A job evaluation is a systematic method that assesses the internal worth of a position. It is a deep and comparative analysis of a position’s duties and responsibilities, as well as the knowledge and skill requirements of the position. The definitions of a job analysis and job evaluation may seem almost the same but they are not to be confused. A job evaluation is conducted with the purpose of creating a chain of command and a structured pay grade. A job analysis, on the other hand, gathers information about a job so there could be a basis for recruitment and performance appraisals.
While it may seem like a lot of work, don’t let that intimidate you. Download our Sample Forms to use as a reference when conducting a job evaluation.
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When to Conduct a Job Evaluation
It is necessary to conduct a job evaluation when
- the organization is new and has not yet created a structured chain of command or pay scale,
- there is a new position that in the organization, and
- there is a change in job descriptions.
The reasons that a job evaluation is conducted in these instances are as follows:
- it assures the organization that they are hiring the candidates who are the best fit for a job; and
- it ensures that there is equity in pay and that employees will not be discriminated against because of their sex, orientation, or race.
Purpose of a Job Evaluation
A job evaluation is conducted with the goal of being able to weigh the value of a job as compared to other jobs in the organization. In other words, it lets you rank the jobs in the company according to their importance to the success of the company. The main reason why the Human Resource Department would invest time and resources in conducting a job evaluation is that a job evaluation is a tool that helps set a uniform and rational wage structure, and it helps eliminate unfair deciding factors when deciding on a wage rate for each position in the company.
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Methods in Job Evaluation
When conducting a job evaluation, ensure fairness by choosing one method and applying the same method to all positions that you are evaluating. Some methods of job evaluation are the following:
The Factor Comparison method evaluates positions by assigning benchmark positions based on compensable factors that are assigned a monetary value based on market rate. The wage of these benchmark positions are determined based on the total monetary value of the factors. Other jobs in the organization and their pay are then compared to that of the benchmark position.
The Point Factor is the most used method in job evaluation. Certain number of points are assigned to compensable factors. An appropriate pay level is decided upon based on these factors.
The Job Classification method simply groups similar positions into job classes based on a predefined job classification chart. These charts may be available in the government website of your country’s labor department.
The Whole Job Ranking system is perhaps the simplest method. Jobs are compared to each other and are ranked from highest to lowest.
Having a clearly established criteria for wage means having a better, more structured, and fair system. This not only benefits your employees but protects you from possible legal battles that cry out discrimination in the future.
For more evaluation forms, also see these Performance Evaluation Forms.
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