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Job evaluation
What is a job evaluation?
A job evaluation is a critical HR process that helps determine the true value of each role within an organization and its contribution to overall success, ensuring employees are compensated fairly and equitably. It often involves comparing a position against similar roles both within and outside of the organization.
Why is it important to perform a job evaluation?
Performing job evaluations is critical for several reasons. First, it ensures employees are paid accurately for their skills, responsibilities, and the actual impact they have on business outcomes. This promotes better pay transparency. Second, by assessing roles based on their true worth, HR teams can develop clear career paths that help employees advance. Job evaluations also help identify any overlaps in roles and responsibilities. Further, since each role is evaluated end-to-end, HR teams know what to look for in each candidate and can create clear performance standards for different roles.
What are the different methods of job evaluation?
Ranking method
Jobs are ranked in order of the overall value they provide to the organization. The ranking is usually based on the skills, effort, and responsibilities.
Classification method
Roles are first grouped into categories, such as senior-level, mid-level, and junior-level, or by titles like director, manager, and executive. Jobs are then assigned to these categories based on their required skills, responsibilities, and level of seniority
Point factor method
Different job factors, such as skills, effort, and responsibility, are assigned specific points. The total score a job earns determines its relative worth within the organization.
Factor comparison method
This is similar to the point factor approach, but instead of assigning points, monetary values are given to each factor. The combined total reflects the job’s overall value.
Market pricing method
Internal roles are evaluated against comparable roles in the external market, with salary benchmarks helping determine appropriate compensation.
What steps are involved in the job evaluation process?
There are five key steps involved in the job evaluation process:
Step 1:
Collect all the necessary information about the role, including skills, knowledge, responsibilities, and working conditions.
Step 2:
Based on the information that you have gathered, create detailed job descriptions that list their purpose, responsibilities, qualifications, experience, performance standards, and reporting structure.
Step 3:
Select a job evaluation method that is appropriate for your organization to better evaluate the role based on your organization's size, structure, and other industry practices.
Step 4:
With the selected method, evaluate your job. For instance, if you’re using the point factor method, you might evaluate jobs based on factors like skills, effort, responsibility, and working conditions. Points may be assigned to each one of these factors. A junior software engineer job could score 60 points, a team lead position could score 75 points, and a CHRO role could score 85 points. Based on the total scores, group the jobs into grades, such as grade A for roles scoring between 80 and 100, grade B for those between 60 and 79, and grade C for those between 40 and 59. Assign a pay range to each of these grades.
Step 5:
Keep your compensation structure consistent with your grades to ensure your employees are paid fairly. Since new roles often evolve, make it a point to review and update your job evaluation regularly to remain fair and competitive at all times.
What is the difference between job evaluation and job analysis?
While job evaluation determines the worth of every role at an organization, job analysis strives to analyze and detail the duties, responsibilities, efforts, and requirements associated with each role.
How often should job evaluations be performed?
With the rapid changes in the job market and the constant evolution of roles, it's ideal to perform job evaluations once a year to remain relevant and competitive.