HR MANAGEMENT - What Are the Three Basic Methods of a Job Evaluation?

What Are the Three Basic Methods of a Job Evaluation?

by Amie Martin, Demand Media

By using a job evaluation process in your business organization, you assess the relative content and value of positions and determine equitable, understandable and competitive compensation. Job content is evaluated based on work type, skills and knowledge required; value is evaluated based on each job's contribution to company goals. Three of the most commonly used methods of job evaluation, upon which other methods are based, can be customized to your company's specific needs.

Ranking

The ranking method ranks each position within your organization, from highest to lowest. Rather than a job being assigned to a group, which is the classification method, or totaling points assigned to the job's factors, which is the points method, each job is assigned a rank based on the overall value and complexity within your organization. The hierarchy of a company organization chart is a visual example of the ranking method. This method is well-suited for small businesses because of its simplicity, but it can be difficult to establish and maintain in larger, more complex organizations.

Points

The points job evaluation method uses an established scale -- whether customized or following a template -- of key job factors and associated maximum points for every position within your organization. Examples of factors include skills, accountability and effort. Each factor may have sub-factors; skills, for instance, may include sub-factors such as education and training. Once you have approved your organization-wide factors and developed a point system, evaluate each position individually. Jobs are finally ranked based on total number of points, from highest to lowest, and compensation is assigned accordingly. Jobs with similar point totals generally have similar pay scales.

Classification

Classification uses categories, or classes, of similar job content and value. Examples of categories include executive, managerial, skilled and semi-skilled. The number of categories and their relative content, value and associated pay grades are determined by your organization. This method works well for large organizations, such as government agencies and worldwide corporations with numerous locations. Jobs within the same class have comparable compensation packages.

Considerations

To some extent, the job evaluation process is often subjective, regardless of the method used. Use the same method for everyone in your organization. If you have job descriptions already in place, use them with your job evaluation method and revise them as necessary; if not, use this opportunity to develop them. Job descriptions should be in accord with the placement of the job's ranking, total points or classification. Talk to your managers and employees when reviewing or creating job descriptions and implementing your job evaluation method; they can provide up-to-date, direct and valuable input. The job-evaluation process evaluates positions, not the people who hold them. By openly involving your team in the process, you may prevent negative feelings toward it that could, in turn, affect morale and performance.