Job Evaluation

Are you ready to take the challenge?

Studies have shown that all organizations practice some form of evaluation. Most of them, however, employ highly informal methods that HR practitioners and employees alike were not aware they are already treading the track of Job Evaluation.

Job evaluation (JE) refers to the systematic process of defining the relative worth of jobs within the company. One should not confuse JE with performance evaluation as the former evaluates the JOB and not the person handling the position.

Because of the popularity of job evaluation, a number of references have been written about it, as well as its specific methods and techniques. Some of the JE types are briefly discussed below:

Job Ranking

Job ranking entails the comparison of jobs against the other positions within the organization. Jobs are arranged according to their respective level of importance and value to the organization. More often than not, the criterion for comparison is based on a general concept such as level of responsibility. Jobs are then formed into a hierarchy to show the different levels and ranks within the company. These ranks are sub-divided into grades.

This type is JE is very simple and is very effective when relatively few jobs (less than 30) are involved.

Classification or Job Grading

The process starts by determining the job grades, ideally 4-8, in the organization, and clearly defining the parameters for each grade. Those subject for evaluation are then slotted into the grade that provides the closest match.

Aside from its simplicity, job grading is also flexible as it accommodates new jobs into the existing categories. Subjectivity as well as the possibility of more than one grade-fit are among the issues of this method.

Paired Comparisons

This type of job evaluation uses a statistical procedure in comparing jobs within an organization. The following point system is employed:

2 points if the job is considered to be of higher value
1 point if the job is regarded to have equal worth
no point if it is less important

After assigning points to the jobs, scores are added up to get an overall ranking. Though creating more consistency, this might be a longer process compared to job ranking as jobs are evaluated one at a time.

Factor Comparison

The process starts with the identification of a set of compensable factors that are indicative of the worth of the jobs. Typically, these factors are limited to 4-5 and would include: skills requirements, mental and physical (working conditions), responsibilities and management/supervisory skills.

The identification of benchmark jobs follows. These jobs are then priced by dividing the hourly rate into the identified factors. Allocation for each factor need not be equal as some jobs require more of a certain factor. The other jobs are then evaluated against the benchmark to determine their respective pay scales.

Although this process allows for the expression of the job’s worth in monetary terms, the issue on subjectivity still prevails, in terms of determining the pay per factor and in choosing the jobs for benchmark.

Point Method

Just like factor comparison, point method starts with the identification of a job’s set of compensable factors.

Each factor is further defined by determining the sub-factors that encompass it. Skills, for instance, can be broken down into relevant experience, educational attainment and ability. Points are then assigned to these sub-factors. The points for each factor are summed up to obtain the overall score of the job. After which, these are grouped by total point score and assigned with specific pay scales. This way, similarly rated jobs are compensated with the same salary grade.

The complexity of the process allows the expression of the value of a job in monetary terms and caters to a variety of jobs. Even though this maybe the most thorough type of job evaluation, the process is still not completely free of subjective judgments, in terms of determining pay scales, for instance.

Why the need?

Despite the myriad of JE approaches, there is still not always a scheme that fits all organizations. You are then encouraged, as HR practitioners and managers, to develop your own technique as you, among others, know your needs best.

Job evaluation is basically utilized to address the need of maintaining an equitable and competitive pay structure. As mentioned above, this method allows you to group similar jobs together, so they will be compensated in a relatively same way.

Information from JE can also be very useful in other areas of HR like career development, succession planning and performance management.

In addition, JE reflects the values and culture of your organization. Factor analysis, for example, would be reflective of what your company believes is important about what people do at work. This creates a culture of transparency as your employees would know the basis at which they are valued and rewarded. Because knowledge is a liberating experience, employees would be motivated to do their job and will strive to be the best in it.

Through job evaluation, expectations from the job, and consequently from the incumbent, are also communicated. These expectations become reasonable as qualifications are also set during the process. This reduces future disputes on issues of underperformance and low productivity.

So, are you up for the challenge?

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