensure fair and equitable job evaluations utilizing the:
The materials should also include a review procedure for cases where employees or managers question the evaluations of certain jobs. |
| 3. Select Compensable Factors | After you’ve gathered the job information, then select compensable factors and sub-factors. Compensable factors are especially important in this method of job evaluation. The factors should be the ones that the organization values and pays for. |
| 4. Define Compensable Factors | Factors and their sub-factors must have detailed enough descriptions to permit evaluators to use them to evaluate jobs. Such definitions are extremely important because the evaluators refer to the definitions often. When the factors chosen are specific to the organization, the task of defining them is less difficult. |
| 5. Determine Weighting and Points for Factors and Sub-factors | Only rarely are compensable factors assigned equal weight. It is usually determined that some factors are more important than others and should bear more weight. |
| 6. Determine and Define Sub-factor Levels |
The rating scale for each sub-factor consists of levels also called degrees.
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| 7. Evaluate the Jobs | Your trained job evaluators can begin evaluating the jobs. Top jobs are usually evaluated first. Next, benchmark jobs representing all levels and functions and departments are evaluated. Finally, the remaining jobs are evaluated. |
The point factor method can be a very accurate way to create a job hierarchy, but it is not for all organizations.
Advantages
Stability. A major advantage of the point factor approach is the stability of the rating scales. Once the scales are developed, they may be used for a considerable period. Only major changes in the organization demand a change in scales. Job changes do not require changing scales.
Accuracy. Point factor job evaluation plans increase in accuracy and consistency with use.
Acceptance. Because point factor plans are based on compensable factors adjudged to apply to the organization, employees are likely to accept the results. Factors chosen are those that the parties deem important.
Many uses. Point factor plans facilitate the development of job classes or grades. Point factor plans also facilitate job pricing and the development of pay structures.
Disadvantages
Complexity. Developing a point factor plan can be difficult. There are no universal factors, so these must be decided upon, preferably by members of a committee familiar with the jobs. Then level statements must be devised for each of the sub-factors chosen.
Time and expense. Point factor plans take time to install. Each job must be rated, usually by several job evaluators. Then the results must be summarized and accepted. Considerable administrative work is involved in recording and collating all these ratings. Much time, however, can be reduced by using a ready-made plan, which can be expensive.
Memory Jogger
In a point factor plan, compensable factors should be: