Job Evaluation—Three Common (and Good) Methods

Strand, owner of consultancy HR Dynamics Inc., offered his comments on the three methods at a recent webinar hosted by BLR/HRhero.

Ranking Method

This is non-quantifiable and subjective, but is a basic simple approach, says Strand. You arrange all jobs in rank order of their relative duties, responsibilities, qualification requirements, that is, their “importance” to the organization, he says. The method is best used for smaller organizations with fewer jobs (under 30‐40); it may be awkward and unwieldy for larger companies with a large number of different jobs.

A simple example, ranked high to low:

• Department Manager
• Section Supervisor
• Team Leader and Task Specialist (equivalent jobs)
• Administrative Assistant
• Clerical Assistant
• Receptionist

Classification Method

The classification method is another non-quantifiable approach in which you create job grades with “generic” position descriptions, usually a limited number up to 15-20, says Strand. The new positions are slotted into the “best” fit grade, based on responsibility. If a position falls between two grades, you have to make a judgment.

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Here are three sample levels in a classification system; there would be many more in a real company, says Strand.

• Level 3: This position requires 2 years of college-level education and 2 years of relevant experience. Some leadership or technical experience is necessary. Employee will be involved in problem solving on a daily basis.
• Level 2: This position requires some college-level education and some understanding of commonly used office computer applications. Employee will be involved in minimal problem-solving activities.
• Level 1: This is an entry-level position requiring minimal education (high school) or skills. Employee will be provided on-the-job training and will work in an office environment. Nearly all job activities are routine and guided by established procedures.

Point Method

The point method is a quantifiable approach that is widely used in the private sector. It’s easy to use once set up, Strand says, but it is time-consuming (and therefore expensive) to develop. Once the compensable job factors developed, positions are compared to the factors and the appropriate number of points is assigned. The total points slot the position to a grade.

Examples of factors that might be considered:

• Knowledge & Skills
• Responsibility/Impact on Organization
• Communication/People Contacts
• Job Complexity
• Teamwork
• Supervisory Responsibilities (Direct Reports)
• Budget managed
• Work Environment (Physical Effort, Hazards)

Strand notes that his clients generally have anywhere from 11 factors to 28 factors. Generally, the more factors, the more accurate the system is. For example, a factor might be “autonomy,” defined as the degree to which a supervisor needs to directly oversee this position and the frequency of checks needed for this work.

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Points then might be assigned, for example:

• 3 points when work instructions are specific & detailed and work is checked often.
• 7 points when work instructions are outlined/explained in general terms. Work is reviewed regularly.
• 11 points when task methods are left mostly to employee judgment and work is reviewed occasionally.

After doing a point analysis on all the factors, positions might fall as follows:

All three job evaluation methods described above are recognized and valid job evaluation methods that provide a position hierarchy within an organization. However, says Strand, they do NOT consider external pay practices. Eventually all methods need to match to the market place.