Job evaluation is the systematic process of determining the relative value of different jobs in an organization. The goal of job evaluation is to compare jobs with each other in order to create a pay structure that is fair, equitable, and consistent for everyone. This ensures that everyone is paid their worth and that different jobs have different entry and performance requirements.
Job evaluations are developed by HR, often together with workers unions and other social partners and commercial consultancy companies.
The advantage of job evaluation is that it does not take into account the qualities of the job holder. According to a report on this topic by the European Commission, the relative worth of a job is assessed irrespective of the qualities of the specific job holder.
The relative worth corresponds to a ranking, which in turn corresponds to basic pay brackets or scales (called wage grids). Personal qualities of the job holder (including seniority, education level, tenure) are rewarded by an entitlement to higher steps within the applicable pay bracket.
Job evaluation requires some basic job analysis to provide factual information about the jobs concerned. The starting point is often the job analysis and its resulting job description. Based on this, the job is evaluated. One of the key criteria in the evaluation is the added value of the job to the organization. Based on this evaluation, the job is added to the job structure. The resulting structure ensures pay transparency and equity between gender and minorities.
The Job Evaluation Process: 4 Steps
The job evaluation process involves four steps. These steps are:
- Planning and diagnosis
- Design & development
- Validation & modelling
- Communication & roll-out
Phase 1: Planning & Diagnosis
In this phase, the job evaluation project is started with an initial workshop. During this workshop, the evaluation is scoped and approaches for evaluation are decided on.
In terms of scope, decisions need to be made on cost, time constraints, the degree of rigor applied, administration, tooling & software, how much external help is required, how to build on previous projects, and how job evaluation will be used to support equal pay.
The organization also needs to decide on their job evaluation scheme. There are multiple schemes with different degrees of customization:
- Proprietary: This is an existing framework, created by consultants. It has been tried and tested, is easy to implement, and requires low internal effort. The con is that it may not suit every organization and creates dependence on the supplier.
- Customized: This builds upon an existing framework like an (outdated) job framework that is already in place and builds on top of that. This provides a good starting point, leads to faster implementation, and helps to create employee buy-in. Its biggest con is that the framework needs to be sufficiently revised as it may otherwise not suit the organization.
- Tailor-made: This is a fully customized scheme, developed in-house with the help of external advisors. It leads to a great fit with the organization, the participatory process leads to buy-in and enables alignment with a competency framework. The drawback is that the process will take longer and is a costly exercise.
Next, benchmark jobs are identified, data collection is planned, and a communication plan is created.
Phase 2: Design & Development
In the next phase, the evaluation elements and levels are determined. This often happens through a workshop. In this phase, it is important to identify elements that are relatively timeless. Keep in mind: the job scheme is relevant for as long as the elements it is based on are relevant.
Because of the cost and effort to create a job scheme, they could stay relevant for well over 25 years. In our article about job classification, I give the example of Russian organizations that still work with the frameworks provided by the state during the USSR.
Once this is all done, data on the different roles in the organization is collected.
Phase 3: Validation & Modelling
In the third phase, the results from the data collection are analysed and the weightings of the different elements are discussed. This may require some fine-tuning as initial definitions may skew the results.
Next, a pay grade structure is drafted, and jobs are categorized. There will always be a set of jobs that do not match the pay grade structure. An example could be specialist roles in artificial intelligence and machine learning that are very scarce while crucial for the company’s future. These may have to be put on a different salary scale. The risk here is that these jobs may be much more abundant in say 10 years, so by then they may be overcompensated so this may have to be revised later.
Phase 4: Communication & Roll-out
In the final phase of the job evaluation process, the structure is implemented. Best practices are to explain everyone affected why their pay grade structure may have changed. There should also be an opportunity to appeal decisions that are perceived as unfair. Here it is important to hear and investigate what employees have to say.
This phase will be easier if there is buy-in from the organization. Also note, lowering salaries for workers may not be possible as wages could be protected under national labour laws or it may prompt people to leave the organization. Taking all of this into account will be an administrative challenge.
Take a look at the detailed post on the topic -
