Job Evaluation Guide for HR: How to Hire the Right Candidate
Equal pay has become a major issue for companies working on building their social profile with the public. Conducting a job evaluation is useful for HR departments to match appropriate pay with a given job description. Use this guide to job evaluation to improve your hiring of productive talent.
Defining Job Evaluation
HR departments design job evaluation systems with colleagues to determine the value of a job to an organization. This process of comparing jobs aims to arrive at a fair pay structure for all employees who hold a certain position. Many times HR teams work with unions to meet their goals.
Without an effective job evaluation process established, a company runs the risk of allowing an unstructured and imbalanced wage payment system to exist. Ultimately, a job evaluation leads to a ranking of jobs within an organization, affecting pay scales.
4 Phases of Job Evaluation
- Planning and diagnosis – Starting with a workshop, this process examines the scope of a job’s framework. This phase includes the planning of communication and data collection.
- Design and development – Identification of timeless elements and a look at the pay grade structure.
- Validation and modeling – Analysis of the data, leading to drafting a pay grade scale.
- Communication and rollout – Pay structure is implemented and made transparent to the staff.
Common Job Evaluation Methods
There are various ways to conduct a job evaluation. Each method has pros and cons, as it mainly depends on what works best for your company. Here are some of the most common job evaluation methods used by modern organizations:
- Ranking method – Analysts study a job’s impact on the organization, then rank the jobs in order of impact. Jobs at the bottom of the list are most likely to get cut first in an economic downturn. This method works best for small companies that offer less than 100 jobs.
- Job classification – This method ranks jobs through grade comparisons based on traditional standards. In a corporate environment, for example, jobs are ranked based on pre-determined levels, from CEOs to managers and operators.
- Factor comparison method – The knowledge and skills required to perform a certain job affect its ranking when using the factor comparison method. These positions require seasoned communication and decision-making abilities. Each knowledge or skill factor impacts how the job is ranked.
- Point-factor method – This method considers the problem-solving and critical thinking abilities required for a job. It’s best to use this method for organizations that hire dozens of technicians.
- Market pricing – Assessing pay rates and comparing them with market rates of similar jobs makes this method valuable. At the same time, market pricing can signal differences between a job’s internal value and market value.
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