Throughout my Compensation career I have never enjoyed job evaluation. As soon as I progressed high enough in my organization I delegated responsibility to a subordinate and washed my hands of it. Job evaluation is a thankless task, with the evaluator subject to criticism from all sides.
- If you agree with an evaluation request, you're only admitting to the obvious.
- If you disagree and value the job differently, you clearly don't understand the job.
- The subjective nature of the process is viewed as suspicious.
- Job evaluators don't receive Christmas cards.
In spite of my disdain for the process the act of evaluating jobs has been found useful by companies since the 1930's.
- As a method to establish a hierarchy of job importance (A is bigger than B, B is bigger than C, etc.).
- To explain the relationship of jobs, one to another (A is how much bigger than B?).
- To set employee expectations and manage the Reward process (price the jobs).
Job Evaluation does have other purposes as well. The internal assessment sets career progression steps and assists with organizational development.
Despite these worthy contributions the criticism of the process continues from several directions:
- Job descriptions are often poorly written, with content manipulated by managers to gain advantage.
- Pressure is often brought to bear on the Evaluator to increase a rating.
- Evaluation language, forms and procedures are often complicated and confusing to employees and managers alike.
- Senior management support for the integrity of the process is often limited.
- Employees are skeptical of an inherently subjective process where decisions are made by someone from outside their functional area.
For those who use a job evaluation process, a further step of valuation is to place a price tag on each position - and to do that you need to conduct a study of the competitive marketplace.
Here is the one process that gets you straight to the core of the matter - placing a monetary value on your jobs. Some of its advantages as an evaluation process are:
- It's more objective, especially if using multiple survey sources.
- It's easier for management to accept, vs. the judgment of “some analyst in HR.”
- It's easier to defend results to otherwise biased managers.
- The evaluator is subject to less criticism.
Most companies follow both processes, job evaluation and then market pricing. Does that two-phased effort add value? I have my doubts, especially if the prime goal is to establish a salary structure.
What if the marketplace indicates a job is worth ~$50,000, but as a result of your evaluation process the current midpoint is either much higher or much lower? Ignoring the market could prove costly, in terms of either dollars or employee disengagement. But if you follow competitive practice – then what's the point of your internal, job content-based evaluation process?
When faced with a choice most companies would make the change. Dealing with reality, they would say. So at the end of the day the true indicator of the value placed on your hierarchy is through market pricing.
Another concern is that while Job Evaluation can be a tedious process it isn’t a sufficient end in itself. You still have to price the jobs to create an effective salary structure. Survey data needs to be “interpreted” by an analyst in order to ensure position matches are appropriate and the subsequent data properly integrated. We call this “massaging the data.”
Some examples of how market data can be massaged between the survey source(s) and the salary structure:
- When you cluster diverse market data points into a graded salary structure.
- When you are not able to afford competitive rates you may lower the value of each position and create a below market salary structure.
- When you move jobs into certain grades to reflect the organizational realities of your company (the senior analyst must be either one or two grades higher than the core analyst).
- There will always be “favored sons,” positions that must be slotted a certain way in your hierarchy, regardless of market data.
If your goal is to price the internal and external value of your positions you don't need a job evaluation process, but you do need market pricing. I would suggest a market pricing effort first, to establish competitive pay levels, and then if desired for other purposes follow up with some form of whole job evaluation process (keep it simple). Finally, the evaluator(s) should recommend a degree of massaging to ensure that the final results “make sense,” both from an internal as well as external viewpoint.
Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations. He is also associated with several HR Consulting firms as a contributing consultant. Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation. He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.
Creative Commons image, "Complexity 3," by michael.heiss