HR Guide to the Internet:
Job Evaluation: Methods: Factor Comparison

Factor Comparison A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are:
  1. Skill
  2. Responsibilities
  3. Effort
  4. Working Conditions
Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics.
  1. equitable pay (not overpaid or underpaid)
  2. range of the factors (for each factor, some jobs would be at the low end of the factor while others would be at the high end of the factor).
The jobs are then priced and the total pay for each job is divided into pay for each factor. See example matrix below:

Job Evaluation: Factor Comparison
The hourly rate is divided into pay for each of the following factors:
JobHourly Rate . Pay for Skill Pay for Effort Pay for Responsibility Pay for Working Conditions

Secretary$9.00 4.502.002.000.50
Admin Assistant$11.00 5.502.502.500.50
Supervisor$15.00 6.003.504.001.50
Manager$21.00 9.003.507.001.50

This process establishes the rate of pay for each factor for each benchmark job. Slight adjustments may need o be made to the matrix to ensure equitable dollar weighting of the factors.

The other jobs in the organization are then compared with the benchmark jobs and rates of pay for each factor are summed to determine the rates of pay for each of the other jobs.

Advantages
  • The value of the job is expressed in monetary terms.
  • Can be applied to a wide range of jobs.
  • Can be applied to newly created jobs.
Disadvantages
  • The pay for each factor is based on judgements that are subjective.
  • The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities).

Tips

Few Factors Use a few well identifiable factors.

Biases Examine the Factor dollar weights for inherent biases agains females and minorities.

 

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