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Conduct a job evaluation

By Susan M. Heathfield

Your employees want fair pay. Your employees want regular raises. You want to attract and retaintalented employees in your organization. Your employees need clarity about their roles and

responsibilities as well as about what's expected from them. Job evaluation, performed effectively

and used to clarify and revise job descriptions and position responsibilities, is your solution to all of

these issues.

As a compensation and benefits specialist, you are responsible for developing a fair compensation

plan. Job evaluation is a tool used to evaluate the worth of each job in your organization and in

today's labor market. A successful job evaluation system can help you make your organization's pay

system equitable, understandable, legally defensible, approachable, and externally competitive. You

can use job evaluations to:

Clarify job descriptions so that employees understand the expectations of their roles and the relationshipof their roles to other jobs within the organization.

Attract desirable job candidates. Retain high-potential employees.

What is job evaluation?

Job evaluation is a systematic process that you can use to determine the relative level, importance,

complexity, and value of each job in your organization. With a successful job evaluation system, youcan compare each job to other jobs within your organization.

It is best to perform job evaluation after work analysis. Job evaluation, in conjunction with work

analysis, helps you develop a job description that is broad, descriptive, and flexible so that you can

adapt the description to your organization's changing needs.

Assess employee contribution

Job evaluation helps you establish and qualify differences in employee contribution across jobs.

These differences provide a foundation for employee compensation decisions. The job evaluationprocess measures the elements of a job and produces an overall score. In each case, you evaluate the

job, not the employee who performs the job.

Assess job content and value

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Typically, job evaluation assesses both the content of a job and the value of a job for your

organization.

Job contentrefers to the type of work performed and the skills and knowledge necessary to perform thework.

Job valuerefers to the job's degree of contribution in meeting your organization's goals and the degreeof difficulty in filling the job.

Factors in job evaluation

Job evaluators often assess jobs based on these factors:

Training level or qualifications requirements Knowledge and skills requirements Complexity of tasks Interaction with various levels of the organization Problem-solving and independent judgment Accountability and responsibility Decision-making authority Degree of supervision required Cross-training requirements Working conditions Degree of difficulty in filling job

Implement job evaluation

The concept of job evaluation often can be intimidating to employees in an established organization.Employees might worry about losing their jobs, and pay might be decreased after job comparisons

and evaluations are completed. To help employees accept and understand your job evaluation

system, approach job evaluation from an organizational development perspective.

Create a team

To promote widespread support, understanding, and acceptance across your organization, create a

cross-functional team to work on job evaluation. The team should represent various levels and jobs

within your organization.

Select the job evaluation method

The team can work together to evaluate and select a job evaluation method. Train team members in

the requirements of the Fair Labor Standards Act and any other best practices for selecting a job

evaluation method for your organization.

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Communicate with employees

During the implementation of job evaluation, regularly communicate with employees throughout the

process. This helps employees feel a sense of ownership from the results of the job evaluation

results.

Steps in job evaluation

The standard steps in job evaluation include:

1. Introduce the concept of job evaluation.2. Obtain management approval for the evaluation.3. Train the job evaluation selection team.4. Review and select the job evaluation method.5. Gather information on all internal jobs.6. Use information to fully expand job descriptions.7. Use the selected job evaluation method to rank jobs hierarchically or in groups.8. Link the ranked jobs with your compensation system or develop a new system.9. Implement the job evaluation and compensation systems.10. Periodically review your job evaluation system and the resulting compensation decisions.

Analyze job evaluation methods

Before implementing job evaluation in your organization, select the most appropriate job evaluation

method. Hundreds of job evaluation systems exist. Research the job evaluation methods and

resources available online. Five job evaluation systems are most commonly used:

Ranking Classification Point evaluation Factor comparison Market comparison

Ranking

Ranking jobs is the easiest, fastest, and least expensive approach to job evaluation. It is also most

effective in smaller organizations with few job classifications. To rank positions, order jobs from

highest to lowest based on their relative value to your organization.

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The process of job ranking typically assigns more value to jobs that require managerial or technical

competencies. More value is also assigned to jobs that supervise, exercise decision-making authority,

or rely on independent judgment. For example, a job-ranking system might rank the job of CEO as

the most valued job within the organization and the job of product assembler as the least valued.

Advantages Simplicity is the main advantage in using a ranking system. It is also easy to communicatethe results to employees, and it is easy to understand.

Disadvantages Ranking jobs is subjective. Jobs are evaluated, and their value and complexity areoften assessed on the basis of opinion. Also, when creating a new job, existing jobs must be reranked to

accommodate the the new position.

Classification

The general purpose of job classification is to create and maintain pay grades for comparable work

across your organization.

To conduct a job classification: First, write descriptions for a category of jobs; next, develop standards

for each job category by describing the key characteristics of those jobs in the category; finally,

match all jobs to the categories based on the similarity of tasks, the decision-making exercised, and

the job's contribution to the organization's overall goals.

Universities, government employers and agencies, and other large organizations with limited

resources typically use job classification systems. These types of organizations have many types of

jobs at diverse locations and must maintain equitable and fair standards across all work settings.

Advantage Job classification is simple once you establish your categories. You can assign new jobsand jobs with changing responsibilities within the existing system.

Disadvantages Job classification is subjective, so jobs mightfall into several categories. Decisions relyon the judgment of the job evaluator. Job evaluators must evaluate jobs carefully because similar titles

might describe different jobs from different work sites.

Point evaluation

Point evaluation is the most widely used job evaluation method. In a point evaluation system, you

express the value of a particular job in monetary terms. You first identify compensable factors that a

group of jobs possess. Based on these factors, you assign points that numerically represent the

description and range of the job.

Examples of compensable factors are skills required, level of decision-making authority, number of

reporting staff members, and working conditions.

Advantage This method is often viewed as less biased than other methods because the job evaluatorassigns each job's total points before the compensable factors become part of the equation.

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Disadvantages Subjective decisions about compensable factors and the associated points assignedmight be dominate. The job evaluator must be aware of biases and ensure that they are not represented

in points assigned to jobs that are traditionally held by minority and female employees.

Factor comparison

Job evaluators rank jobs that have similar responsibilities and tasks according to points assigned to

compensable factors. The evaluators then analyze jobs in the external labor market to establish the

market rate for such factors. Jobs across the organization are then compared to the benchmark jobs

according to the market rate of each job's compensable factors to determine job salaries.

Advantage This method results in customized job-ranking. Disadvantage Compensable factor comparison is a time-consuming and subjective process.

Market comparison

Job evaluators compare compensation for your organization's jobs to the market rate for similar

jobs. This method requires accurate market-pricing surveys.

The value of job evaluation

Job evaluation is a powerful tool in the compensation and benefits specialist's repertoire. Effective

job evaluation helps you gather information to develop job descriptions that meet the changing

needs of your organization. By implementing a successful job evaluation, you can develop an

equitable compensation plan and attract and retain high-performing and talented employees.

More information

Conduct an effective pay study Use market pay data to develop appropriate pay scales Develop a pay structure that reflects your company values

About the author Susan M. Heathfieldis a management and organization development

consultant who helps organizations strategically value and utilize people. Her company promotes

business success and profitability through consultation, executive and management coaching,

organization development strategies, human resources system and policy development, teambuilding, customized training, and writing.

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