Quantitative Job Evaluation Method: Point-Factor System Through SHRM-SCP
In the realm of Human Resources (HR), one of the most commonly used job evaluation methods is the Point-Factor Method, also known as the Point Method or Factor Evaluation System. This approach aims to make job evaluation as objective as possible by collaboratively identifying relevant compensable factors and assigning points.
HR works with a committee of managers to identify key job elements such as skills, effort, responsibility, working conditions, and supervision of others. Each factor is assigned a range of points based on its importance and complexity.
The process typically involves breaking down each job into measurable compensable factors, assigning points to each factor according to a predefined scale, summing the points across all factors to get a total point value for each job, and comparing these total point values to establish the relative worth of jobs within the organization.
This quantifiable and structured approach enables organizations to develop consistent and fair pay structures by objectively measuring job content and complexity. Jobs with more points are considered more valuable to the organization.
The Point-Factor Method is widely used in many organizations because it reduces bias, provides a detailed understanding of job demands, and supports equitable compensation decisions. It is also an essential concept for HR professionals preparing for the SHRM-SCP certification exam, as understanding this approach is crucial.
A free practice question and answer dump for the SHRM-SCP certification exam is available, which includes detailed explanations and references to help candidates better understand the Point-Factor Method.
In summary, the Point-Factor Method involves HR collaborating with managers to assign points to compensable factors for jobs, totaling these points to arrive at an overall job score, and then comparing jobs based on these scores to determine their relative value and pay structure. This approach is a systematic, quantitative way to evaluate and compare jobs across an organization in order to set equitable pay levels.
In the context of HR strategy, the Point-Factor Method is significant for both business and finance, as it aids in establishing fair pay structures by objectively measuring job content and complexity. Furthermore, for individuals engaged in education-and-self-development, particularly those pursuing HR certifications like SHRM-SCP, understanding the Point-Factor Method is essential.
