Everything you need to understand about job evaluation

CARL TAPI

All jobs in an organisation need to be evaluated to ascertain their relative worth so that an equitable salary structure is designed in the organisation. This is necessary for sustaining cordial relations within and between employees and employers. Hence, there is a need for appreciation of intricacies of the job evaluation in organisations.

 Once a candidate is placed in a job, the person needs to be duly compensated for the job he/she performs. In the pursuit of equal pay, there should be a consistent and systematic relationship among base compensation rates for all the jobs within the organisation. To achieve this equity there is a need for job evaluation.

 What is job evaluation?

It is a systematic process of determining the worth of a job to other jobs. The objective of this process is to determine the correct rate of pay. It is therefore not the same as job analysis. Rather it follows the job analysis process, which provides the basic data to be evaluated. In simple words, job evaluation is the rating of jobs in an organisation. This is the process of establishing the value or worth of jobs in a job hierarchy and compares the relative intrinsic value or worth of jobs within an organisation.

 The main objective of job evaluation is to ensure equitable remuneration for the relative worth of a job. As per the ILO Report 2017, the aim of the majority of systems of job evaluation is to establish, on an agreed logical basis, the relative values of different jobs in a given plant or machinery, i.e., it aims at determining the relative worth of a job. The principle upon which all job evaluation schemes are based is that of describing and assessing the value of all jobs in the firms in terms of several factors, the relative importance of which varies from job to job”. The objectives of job evaluation are to:

• Establish a standard procedure for determining the relative worth of each job in an organization;
• Ensure equitable wage for a job and reasonable wage differentials between different jobs in a hierarchical organisation;
• Determine the rate of pay for each job which is fair and equitable with relation to other jobs in the plant, community or industry;
• Eliminate wage inequalities;
• Use as a basis for fixing incentives and different bonus plans;
• Promote a fair and accurate consideration of all employees for advancement and transfer;
• Provide a benchmark for making career planning for the employees in the organization.

The job evaluation process

Job evaluation is a technique to rank jobs in an organization based on the duties and responsibilities assigned to the job. The job evaluation process results in a job being assigned to a pay grade. The pay grade is associated with a pay range that is defined by a minimum and a maximum pay rate. A model of the job evaluation process with the following steps is presented below.

Step One – Job analysis 

Job analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of this analysis are job descriptions and job specifications. The job incumbent writes the job description. If there is an immediate supervisor, s/he reviews it, and they both sign it. Instructions and additional assistance are available from Human Resources if needed. The job description is a snapshot of the job as it presently exists, reflecting the current duties and responsibilities of the job and/or the incumbent.

Step Two – Approval

The Head of Department reviews job descriptions and, if s/he concurs, approves the responsibilities, requirements, and departmental organisation contained within a job description presented for a new evaluation, and signs it. If the vice president does not concur with the contents of the description, it is returned to the supervisor for changes.

Step Three – Review

Human Resources reviews the job description as submitted with the supervisor before evaluation by the Job Evaluation Committee (Step 4). Human Resources help ensure that there is consistency in the job descriptions and titles by editing them for clarity and format. If the Human Resources Office makes changes, the job description is returned to the supervisor and incumbent for signature before being presented to the Job Evaluation Committee (Step 4).

Step Four – Evaluation

The Job Evaluation Committee (JEC) is a multimember committee that is representative of all departments and levels in an organisation. JEC ensures equity among jobs through the use of established, consistent criteria for evaluation and prevents escalation of the job evaluation grades by validating changes in job content presented for review. Members of JEC receive in-depth training on job evaluation and utilize a consistently applied point system for the evaluations.

 Job Grading

There are many job evaluation systems on the market; some are free and some are franchised. The job evaluation systems used in the Southern African are the Peromnes, Decision Tree, Paterson, Hay, and the Castellion systems, amongst others. There are many other systems, some in-house designed and some open market.

As the job evaluation is mostly a judgmental process that would probably use one of the job evaluation methods, which are commonly grouped into two major categories: quantitative and non-quantitative.

Non-Quantitative Methods

Non-quantitative methods call for the evaluation of a whole job relative to other jobs or general descriptions of jobs within an organisation. The main role of the evaluator is to determine which of the jobs is more important or worth more to the organisation. The major types of non-quantitative job evaluation procedures are ranking and job classification.

 Ranking Method of job evaluation

This is the simplest form of job evaluation. The method involves ranking each job relative to all other jobs, usually based on an overall factor like “job difficulty‟. Each job as a whole is compared with other and this comparison of jobs goes on until all the jobs have been evaluated and ranked. All jobs are ranked in the order of their importance from the simplest to the hardest or from the highest the lowest. The importance of the order of a job is judged in terms of duties, responsibilities, and demands on the job holder.

 Job Classification or Grading Method

There are several ways to categorize jobs. One is to draw up a class description and place jobs into classes based on their correspondence to these descriptions. Another is to draw up a set of classifying rules for each class and then categorise the jobs according to these rules. The usual procedure is to choose compensable factors and then develop class or grade descriptions that describe each class in terms of amount or level of compensable factor(s) in jobs.

Quantitative Methods

Quantitative methods divide jobs into components and require absolute or relative value judgments about how much of a component a particular job requires. The two most popular types of quantitative systems are the point rating and factor comparison methods.

 Point Rating Method

This is the most widely used system of job evaluation. The method evaluates the compensable factors of each job. It involves a more detailed, quantitative, and analytical approach to the measurement of job work. Under this method, jobs are broke down based on various identifiable factors such as skill, effort, training, knowledge, hazards, responsibilities, and so on. Thereafter, points are allocated to each of these factors. Weights are given to factors depending on their importance to perform the job. Points so allocated to various factors of a job are then summed. Then, the jobs with a similar total of points are placed in similar pay grades. The sum of points gives an index of the relative significance of the jobs that are rated.

Based on a study conducted by IPC in 2020, the most widely quantitative method used for job evaluation is the Paterson system (46.84%) followed by the Castellion system (13.92%). Other systems currently being used in Zimbabwe include the Hay system (8.86%), In-house systems (15.19%), and Peromnes (3.80%). 6.33% of the participating organizations do not use any job evaluation system.

Let us look closer at the Castellion and Patterson Systems which are the most widely used systems.

What is the Castellion Job Evaluation system?

The Castellion Job Evaluation System was developed by SABMiller as an internal grading system but it has since become widely used across industries and sectors. Castellion System is a combination of factor comparison and points rating methods. A major underlying concept of the system is the “period of discretion” developed by Professor E. Jacques. There are three major Castellion factors which are Effort, Responsibility, and Competence, each with subfactor components.

Advantages of using the Castellion system

• The system is user friendly and easy to understand regardless of the level an employee may be;
• The System entails the analysis of various factors that relate to the job i.e., education, decision making, main duties, and responsibilities, etc. that are important in deducing the factual worth of a job.

Disadvantages of using the Castellion system

• It can be very effective but is not all that easy to explain to lower grade workers.
• The Castellion grading system is prone to grade distortions in instances where job descriptions are not properly described.

What is the Paterson Job Evaluation system?

The Paterson decision band method is a system of job evaluation based on the method of job classification. The method was developed by Professor. The Paterson system is built on the assumption that the most important function of an employee is his/her ability to make decisions. Decision-making is a common factor of remuneration that is present in all jobs and which makes it possible to group jobs in general, uniform categories.

According to the Patterson system, all jobs can be grouped into six decision-making bands based on the level of complexity of the decisions that job incumbents are required to make. The levels range from the completely defined decisions of band A to complex policy forming decisions in band F. Thereafter the decision-making bands are subdivided according to a coordinating factor.

Advantages of using the Paterson system

• It is a simple system that is easy to understand and implement.
• it is cost-effective and internationally recognized

Disadvantages of using the Paterson

• Only one factor is used to evaluate all jobs.
• There is a lack of uniformity of procedures for interpreting and applying sub-grades.
• Problems are experienced in grading complex management hierarchies.

Managerial implications of Job Evaluation

Job evaluation has assumed greater significance in organizations currently due to its multifaceted usefulness in human resource management. It establishes the worth of a job in comparison to other jobs and indicates a hierarchy of jobs in the organisation. The job evaluation is also useful for the human resource department for structuring organisational activities as well as developing relationships among all jobs. It avoids industrial relation problems between employees and employers by designing commensurate compensation without any inequality in wage and salary structure.

Human Resource Managers when launching job evaluation exercise must take note that only the job that should be evaluated and not the person performing it, the purpose of the evaluation must be clearly defined and that sufficient resources are allocated for the exercise.

Principles of Job Evaluation

Job evaluation has certain principles that should be adhered to. These principles are not only directives of proper job evaluation but also provide clarity in the process of evaluation. According to Kress, these principles are:

• Rate the job. Each element should be rated based on what the job itself requires;
• The elements selected for rating purposes should be easily explainable in terms and a few in numbers as will cover the necessary requisites for every job without any overlapping and;
• The elements should be clearly defined and properly selected.

Change Management in Job Evaluation

Change management is the process, tools, and techniques to manage the people side of change to achieve the required organisational outcome. Change can be more effectively managed with specific tactics developed for each of the states of change.

Change management plays an increasingly important role in modern organisations. Change management focuses on the ‘people side’ of change. Many organisations use change management methodologies to enable their Job Evaluation exercises to work.  A key part of managing change in an organisation is to engage those people affected by a change initiative through sensitisation meetings and roadshows. Staff will be involved in the change process eventually, therefore communicating and engaging with staff about a job evaluation exercise early helps lay the groundwork for its later success.

 Resistance is inevitable in any change initiative because people often find it unsettling being asked to work in new and different ways. So, change managers can often expect a denial reaction from the staff. It takes time to overcome those reactions. When change managers are transparent from day one, the less resistance they are likely to face.

Limitations/Drawbacks of Job Evaluation

Despite many advantages, job evaluation suffers from several limitations.  Job evaluation is susceptible because of human error and subjective judgment. While there is no standard list of factors to be considered for job evaluation, there are some factors that cannot be measured accurately.

When job evaluation is applied for the first time in an organization, it creates doubts in the minds of workers whose jobs are evaluated and trade unions that it may do away with collective bargaining for fixing wage rates.

Non-quantitative job evaluation methods are often looked upon as suspicious about the efficacy of methods of job evaluation. It is also important to note that job evaluation is a time-consuming process requiring specialised technical personnel to undertake it and, thus, is likely to be costly also.

Given the changes in job contents and work conditions, frequent evaluation of jobs is essential. This is not always so easy and simple. Job evaluation is not found suitable for establishing the relative worth of the managerial jobs which are skill-oriented. But, these skills cannot be measured in quantitative terms.

Carl Tapi is a Consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm. https://www.linkedin.com/in/carl-tapi-45776482/ Phone +263 (242) 481946-48/481950 or cell number +263 772 469 680 or email: carl@ipcconsultants.com  or visit our website at www.ipcconsultants.com