Job Evaluation - Key Concepts & Importance

What is Job Evaluation ?

Job Evaluation is the process of defining a hierarchy of jobs, depending on their complexity & relative worth in an organisation.

Job Evaluation exercise helps in :

• Compensation Design : Cluster roles into levels & grades to determine the pay ranges.
• Organisational analysis : Identify areas of weakness in the structures & formulate approaches to eliminate them.
• Career Development & Succession Planning : Defined Horizontal & Vertical roles
• Performance Management : Clear segregation of expectation to drive clarity.

Triggers of Job Evaluation :

• Periodical Refresher (organisations are evolving continuously)
• Organisation Restructuring
• Addition of new jobs
• Mergers & Acquisitions

Job Evaluation Process : Job Analysis & Job Description together with Job Evaluation makes the difference.

Point Factor Method of Job Evaluation:

It is the most common method of Job Evaluation now a days and provides a high level of consistency & objectivity, establishing internal equity for each job. It breaks the job into a series of compensable factors. An overall score is then computed as a sum of points against each degree for every factor. Based on these scores, an overall score is determined for each job & Grades are assigned.

Compensable Factors : These are the Job Attributes.

Typically Compensable Factors include :

• Input Parameters : Know Hows , Skills, Abilities & Applications etc.
• Process Parameters : Problem Solving, Communication etc.
• Output Parameters : Impact, Accountability, Responsibility etc.

Common Compensable Factors are as below :

• Point Factor method is HIGH on the following :

Perceived Internal Equity, Role Clarity, Perceived Fairness, Perceived Precision, Emphasis on Criticality of the job & reflects strategic objectives.

However, it is LOW on Linkage to Market & Rewards perspective.

Outcomes of Job Evaluation :

• Organisational Effectiveness (Identify Gaps or Overlaps in the structure)
• Succession Planning : Understand Relationships between roles.
• Career Development : Understand possible Career paths
• Performance Management : Understand & cascade Accountability
• Recruitment & Market pay : Linked to market data

There are proprietary methodologies of Job Evaluation -

1. Point Factor method - by Hay (now Korn Ferry) group
2. Global Grading system framework - by Willis Tower Watson
3. International Position Evaluation by Mercer
4. Aon's method of Job Evaluation is known as Job Link.

A scientific & transparent method of Job Evaluation helps HR to establish equity, fairess & clarity in the determination of organisation structure, grading - banding & pay ranges.