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Job evaluation is a systematic process designed to aid in establishing pay differentials across jobs within a single employer (Milkovich and Newman, 1996, p. 127). It is an alternative to person-based (e.g. competency-based pay) and market pricing approaches. Job evaluation is a judgmental process based on a systematic appraisal of job descriptions. The culmination of this appraisal process is a hierarchy of jobs denoting their relative complexity and value to the organization. [ABSTRACT FROM AUTHOR]

Any job evaluation method which combines features of the classification job evaluation method, factor-comparison job evaluation method, ranking job evaluation method, or point job evaluation method is considered a hybrid. A common hybrid system incorporates the classification and benchmark job features of the classification method with the point scores of a point factor plan. Here, jobs are slotted into important compensatory factors by comparing them to anchoring benchmark jobs. Points are then assigned to the job based upon that slotting. [ABSTRACT FROM AUTHOR]

Under the factor-comparison method, jobs are evaluated using two standards: a set of compensable factors and the wages for a group of benchmark jobs (Milkovich and Newman, 1996). These two standards are combined to form a job comparison scale which is then used to arrange non-benchmark jobs into the final job hierarchy. The set of benchmark jobs must cover the entire range of each compensable factor. First, each benchmark job is ranked on all the compensable factors, resulting in a matrix which arrays rankings for each benchmark job on each compensable factor. [ABSTRACT FROM AUTHOR]

The classification method of job evaluation involves positioning job descriptions into a series of categories or classes. Milkovich and Newman (1993, p. 121) characterize these classes as "a series of carefully labeled shelves on a bookshelf." Each shelf or class is defined in such a way that critical job duties, responsibilities, and other work factors are described in enough detail to allow jobs to be slotted, yet retain enough generality to cover all jobs in the organization. These class descriptions serve as the standard against which job descriptions are compared and ultimately slotted into a specific job class. Benchmark jobs are often used to anchor a class and facilitate slotting by serving as a model of comparison for all jobs in that class. [ABSTRACT FROM AUTHOR]