Saray is the Head of Human Resources at Connecteam, where she leads a team of HR specialists. She has a diverse background in recruiting and HR management and deeply understands the unique challenges presented to high-growth companies. Saray has strong managerial and business leadership skills, making her a relentless force in solving company issues. Saray holds a BA in Behavioral Sciences.
Saray is the Head of Human Resources at Connecteam, where she leads a team of HR specialists. She has a diverse background in recruiting and HR management and deeply understands the unique challenges presented to high-growth companies. Saray has strong managerial and business leadership skills, making her a relentless force in solving company issues. Saray holds a BA in Behavioral Sciences. Table of contents
A job evaluation is a systematic process used to assess the relative worth of jobs within an organization. It typically involves analyzing job responsibilities, requirements, and complexities to determine appropriate compensation levels and job classifications.
Job evaluations are usually performed with a combination of internal assessments of the roles in your company as well as external market research. It involves looking at how much each role gets paid, what the pay is for related positions, and what benefits are appropriate for each role. You might then compare your salary and benefits package to those of similar businesses in your area.
As an employer, determining fair and equitable compensation for your employees is crucial But with so many different roles and responsibilities, how do you objectively determine the value and pay level for each job? This is where conducting job evaluations comes in
Job evaluation is a process used by organizations to systematically assess the value of each job role relative to other roles This allows employers to develop an equitable hierarchy and compensation structure within the organization.
In this comprehensive guide, we’ll explore what job evaluation is, why it’s important, and how it benefits both employers and employees.
What is Job Evaluation?
Job evaluation is a systematic process organizations use to determine the relative value of jobs within the company. This assessment allows jobs to be classified and grouped based on the skillset, responsibilities, and tasks required.
Some key aspects of job evaluation include:
- Comparing job roles based on level of contributions to the organization
- Assessing the required competencies, skills, experience and decision-making authority
- Evaluating the scope and impact of job responsibilities
- Surveying compensation norms and averages for similar roles
- Identifying relationships between jobs within the organization
The overarching goal is to establish a rational pay structure and job hierarchy. Jobs are ranked and grouped into job grades or bands. This provides the foundation for making consistent compensation and promotion decisions.
Why Do Employers Conduct Job Evaluation?
There are several compelling reasons conducting job evaluation is beneficial for organizations:
Fair Compensation
Job evaluation provides an objective basis for determining pay levels and setting compensation. By assessing the scope and impact of each role, a fair pay structure can be developed. This ensures similar jobs are compensated equitably.
Internal Parity
The process aims to create parity between roles within the organization. Employees want to feel their job and contributions are valued relative to their peers. Job evaluation facilitates this.
HR Planning
Job grades and classifications established through evaluation allow organizations to plan their talent needs. They can identify career paths and develop succession plans.
Performance Management
The job analysis provides essential information for defining job responsibilities and requirements. This aids in developing job descriptions, performance metrics, and competency models.
Compliance
Having documented job evaluation procedures helps demonstrate compensation practices are based on legitimate business factors, supporting compliance.
Employee Perception
Employees want pay and promotional decisions to be transparent and equitable. Job evaluation establishes standard practices all can understand.
For both employers and employees, job evaluation provides the foundation for fair and defensible people management practices.
When Do Employers Perform Job Evaluations?
Ideally, organizations take a proactive approach by conducting evaluations for all existing roles on a periodic basis. Annual reviews help ensure the hierarchy and compensation levels stay current.
Beyond this regular cycle, evaluations are also done in response to specific events including:
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New Role Creation: When new jobs are developed, they must be classified within the structure.
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Substantial Role Change: If responsibilities or expectations of a role change significantly, it may require re-evaluation.
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Employee Request: An employee may request a review if they feel their role has evolved.
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Reorganizations: Major restructuring often necessitates realigning job classifications.
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Competitive Pressures: Often evaluations are triggered by the need to benchmark pay against the external market.
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Compliance Requirements: Some industries require regular evaluations to meet regulations.
By taking a proactive, ongoing approach combined with event-triggered reviews, employers can keep their job structure and pay practices current.
What is the Job Evaluation Process?
While methodology can vary, job evaluation typically follows a standard series of steps:
1. Identify Jobs to be Evaluated
First, determine which jobs will be included. For comprehensive reviews, all jobs in the organization are evaluated.
2. Gather Job Data
In-depth job analysis is conducted to understand the full scope of responsibilities, required competencies, qualifications, and conditions for each job.
3. Select Evaluation Method
There are several standard job evaluation methods, such as point factor ratings, classified, and job ranking. Select a method that best aligns to your needs.
4. Rate and Rank Jobs
Based on the evaluation method, analyze, rate, and rank each job relative to the others.
5. Develop Job Hierarchy
Group jobs with similar rating totals into job grades or bands. This creates the hierarchy.
6. Determine Pay Structure
With the hierarchy established, determine appropriate pay ranges for each job grade informed by market pay data.
7. Document Ratings
Fully document the entire evaluation process including factors, ratings, rankings, and pay structure.
8. Communicate to Employees
Roll out the new structure and provide education on policies for pay, transfers, promotions, etc. based on job grades.
What Methods Are Used for Job Evaluation?
There are several standard job evaluation methods. The most commonly used include:
1. Point Factor
One of the most objective methods, jobs are assessed based on compensable factors like skill, effort, responsibility, and working conditions. Each factor is weighted and a rating scale applied.
2. Job Ranking
Jobs are listed from highest to lowest based on overall importance and value to the organization. A straightforward comparative approach.
3. Job Classification
Jobs are grouped into categories based on similarities in key factors like functions, skills, education, experience and pay norms.
4. Market Pricing
Pay for jobs is aligned to average market rates for comparable roles determined through salary survey data.
5. Job Grading
A hybrid approach that first groups similar jobs via classification and then ranks jobs in each grade via ranking. Grades are attached to pay bands.
Selecting the right job evaluation method depends on your organization’s structure, jobs, and compensation philosophy.
What Are the Benefits of Job Evaluations?
When executed effectively, job evaluation provides several important benefits:
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Fair compensation system – rational, fact-based approach to pay structure decisions
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Internal parity – consistency between pay, promotions, and opportunities
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HR planning – provides foundation for career paths and succession plans
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Compliance – defensibility against claims of discrimination
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Employee perception – increases trust and credibility of practices
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Manager guidance – tools to make equitable decisions on pay, transfers, assignments, etc.
Overall, both employers and employees gain from job evaluation practices that aim to create an equitable work environment.
Job Evaluation Best Practices
Follow these best practices to maximize the effectiveness of your job evaluation process:
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Have a regular cycle for evaluations, such as annually
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Involve managers, HR, and employees in the process
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Select the job evaluation method that best fits your needs
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Use consistent, well-defined factors and scoring
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Fully document ratings, rankings, and pay structure
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Train managers on using the job grades/bands
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Communicate process and changes to all employees
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Review compensation alignment regularly
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Update evaluations when jobs or structure change
Ongoing maintenance of your career structure through job evaluation ensures your practices stay equitable.
Common Job Evaluation Pitfalls
Some potential missteps to be mindful of include:
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Failing to update regularly as jobs evolve
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Disconnected pay scales and job grades
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Lack of documentation on ratings
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Not involving managers and employees
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Poor or inconsistent scoring on factors
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Groupings based on favouritism vs. objective data
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Applying market pricing without job level context
Avoid these issues via sound design and governance of your job evaluation and compensation review processes.
Frequently Asked Questions
Some common questions about job evaluation include:
How often should job evaluations be done?
Most experts recommend an annual or bi-annual cycle. Some organizations tie evaluations to performance review timing.
What triggers a job re-evaluation?
Major changes in role scope or expectations typically require a re-eval. Employees can also request reviews if they feel their job has increased in value.
How can we determine if our pay structure is equitable?
Compare job grades and pay ranges to averages for similar roles in your industry. Look for parity on factors like experience and skill requirements.
Should employees be involved in job evaluations?
Yes, incorporate employee input on job scope to supplement manager perspectives. But maintain objectivity.
How can managers use job bands effectively?
Train managers to reference bands for compensation, transfers, promotions, and career planning for employees. Update them on changes.
How do we handle employees whose pay is above their job grade?
Communicate that they will remain at their current pay with no increases until the range catches up. Other options are lump sum adjustments or scheduled decreases. Handle sensitively.
Putting It All Together
Done right, job evaluation provides the foundation for equitable pay and opportunities by systematically assessing the relative value of roles in your organization.
But it does require an investment of time and effort to properly research jobs, select the optimal evaluation method, document ratings, an
Step 4: Assemble your team
Once you have gathered the necessary information and have determined the parameters of your evaluation, you can assemble your team. Even if you’re conducting a small-scale project, it’s still advisable to have at least one other person evaluate with you. Being answerable to others will help you to avoid bias during a highly subjective process.
How Do I Perform Job Evaluations?
No matter the scale, a good and productive job evaluation starts with planning.
You should start by determining the scale of your evaluation. Are you evaluating an individual role, a department, or the whole organization? Next, consider the purpose of the evaluation: are you adding benefits, changing salaries, or restructuring the organization? Answering these questions will help you determine what resources you should allocate to the evaluation, and who your key stakeholders will be.
