HR Glossary

Factor comparison

Factor comparison is systematic and scientific method designed to carry out job evaluation which instead of ranking job as a whole, ranks according to a series of factors.

what-is-factor-comparison

Factor comparison definition

Factor comparison is systematic and scientific method designed to carry out job evaluation which instead of ranking job as a whole, ranks according to a series of factors.

The aim of factor comparison is to assign financial value to the relative parts of each job role.

Factors of factor comparison

1. Skill

2. Mental effort

3. Physical effort

4. Responsibility

5. Working conditions

Factor comparison steps

1. Selecting key jobs across the company, arund 20-25 jobs.

2. Selecting corresponding evaluation parameters for each of the selcted jobs.

3. Giving ranks to each job under each formulated factor in an independent fashion.

4. Assigning an equivalent monetary value to each job parameter.

5. Dividing money value of the job amongst the formulated factors.

Advantages and disadvantages of factor comparison

The advantages of factor comparison method

– its broad application,

– ensuring companies that their recruitment and selection methods provide a reasonable return on investment,

– fair way of assigning money value

– flexibility of the method as there is no upper limit on the rating of the factors.

The disadvantages of factor comparison:

– someone has to make a decision on evaluating the relative worth of each factor,

– cost,

– it’s time consuming.

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