Job Evaluation: Is it Worth the Effort?

Job evaluation allow employers to analyze jobs in terms of both salary and organizational fit. It is an important piece of your compensation administration if you want to ensure you’re paying fairly in relation to both internal and external benchmarks. In a BLR bootcamp titled "Comp 101 Bootcamp: How to Effectively Develop Competitive Pay Plans for Your Organization," Katie Miller Busch outlined some job evaluation basics for us.

Job Evaluation Basics

A job evaluation is "a process of systematically determining the relative worth of a job, and it’s to help you understand where a job fits within the structure for the organization, relative to other positions." Busch explained during the webinar. A job evaluation plan is a technique of using a common set of generic factors to evaluate all jobs (or a set of jobs) for the purpose of assigning a pay grade/range to the jobs. In the job evaluation plan, you rank a job’s duties and responsibilities relative to other jobs in an organization. You may refer to this as a "job structure" or a "classification structure."

 

When creating your job evaluation plan, "you really want a systematic approach to determine the relative worth of positions, based on obviously the things that you identified in the job analysis – the job content, the skills required (the things that you wrote up in the job description). You also want to factor in the value of jobs to the organization and the organizational culture and what’s happening in the external labor market." Busch explained.

job evaluation

The Importance of Your Job Evaluation: A Fully Defensible Pay System

Having a fully-defensible pay system starts with using those standard processes for gathering and documenting job information. If you have a standard technique for evaluating jobs, you can identify similarities and differences in the work performed, the levels of responsibility, and the skills and qualifications involved in the positions. This allows you to create consistent pay administration practices in which differences in pay are based on individual characteristics of the person, such as education, prior work experience, performance, productivity, and time in the job.

Busch explained the importance of the job evaluation plan during the webinar: "The key here is that we want to have consistency across the organization and we want to have employees and managers perceive that the job evaluation techniques/the job evaluation plan is consistent and fair." This will give employers guidance when determining the pay range for jobs and support your organizational pay strategy. When done right, it is certainly worth the effort.

Benefits of Job Evaluation

job evaluation

For many, the term “evaluation” or “assessment” can make them cringe with a feeling of loathing. However, evaluating or monitoring aspects related to jobs can help to determine the attainment of certain factors. This is an effective process through which one could identify the areas that require improvement and also understand the relative worth of a concern job. There are varied benefits associated with job evaluation. Some of the noteworthy among them are as follows:

Adjust the remuneration structure: 

A job evaluation essentially helps an organization to realize whether the deserved remuneration is provided to the employers of a particular rank or not. Moreover, this is a measure through which high achieving employees could be identified and organization can understand what amount of pay raise is necessary for them to gain high productivity. This is a process through which retirement benefits for employees on a particular job rank can also be measured.

Building Training Efficiency: 

An interactive job evaluation always help an organization to identify the efficiency of any specific training set up for building employee’s job skills. This would also help in building efficient training programs that would accentuate the job specific skills of the employees.

Identifying Talent Pool: A job evaluation is an effective way through which employee’s abilities beyond the scope of the present job functions could be realized. This allows an organization to understand what other job opportunities could be created so that the talent pool could be utilized fully.

Determine the shortcomings: Through an effective and interactive job evaluation, one can easily identify the loopholes present in the functioning of a specific job position. This assists the organization to identify the shortcomings and develop effective solutions for its betterment.

All the advantages of a job evaluation can only be achieved through the creation of well-focused job evaluation.

Types of Job Evaluation

A job appraisal is a systematic process through which an organization can determine the monetary worth, importance and complexity of a job position relative to another. An effective job evaluation could essentially help an organization to realize the worth of a job position and also identify the potential shortcomings of the same. Job evaluations are conducted based on certain parameters, according to which it is being further classified into various categories as follows.

Job Evaluation Based on Ranking: 

job evaluation

The most common and simplest job evaluation technique is based on ranking which is exercised for ranking the jobs in an organization according to the difficulty and education required for performing the particular job. Based on these ranks the compensation for a particular position is decided i.e. the highest rank would get highest salary. This type of job evaluation is a common practice of small businesses with tight budget.

Point Method: This job evaluation method is considered as a complex yet dynamic process of appraising the worth of a job position. This method assigns points to various compensation factors based on responsibility, skill level, working conditions and effort needed. The jobs that receive highest points receive the highest pay through the evaluation of this popular job appraising technique.

Job Evaluation Based on Market Pricing: 

This job evaluation is done by comparing the worth of two similar kind of jobs position in the market. This is a way through which similar types of jobs in other companies within a geographical area could be determined along with its corresponding market value.

Whole Job Evaluation: 

This a job evaluation process that helps in determining all factors associated with a particular job position. This does not compare similar types of jobs instead it access the worth of a particular job position completely by its aspects and roles designated.