The Objective of Job Evaluation
The purpose of conducting job
evaluation is to fairly determine the monetary value / worth of a job
in relation to other jobs in an organization. It’s the bridging gap between the relative
worth of a position to the organization and the pay range structure into which
the position falls. The thought of having to review every job position in an organization can be daunting, especially
if the organization is large. Fortunately, this is not always necessary. Select the key
job positions, positions that address or cover the type of work essentially
performed in each department. Using job
evaluation results, one can develop appropriate salary grades and decide on
other compensation issues. Job evaluation can also help clarify job
descriptions that could be used in determining performance standards and
creating performance appraisal systems.
It’s imperative that job evaluations
are reviewed periodically. Work conditions change over time. For instance,
technology advances and new services to benefit the organization become
available, potentially changing a position’s grade level or even eliminating
certain job requirements / positions.
But where to start! There
are four job evaluation methods to consider, which we will explore here.
The Ranking Method
Considered the simplest job
evaluation method, in the Ranking method jobs are listed from highest to lowest
value / merit in relation to the organization. This listing can also be done
according to level of difficulty in job performance. In this method, jobs are
examined as a whole.
This method is highly subjective, which could result in upset employees and low job morale among employees with lower job rankings. This morale impact can be detrimental to an organization’s culture. The ranking method, however is more time and cost efficient than other job evaluation methods. The ranking method is often appropriate for smaller organizations, or those with only a few jobs to evaluate.
The Classification Method
Under the Classification method, a predetermined number of job groups / classes are established with a brief description distinguishing each group / class. Jobs are then matched to these groups / classes based on each job’s content. This method is easy to understand and more acceptable to employees due to the formal criteria used. All factors in a position can be taken in account in this method. The Classification method can be used for a wide range of positions.
A weakness of this job evaluation method occurs when the positions do not match with any of the predetermined job groups / classes. When that happens, evaluators tend to lean on subjective judgment to classify tricky positions. This subjectivity may be deemed unfair through the eyes of the workers in such positions, particularly if the dollar pay range amount assigned to the group is less than what the employees expected.
Another consideration before utilizing the Classification method is the time necessary to develop the criteria for each group / class. Gaining agreement on the measurement definitions may take several weeks, depending on the makeup of the job evaluation committee and the perspectives of its members.
Factor Comparison Method
Instead of ranking by complete jobs,
under the Factor Comparison method evaluators rank each key job by predetermined factors.
These factors may include the following:
- Mental Effort
- Physical Effort
- Skills Required
- Supervisory Responsibility
- Working Conditions
- Accountability
- Travel Requirements
Pay is
assigned by comparing the weight of these factors. Wages paid would be divided among the
factors, giving more weight to important factors, such as mental effort.
“In seventeen years of consulting and teaching, I’ve only encountered the Factor Comparison method in use a handful of times,” shares Astron Solutions National Director Jennifer Loftus. “The Factor Comparison method is a very precise method of job evaluation. However, the complexity of designing and maintaining such a system results in most organizations utilizing one of the other three approaches.”
Point Method
The Point method is the most widely
used job evaluation method, primarily because the approach forces raters to
view and quantify all key job factors and sub factors. Factors are prioritized and then assigned
points by the job evaluators. The factor
points are then added to determine the position’s total point value. Jobs with similar points are placed in similar
pay grades and pay ranges. The most commonly used factors are the following:
- Skills
- Responsibility / Accountability
- Effort
Organizations
may have many sub factors within these three categories. An example of a sub factor could be
educational requirements, which would fall under the “Skill” factor.
The Point method offers a quantitative approach to job evaluation, minimizing the subjectivity associated with other methods. Additionally, it is not as complex a system to design and maintain as the Factor Comparison method. The Point method proves to be an effective middle ground for employers who seek formal job evaluation and have some time and financial resources to devote to the initiative.
Moving Forward
This introductory coverage
highlights how complex job evaluation can become. For example, if using the Point method, once
the evaluations are complete, raters have to translate the job evaluation
points into monetary values. Reliable salary survey data that gives details on
the position’s rate in the organization’s region and industry are needed as
reference points. When unsure which
approach makes the most sense for an organization, consulting experts can aid
in making the selection decision. Astron
Solutions is here to help! We specialize in compensation consultation and will
gladly assist in any inquires in getting started with evaluating your
organization’s jobs. Why
not reach out today for a free consultation?
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