What is a ranking method?

Any enterprise needs to constantly monitor the accuracy and efficiency of the adopted payment system and adjust the situation if necessary. If the state of affairs requires the development of a new scheme, then it must meet the goals and objectives of the organization, its specific needs. Along with this, we must not forget about meeting the needs of personnel, ensuring an equitable distribution of remuneration among the employees of the enterprise.

Features of choice

Until recently, it was commonly believed that it was enough for a company to use one payment scheme. A universal system was developed taking into account the capabilities and needs of the enterprise. For example, a company could choose a scheme with additional payments. Currently, the leadership of most organizations has come to the conclusion that it is necessary to use systems depending on the conditions in which the company operates. In this case, it is necessary to take into account the specifics of products, services provided or work performed. Equally important is the nature of production. In particular, we are talking about the necessary skills of personnel, technology, automation, the duration of the technological cycle and so on. The characteristics of labor resources are also taken into account: the age of employees, staff stability , turnover, absenteeism, etc. In addition, other factors affect the choice of the payment system: the state of the labor market, the specifics of relations in the team.

Fair Payment

One of the key functions of an enterprise or industry is the determination of the relationship between the work performed and the remuneration received for this. Most employees compare their salaries with those that others, especially colleagues, receive. For many workers, a differentiated system is quite acceptable. However, the pursuit of a fair distribution of funds requires that the differences between the amounts received be regulated openly. To implement this task, special expert methods of differentiation have been developed. Let's consider them in detail.

Expert Methods: General Description

There are various approaches to differentiation and justification of differences in wages. All of them are usually divided into 4 large categories. The first includes methods for evaluating work. They form a more systematic approach to solving the problem. Other options are developed individually for each specific case. They are called specialized. These approaches are based on local acts. When analyzing in such cases, the volume of funds allocated for the performance of a particular professional activity is first of all investigated. Then a differentiated payment scheme is built. It may or may not suit employees. In practice, the second situation most often arises. It is accompanied by ongoing disputes and claims from the employees to the leadership.

Rating objects by ranking method

It involves the formation of a model for the differentiation of operations. Payment for an action is established after approval. This approach is closely related to the content of the activity. When using it, the quality assessment of completed operations is performed. At the same time, neither a specific contractor nor external market factors are taken into account. Quality assessment should be based on an objective analysis of activities. The starting point of the study is related to those activities whose payment is considered by all parties to the relationship to be fair, which have some similarities with other categories, so that they can be compared.

Easiest option

It is a direct ranking method. It is considered simple because the analysis is carried out by distributing the types of activities depending on the value that they have for the enterprise. The ranking method is a way of comparing the content of an operation with a process accepted as the source. As a result of the analysis, the action is assigned to the corresponding position. Often, a comparison of two objects is carried out according to the job description. However, no in-depth analysis of the contents of operations is carried out. The ranking method is a method that is expedient to apply in small companies. At such enterprises, as a rule, slightly different operations are performed. In large companies, this approach can be completely useless. Such firms usually carry out different types of activities with different contents. The method of quality ordering is suitable for these enterprises. The assignment of operations to one or another category in such cases is carried out in accordance with the approved scheme. This is especially true when setting a large number of individual levels and payment rates is completely unacceptable.

Pros and cons of approach

The ranking method is one of the schemes that can be introduced very quickly into the practice of an enterprise. Its undoubted advantage is the economy of use. At the same time, the analysis can be performed on the basis of incomplete data and without taking into account a number of standards. Often, there is an insufficient level of qualification and a lack of necessary knowledge among specialists using the ranking method. This, in turn, indicates the superficial nature of the analysis and can lead to gradation not so much of the types of activities as their performers.

Alternative option

It is a classification method. This method is widely used in determining the salaries of employees in institutions, differentiating the skills of specialists in the manufacturing industry. In contrast to the above, this option involves establishing a gradation structure and appropriate remuneration before performing a thorough study of certain operations. The number of levels is strictly defined, the functions are set. Accordingly, payments for each position are also understandable. The classification method involves the preparation of descriptions of gradations in such a way that they reflect significant differences in responsibilities, skills, and requirements for professional activities.

Table formation

Types of activities that are carried out according to simple instructions with constant monitoring are in the lowest position. At each next step, a higher level of responsibilities, skills, requirements and so on is reflected. Along with this, the degree of control is reduced. All activities are not broken down into components. It is considered as one. Grouping of objects is as follows.

Advantages and disadvantages

The method discussed above is also considered relatively simple, easily applicable and inexpensive. However, despite the fact that the results obtained during the analysis may well satisfy the interested parties, the amount of remuneration for a particular activity may turn out to depend on existing rates. Of the shortcomings, it should also be noted the great complexity of compiling descriptions of steps. This can be a real problem for large enterprises. Difficulties often arise when directly assigning a particular operation to a specific position. This is often extremely problematic, as several activities may have similar characteristics. However, the analysis is not always detailed enough for a correct classification.

Juxtaposition of factors

The first task when applying this method is to clearly describe the features that will be used in the analysis. As a rule, they are the requirements for education, training, including physical conditions of activity, responsibility, the presence of certain skills. Depending on the specifics of the enterprise, the list may be narrowed or expanded. For analysis, certain types of operations are selected that will act as key ones. Relative to them, job descriptions are compiled. Accordingly, rates are assigned for each type of activity. A feature of this method is the use of existing key transaction rates to determine several fixed points on the scale for indicators that are identified in the analysis process. The selected activities should have significant differences. They need to be described in detail. The number of key activities should be sufficient to fix the required number of reference points for comparing all operations: from the simplest to the most complex. Next, the work is distributed according to their importance in accordance with the selected factors. Similarly, payments are established for certain signs for key types of operations. Quantitative indicators are set in proportion to the factors used. For example, the activity of a tool maker is conditionally characterized by 20 units. Accordingly, they can be divided into the following quantitative indicators:

1. For skill - 9.
2. For the requirement for the level of knowledge - 5.
3. For physical requirements - 2.
4. For working conditions - 1.
5. For liability - 3.

Next, the results of the distribution of activity by payment and factors are compared. Discrepancies that may arise can be eliminated by adjusting rates or the content of transactions. If this is not possible, then the selected type of work cannot be considered key. At the last stage, all types of activities can be arranged on a scale in accordance with their relationship with the main operations of content. Each factor will be investigated separately until new levels of payment rates are formed for all work in the enterprise. The essence of this method is that tariffs for key types of operations are considered final and correct. Other activities are distributed according to each characteristic and are adjusted to the main scale.

Positive and negative points

As the main advantage of the method considered above, it should be noted the fact that factors that determine the relative value of different types of operations are taken into account. This method allows you to build a basic scale, which is expressed in monetary units. Non-key works can be evaluated on it. This approach is considered more flexible and accurate in contrast to the previous two. However, for the introduction and subsequent application of this method requires more time. In addition, it is problematic to explain to employees. When using this method, a certain injustice in payments may appear over time. It is determined by the inadequacy of existing rates or approaches, in accordance with which the significance of an activity for an enterprise is considered. It is also worth noting that, despite the obvious scientific nature of the method, the proportional ranking of payments for various factors is still arbitrary. In this regard, at present, this method is not as popular as others.

Point distribution

The rating method is based on the assumption that there are signs common to all types of operations. This method may contain a different number of factors - from 3 to 40. In one of the most common schemes today, the following rating objects are used:

1. Efforts.
2. Skills
3. Terms of business.
4. Responsibility.

They, in turn, can be divided into 10-15 sub-factors. The requirements that apply to them subsequently can be differentiated into several levels. The number of points assigned to each factor may be different. This is due to the use of a weighted score distribution. The direct ranking method assumes the same assignment of values ​​to each factor.

Analysis progress

To determine the rank of an object, you must:

1. Select factors that will be considered common to all types of operations.
2. Determine the number of levels for each characteristic when comparing the types of activity.
3. Calculate the specific gravity for each factor.
4. Determine the value of each attribute or level in points.

After that, the development of job descriptions for each type of activity begins. As a rule, they are compiled in accordance with the results of a systematic analysis of operations. Various works are evaluated on the basis of the generated instructions, as well as on the totality of factors of each of them or all types of activities on the first basis, then on the second and so on. As a rule, the second option is used, since it facilitates the analysis of the relative value of operations.

Pros and cons of scoring

The main advantage of this method is that with its help only points are calculated, but not the amount of payment. In this regard, its application does not significantly affect the current rates, unlike the previous three approaches. The scoring ranking method is considered more objective, since it is based on information about each type of operations obtained during their analysis. This allows you to give more informed explanations on data reliability issues. At the same time, this option contains a large number of subjective and arbitrary components. In particular, they occur when:

1. The selection of types and numbers of levels and factors that will be used in the assessment.
2. The distribution of specific gravity or points according to characteristics.

In practice, it is quite difficult to make decisions on these points. In these situations, subjective assessment is almost always manifested , since there are no objective signs. Accordingly, as a result, the significance of certain operations can be exaggerated. To use this method, you must have technical skills. This approach is not as flexible as the previous ones. When using it, it is difficult to take into account changes in general business conditions and other factors. The point ranking method is meant by specialists when they indicate that the analysis of activity, in fact, acts as a statistical operation, and it needs to be adapted to a dynamic situation. Meanwhile, an assessment of the work can be used to collect information about changes in the contents of the operation and translate them into cost values.

Conclusion

It must be said that all methods, regardless of complexity and scientific validity, are based primarily on arbitrary decisions, as well as subjective criteria. All of them largely depend on the current ratio of different types of professional activity. In many situations, the only way to prevent problems and conflicts related to the unfairness of payments is precisely the assessment of work. However, the results of such an analysis cannot be regarded as undeniable and absolutely correct. It may be advisable in practice to periodically evaluate, regularly review factors and levels, draw up new scales, determine the significance of an activity, if it helps reduce tension.