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What Is Job Evaluation?

Published: Monday 12th October 2020

As a human resources professional, there are several functions of the human resources that require time and understanding to have a clear grasp of the concept. Job evaluation is one such procedure that all companies and corporates undergo on a constant basis. As HR managers and personnel, this is one of the jobs of the department to utilize a uniform evaluation method to gauge your employees to understand their job descriptions better to promote clarity in functioning. This blog will address all you need to know about job evaluation, its meaning as per HR standards and the top 5 methods used.

Businessman who rules his company remotely, like a freelancer doing Job Evaluation

Without wasting any time, let us get straight to it!

Job evaluation meaning:

The job evaluation meaning defined by Human Resources states that it is a procedure to determine the worth of a job compared relatively to other jobs in an organization.

Why is job evaluation required? 

It becomes a necessary procedure under the following circumstances:

  • To understand what job descriptions in an organization are similar.
  • To determine the appropriate compensation, salary, designation, and other pay particulars to promote job satisfaction among employees.
  • To help with the job specifications and to describe the role of various designations across the organizational structure for greater clarity.
  • To give employees a clear pathway in their careers while climbing the scales.
  • To help evaluate a candidate’s qualifications, compensation, and job description suitability during recruitment drives.

When is job evaluation required?

Job evaluation is a target constantly in motion in larger companies and corporate organizations where some event causes employee’s job description to change, such as:

  • Integration of new technology
  • Employees being handed over additional responsibilities
  • Downsizing an organization and laying off employees
  • Introduction of new programs or procedures
  • Granting higher authority over projects or teams
  • Choosing an employee as the team leader or giving them supervisory duties

It occurs regularly in organizations while addressing the themes above or even when there is a new position that is created.

Methods of job evaluation: 

There are several acceptable methods of job evaluation used across organizations. Below is a list of the 5 most frequented methods. Which method suits your requirement the most?

  • The ranking evaluation: The ranking  method is based on the value of the job as compared to the others in an organization rather than considering market compensation rates. This method is suitable for small-scale organizations due to the limited capital and hiring rates rather than large companies where paying the market value or competitive salaries for a long list of designations is the standard. It could work for larger companies only if they grouped their job classifications according to criteria such as the profession of the employees.
  • The grading or classification evaluation: This is the most convenient method of the lot, since it is straight-forward and does not waste much time. It involves classifying or grouping generic job traits to determine their level of expertise and responsibility. Pre-determined traits and roles are considered while comparing them with a particular class or grade of jobs. However, this method can cause a few inconveniences as not all job descriptions in a category will have uniform roles, especially as the designation reaches a level of seniority.
  • The point factor evaluation: This method takes stock of the most desirable or valued characteristics of a particular job description. These characteristics may be distinguished based on qualification, skill, and the degree of responsibility that an employee undertakes in a particular job. These characteristics are then given a numerical or weighted score to understand how close the professional is to their ideal job description in each designation. The disadvantage of this method is that it does not always reflect the market standard.  
  • The factor comparison evaluation: Like the point factor method, this method creates groups of primary job characteristics and adds a dollar value to the factor as compared to numerical or weighted points. It is more intricate and complicated which makes it difficult to explain to employees.  
  • The competitive market analysis evaluation: This method uses external pay data to compare the company’s job description and relative value. The data is used to understand the market value of a job. IT also helps them set up suitable compensation for the designation within the organization and clarify what the role entails.

The process of job evaluation is one of the core functions of the HR. We hope this blog clarified the meaning and methods of a job evaluation for you. To know more about HR jobs and processes, visit our hiring blogs!

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