Value Added: Job Evaluation

This article was published in the March Issue of Employment Today.

Job evaluation – what’s it all about and what’s in it for you and your organisation? Christine Whelan and John McGill explain why it’s important to have a structure that reflects the value of all the jobs in your workplace.

People have many and varied views on job evaluation.  For some it smacks of judging people and putting them in boxes, for others it’s the best thing since sliced bread and their organisation wouldn’t be the same without it, and for others again it’s an inflexible approach to organisational structure.  So what is it, in fact and why would you use it?

For starters, as soon as you decide you need to employ someone to fill a position in your organisation, you start the process of job evaluation, whether you’re aware of it or not.  In all likelihood the first thing you’ll do is decide what job it is you want done – something that seems pretty straightforward.  Then you’ll have to decide what you’re going to pay for that job.  And how will you do that?  You’ll need to decide what value the job has to you or your organisation. 

The Oxford English Dictionary defines evaluation in this way: The making of a judgement about the amount, number, or value of something; assessment.  In taking that first step of deciding on the job’s value, you’re already making an evaluation.  And you’re likely to look at this in a few ways.

You’ll probably think about how important the job is – whereabouts in the organisation you think it fits.  You’ll think about the tasks you expect to be carried out and probably how difficult they are – will they need someone with a degree, or could a school leaver do the job either with just a little training, or with a few years’ experience. Is the job going to need to manage people in other roles and will it perhaps have a budget to manage?  All these elements, or factors will be part of your evaluation and will impact on the decision you make about what the job merits in terms of remuneration.  It may also prompt you to consider whether it is actually the job you’re currently paying for or an individual who happens to be in that job.

When you have a small business or organisation, it’s relatively easy to work through this process.  You’re likely to have a pretty intimate knowledge of each of the jobs and how they fit relative to other jobs in the organisation.  It’s also not too hard to have a look at other similar roles in the market and figure out how they get paid, so you can make the remuneration decisions without too much concern.  We call this way of evaluating jobs and making remuneration decisions benchmarking.  It’s a system that works well for very small organisations where roles are well understood, although it is dependent on the pay information being supplied based on roles that are equally well understood and are genuinely similar to your organisation’s role.

What happens though as the organisation grows and develops more and increasingly varied layers?  At this point many organisations start to realise that simple benchmarking isn’t working so well for them anymore. Once you reach this stage it becomes important to consider how you can create a structure that reflects accurately the value of all the roles in your organisation and how they fit relative to each other.  With such a structure it’s possible to ensure that your remuneration decisions are appropriate both internally and externally, and that as a result employees are confident that they are paid fairly.

About Job Evaluation

The most effective way to create such a structure is through careful, systematic evaluation of all the roles in your organisation in order to establish internal relativities and to create a mechanism by which you can access relevant and robust remuneration market data. 

Strategic Pay defines its own job evaluation system in this way: A systematic process for establishing the relative sizes of jobs by comparing jobs or job content on the basis of common criteria.  While there are many job evaluation systems of various kinds in the market, we believe that this definition would, or should, apply to each of them.  The idea of an evaluation system is that it works for both employer and employees.  Ideally, employers can use it to ensure that their organisational structure is clear and they can access remuneration data easily.  Employers can also have confidence that a job evaluation based system is a sound basis for the allocation of their salary budget – a major cost for most organisations. Employees can see that their jobs are fairly valued and can understand how their remuneration level is set.

There are a few important things to remember about job evaluation. While it is systematic and analytic, it is not a science – there is always an element of judgement involved in carrying out an evaluation.  It is a comparative process – at the end of the process the job ‘size’ arrived at should reflect the position or level of a job within the organisation.  And critically, the process is about the job, not the person in the job.

So how do evaluation systems work? Most evaluation systems consider pretty much the same elements, or factors, in a job, although they may be grouped and named differently in different systems.  Common to most systems are: the level of education and experience required; whether or not the job manages or supervises other employees; whether there is a financial management component (does the job have budget responsibility or the ability to spend money?); what level of complexity there is (can someone learn the basics of the job in a matter of hours, or might it take years to become competent?); and what sort of problems the job holder is likely to come up against. 

The job evaluation process also produces a record that can be used at a later date if the job is believed to have changed in some way. This is particularly useful where organisations may be changing over time. 

In carrying out an evaluation, an evaluator will consider each of the identified factors against a common set of criteria, assigning a score to each factor.  These scores will then be used to calculate a formula based final outcome or job size.  How will they get this information?  Ideally from good position descriptions!

Developing your Structure

If you decide that it is probably time for your organisation to use a job evaluation backed remuneration structure, one of the first things you need to think about is how good your position descriptions are.  Are you confident that they accurately reflect the jobs in your organisation?  Do they really have enough detail to describe the job well – or are they unduly long and detailed task lists.  If your organisation is one of those that has struggled over the years to keep up with rapidly changing roles and their position descriptions, talk to your remuneration market provider – they should be able to provide you with questionnaires to complete that will both provide the information needed to carry out good evaluations and as a bonus give you a great starting point for revised position descriptions.

You may decide that you want consultants to carry out all your job evaluations, in which case you simply provide the position descriptions or questionnaires and wait to answer any questions before finally receiving the completed evaluations, provided in a form that will suit your organisation.  This is often in the form of a matrix, so you can see the whole depth and breadth of the organisation and all the internal relativities across departments, groups or units.  This process can be hugely useful when reviewing your organisational structure. 

Alternatively, you may decide that it would be a good thing for people in your organisation to be trained in your chosen evaluation system.  This can be a significant advantage in enabling the organisation to take ownership of its own process.  Some organisations will train a number of employees from different areas of the organisation so that they can establish evaluation committees, creating an environment where ownership is not just with management or HR, but is shared across the organisation. 

Seeing the Results

Of course there’s no point in going to the trouble of evaluating all your jobs (not to mention updating position descriptions) unless there’s a useful outcome.  The useful outcome you’re looking for is a job evaluation based remuneration system that will be acceptable to both employer and employees. 

So, why would you use job evaluation in your organisation?  For it to be a stepping stone to creating a sound, consistent and easily understood job structure, or architecture, which facilitates a fair, transparent and equitable remuneration and reward system, enables effective workforce planning that meets the needs of the organisation and provides tools for both career progression and succession planning.  As a bonus, in doing the preliminary work for the evaluation process, you will also end up with clear and relevant position descriptions that genuinely align to all your roles. 

Whatever shape your organisation takes – hierarchical with many levels of authority, or flat structured with fluidity of movement within the organisation (think of today’s “agile” workplaces) – job evaluation is a tool that you can use to ensure that your ‘people’ structure is working effectively for your business.

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