Factor Comparison Method of Job Evaluation

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.

Factor comparison is a quantitative type of job evaluation that involves ranking benchmark jobs in relation to each other on each of several factors, such as mental requirements, physical requirements, skill, responsibility, and working conditions. A determination is then made about how much of the hourly rate for a job is associated with each factor.

The factor comparison approach is actually a hybrid method for job evaluation that combines aspects of job ranking and the point method, but it also breaks down the wage into smaller parts. Unfortunately, although this method can be quite accurate, it is also quite complex and would be challenging to explain to managers and employees.

Managers also need extensive training to properly use the method. And, because the monetary rates are included, as the market changes the rate, the plan has to be updated frequently. As a result, the factor comparison approach is used less often than other approaches.

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