No One likes Job Evaluation

Job evaluation, Pay Structure, Pay and Millennials, HR Consulting, Pay Planning

No one likes job evaluation. HR people treat it as a necessary evil and delegate to the lowest competent level while hunkering down to receive criticism when it is complete because the job is always graded too low! Management of course already knows where their job should be positioned and therefore the whole exercise is a waste of their time. The collective wisdom is unnecessarily complex, costly, and time consuming.

What then was the business imperative that caused the creation of this hated process?

Every organization has its unique market attribute, the one that differentiates it from its competition, that “thing” that the founder recognized was missing in similar products or the market.

That competitive differential may rely on one or two critical skills and the roles that contain them sustain the business and consequently make them more important than other roles. In the early days a founder knew all of the jobs in her organization ensuring that those with superior value were cost effectively recognized. Over time, as the business grew that became more difficult and there needed to be rules and a system that others could reference that logically organized work but that continued to reward those special roles in a superior but cost effective manner.

In the dark fog circling administration, points, and factors being able to distinguish roles that differentiate and sustain is the genesis of job evaluation and in turn frames how jobs are paid relative to competitor organizations.

Typically at about 100 employees employers recognize that jobs other than those key roles, in different functions have similar value to the organization and it makes sense to group them into grades and develop pay ranges for each grade.

Rules in the form of company pay policy were developed with regard to how individual’s salaries evolved through the range, the size of increase relative to the level of performance and how salary inflation affected ranges etc.

Of course entrepreneurial and creative practitioners have over time marketed the image of job evaluation into a pseudo-science, a standalone must have icon of any HR system but it really doesn’t need to be that complicated or costly and above all, any system should embody the needs and complexity of the business it was designed for.

This brings us to the two things we want to say in this blog:

  1. JE is a good thing unless it is a burden for your organization then it’s a bad thing. Modify (not reinvent) its complexity to make it a useful organizational tool again that helps with managing pay, predicting payroll costs, budgeting pay changes, logical career advancement etc.
  2. We have come full circle. As well as continuing to highlight and reward in a disciplined manner those roles that are more important to the organization (and from time to time senior managers should revisit those functions to confirm that they continue to fulfil that role) JE also enables objective, fair, and unbiased compensation for all employees whether their roles critical to the business or not.

In today’s workplace external initiatives are conspiring to make JE more important which makes it an imperative that the system you employ is the best suited to your organization. Pay transparency, pay equity, engagement, and pay discrimination can all be more easily managed, responded to, or addressed through an organizational framework fueled at its core by an objective, unbiased JE system. Compliance requirements and discussions with regulatory authorities will proceed more positively when these are present. Managers will applaud the simplicity afforded in determining consistent employee promotional and performance adjustments. Employee engagement and attraction will be advanced with the knowledge that teammates are being rewarded equitably and fairly. An objective, transparent JE system will enhance an employment brand in the competitive labor market.

There is a cost to setting up or modifying a system but the advantages will positively reward this investment. The cost of pay administration will reduce; employee productivity will rise through increased engagement and contribute to lower turnover costs.

Next time you have to sit in on a JE think of the value that you are creating for the organization.

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