Factor Comparison Method

A more systematic & scientific method of job evaluation is the factor comparison method. Though it is the most difficult method of all, it is appreciable & consistent. Under this method, rather than ranking complete jobs, each of jobs is ranked according to a series of factors. These factors comprise physical effort, mental effort, responsibility; skill needed supervisory responsibility, working conditions and other such kind of factors (for example, know-how, problem solving abilities, accountability, etc.). In this method, Pay will be assigned by comparing the weights of the factors needed for each job for example the present wages paid for key jobs might be divided amongst the factors weighted by significance (the most significant factor, for example, mental effort, receives the highest weight). In other terms, wages are assigned according to the job in comparison to its ranking on each of job factor.

Thus ,the steps involved in factor comparison method might be briefly stated as:

1. Select key jobs (say 15 to 20), representing wage/salary standard across the organisation. The decided jobs must represent as various departments as possible.
2. Determines the factors in terms of which the jobs are evaluated (like, mental effort, skill, physical effort, responsibility ,working conditions, etc.).
3. Rank the decided jobs under each of the factor (by each & every member of the job evaluation committee) independently.
4. Assign money value to each of factor and decide the wage rates for each key job.
5. For a job the wage rate is apportioned along the recognized factors.
6. All of other jobs are measure up to with the list of key jobs and wage rates are determined.

An instance of how the factor comparison method works is given below:

Box 1: An Example of Factor Comparison Method

After the wage rate for a job is spread along the ranked identified factors, in the department all other jobs are compared in terms of each of factor. Assume the job of a 'painter' is found to be same to electrician in skill (15), welder in physical effort (12), fitter in mental effort (10),  labourer in working conditions (4) and cleaner in responsibility (6) .The wage rate for this job would be (15+10+12+6+4) is 47.

Box 2: Merits and Demerits of Factor Comparison Method