The Definition of Job Evaluation

Job evaluation is a formal and systematic approach to analyzing jobs and categorizing them in regard to their relative worth in an organization. Job evaluations are usually based on compensation factors (skill set needed to perform the job, working conditions and job duties) rather than on the employee.

Misconceptions

Job evaluations are not the same as performance evaluations. Performance evaluations are directly for evaluating the performance of an employee for incentive purposes, whereas job evaluation determines the pay rate for a job.These two terms are easily mistaken to mean the same; however, they have two different names because they have two different purposes.

Significance

Conducting a job evaluation is critical as it aids in determining the worth of each job in an organization. In addition, it helps to ensure internal equity is being maintained. A successful evaluation is conducted by a job evaluation committee, which typically includes several employees whose task is to evaluate the worth of each job using compensation factors. Once completed, the evaluation will result in a wage or salary structure.

Considerations

There is one basic principle to consider when conducting a job evaluation. Jobs that require more qualifications, responsibilities and multifaceted duties should receive higher pay than jobs with lesser requirements. In order to begin the process, compare jobs that are related one to another.

Procedures

There are two approaches that you will use as an aid in comparing jobs: the intuitive approach and the compensation factors. Which approach you use is completely up to you; however, you need to be aware of the advantages that one may carry over the other.

The intuitive approach will compare jobs by importance and will not go beyond that. The compensation factor takes jobs and compares them based on compensation factors. With this approach, you take jobs and compare them with factors that they have in common. These factors will expose what factors the jobs have in common and result in determination of pay for each job.

Warning

Some employers make up their own compensation factors to use. However, the majority of employers will use compensation factors popularized by federal legislation. One important factor to understand is that job evaluations are subjective and judgmental.They are based on your own logical way of thinking; but, be sure you are conforming to your local and state laws.

References

• Human Resource Management; Gary Dessler; 2008

Resources

• Human Resource Guide