Job evaluation: The Ultimate Guide

How do you determine the worth of a job? There are two methods to do this: either you can just spit out a number and hope it works, or you can carry out a job appraisal. We would prefer it if you chose the latter course of action because it will work better.

Utilizing the results of a job evaluation, you can decide on the appropriate compensation for the position by weighing the risks, value, and competencies needed for the position. One of the finest methods to turn work and expertise into a respectable salary is through a job review.

What is a job evaluation?

Job evaluation is a methodical procedure that assesses the value of one job in comparison to other jobs within an organization. The relative worth of distinct jobs is determined throughout the job evaluation process so that pay can be paid by the value of the employment.

Job evaluation is the process of determining a job’s value and how much to pay for it. The relative value of a job and how it compares to other jobs in the organization are determined during a job appraisal using a variety of parameters.

Job evaluation is typically carried out by the Human Resources or Personnel staff at your company, while it occasionally can be done by self-evaluation or peer review. When done properly, it aids in the development of a pay structure that is fair, equal, and uniform for everyone in your organization as well as a ranking order for the various roles.

Job evaluation methods

1. The rank approach

The rank approach involves ranking occupations after comparing them to one another. No particular element needs to be taken into account in this situation. Jobs in a specific organization are evaluated based on the subjective assessment of their value. Even while it is one of the most straightforward approaches, it is also one of the most divisive. The most crucial aspect of performing a rank order of jobs is that you must have a thorough understanding of the task at hand. Making sure the persons ranking the jobs have a thorough understanding of each one is one method to improve the process. To rank-order all the positions, they must read the job descriptions in greater depth.

Jobs are ranked in order of completion up until that point. Keep in mind that when utilizing this strategy, the entire job serves as the basis for rating rather than any single factor. The positions can be roughly categorized into groups once they have all been ranked. You can make multiple groups and decide where to cut things off. That will result in the grades you want. This technique has the benefit of being less expensive, and if used correctly, it may accomplish the same task as more advanced techniques. The process takes less time and can be used by anyone without much technical knowledge. Due to the lack of standards, it has the drawback of appearing haphazard.

2. The Point Factor Approach 

This method is based on particular elements that are deemed crucial for all occupations and are assigned points. These variables could be weighted or not. For instance, you might discover a method or system for evaluating jobs based on the following elements:

• Making choices
• The effects of a judgment error
• Qualifications/Education
• Required background for a certain position
• Skills

This is, in my opinion, one of the greatest methods for rating work because it results in a total number of points for each job, which are then used to rank the jobs. Because managers and employees can see how you determine the total points for a certain position, this approach has very high face validity with them.

Utilizing this strategy has the benefit of being more dependable than alternative methods. It is currently one of the most widely used methods on the market. The point system makes it simple to group jobs into grades according to predetermined cut-off points.

This method’s drawback is that it may be difficult for regular employees to comprehend. The individuals grading the jobs must have a solid grasp of each component and its cut-off values. In some cases, it might be challenging for people to distinguish between the numerous cut-off positions. Because it is overly quantitative and disregards the qualitative components of the job, some employees have occasionally protested about this system.

Despite the aforementioned drawbacks, my use of this technique of job evaluation has shown that it consistently generates the most acceptable rank order of occupations, which is frequently accepted by both employers and unions.

3. Market price

An objective technique of work evaluation is market pricing. It calls for you to estimate a role’s wage based on what other businesses are paying individuals in comparable roles. You can check out third-party compensation surveys to find out how much other companies are paying. This enables you to set your employees’ salaries competitively.

Internal equity is overlooked by market pricing. This implies that if the market rate for their position is low, a person may be paid less than their coworkers or that their workload may be more demanding. Combine market pricing with one of the internal job evaluation techniques to offset this.

4. Comparison of factors

The job ranking and point factor approaches are combined to create the factor comparison method. Start by ranking each position according to a few criteria, such as the number of talents required for each position or the level of expertise applicants must possess. Give these criteria points after that. The ranking of each position is based on the total points assigned to each role.

How to create a job evaluation process

The following are some typical actions to consider when developing a job evaluation process:

1. Hold a meeting for planning

Set up a meeting or workshop to go over the approach and scope of the job evaluation before beginning. In this first phase, respond to the following queries:

• What is the cost of this procedure to us?
• When will it be finished?
• Who takes part and what are their responsibilities?
• What technique are we employing for job evaluation?
• What roles are we assessing here?
• How will we gather information?
• What is the strategy for communication between us (e.g., will we meet once a week or exchange emails for updates)?

Even though answering all of these questions may need more than one meeting, it’s crucial to take your time at this point. Your job appraisal procedure may be more effective if you plan and discuss it beforehand.

2. Create the plan and its design

Your job evaluation plan’s development and design come under the next phase. To evaluate each role, you must decide on the precise criteria that will apply. You may develop your point system at this design and development stage. For instance, if you employed the point method. You can also gather and examine information about the roles you’re talking about, such as their job descriptions or market salaries.

3. Organize the positions in your organization

You can classify jobs, rate them, and create a compensation structure using the findings from the research and analysis you did in the second stage. As you must regularly build and change your ranks until you are satisfied with the list, this phase could take the longest. You might need to have a second discussion with your team to rank any jobs that are difficult to fit into specific categories or benchmarks.

4. Explain and carry out your plan

You can put in place a pay structure after you’re satisfied with it. It is your responsibility to inform current employees of any changes to the pay structure. You can accomplish this by writing individual letters, setting up private consultations, or even organizing a team briefing to go over the work review you just completed. You must pay attention to the concerns of your staff members because some may not like the changes. To demonstrate that you wish to make the company’s pay structure as equitable as possible, give them a chance to contest your choice.

When to perform a job evaluation?

For the sake of salary, promotions, lateral moves, transfers, assignments and allocated work, as well as other internal parity issues, it is necessary to ascertain whether roles and job tasks are comparable. Employees must believe that their workplace is just, and equitable, and provides all workers with equal chances. Employees should be able to see and understand how compensation and promotion chances are determined.

To choose appropriate pay or salary grades and make other decisions on compensation. This has a big impact on how happy employees are at work. It is acceptable for workers to discuss their compensation in the workplace. The compensation of public employees is made public. Any unfair compensation practices in your company’s pay system will be exposed to employees.

To support the creation of the performance evaluation system as well as job descriptions, job specifications, performance criteria, and competencies. These vehicles must be fair and independent from departmental whims, individual managers, and the boss, especially in huge firms. Employers who keep this in mind when they create their employee systems win employee loyalty and dedication. Employees constantly swap notes.

It helps with succession planning, career routes for employees, and career planning. All employees value having prospects for advancement in their careers, but your millennial workforce values this aspect the most. When they switch to another company, pay attention to the words they employ. The majority of the time, individuals depart from you in search of a better situation, a promotion, or a job where they believe their career prospects are greater.

To support the hiring process for new employees by putting in place job responsibilities that aid in creating job advertisements, evaluating candidate qualifications, determining an appropriate wage, negotiating a salary, and other aspects related to hiring new employees.