Job evaluation

Revised November 2009

ref: wwww.cipd.co.uk

This factsheet gives introductory guidance. It: offers a definition of job evaluation comments on when it is used looks at the two main types of scheme - analytical and non-analytical highlights some of the major schemes and providers suggests an implementation process includes the CIPD viewpoint.

What is job evaluation?

Job evaluation can be defined asa method of determining on a systematic basis the relative importance of a number of different jobs'.1 It's a useful process because job titles can often be misleading - either unclear or unspecific - and in large organisations it's impossible for those in HR to know each job in detail. As a rough guide, job evaluation, like many pay management techniques, tends to be desirable in organisations once the number of employees exceeds around 50. It usually becomes essential once employee numbers increase to more than 250. But each organisation is different and the use of job evaluation techniques will depend on individual circumstances. Our most recent reward management survey finds that just under one third of the sample use job evaluation. By sector and size, job evaluation is far more prevalent in the public and voluntary sectors and among larger employers. The survey also finds that just under a quarter of employers plan to introduce a scheme for the first time this year, while a further 13% plan to amend their existing scheme.

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When to use job evaluation

Job evaluation is often used when:

determining pay and grading structures ensuring a fair and equal pay system deciding on benefits provision - for example, bonuses and cars comparing rates against the external market undergoing organisational development in times of change undertaking career management and succession planning reviewing all jobs post-large-scale change, especially if roles have also changed.

It is essential to have clear, detailed and up-to-date job descriptions on which to base the job evaluation.

Types of job evaluation

There are two main types of job evaluation: analytical schemes, where jobs are broken down into their core components, and non-analytical schemes, where jobs are viewed as a whole. The use of an analytical scheme offers a better defence if a claim is made to an employment tribunal for equal pay for work of equal value.

Analytical schemes
These offer greater objectivity in assessment as the jobs are broken down in detail, and are the ones most often used by organisations. Examples of analytical schemes include Points Rating and Factor Comparison.

Points Rating
This is the most commonly used method. The key elements of each job, which are known as 'factors', are identified by the organisation and then broken down into components. Each factor is assessed separately and points allocated according to the level needed for the job. The more demanding the job, the higher the points value. Factors usually assessed include:

Knowledge and skills work experience qualifications external qualifications

People management human relations skills ability to deal with work pressure

supervisory responsibility

specialist training

Communication and networking Freedom to act social skills presentation skills depth of control diplomacy supervision received Decision-making judgement initiative

Working environment knowledge of special working practices

breadth of management skill required

analytical ability Financial responsibility budgeting

Impact and influence efficiency impact on customers responsibility

results of errors

This list is not meant to be exhaustive, but gives examples of the characteristics that are frequently measured.

Factor Comparison
Factor Comparison is similar to Points Rating, being based on an assessment of factors, though no points are allocated. Use of the Factor Comparison method is not as widespread as the Points Rating systems, because the use of points enables a large number of jobs to be ranked at one time.

Non-analytical schemes
These are less objective than analytical schemes, but are often simpler and cheaper to introduce. Methods include job ranking, paired comparisons and job classification.

Job ranking
This is the simplest form of job evaluation. It is done by putting the jobs in an organisation in order of their importance, or the level of difficulty involved in performing them, or their value to the organisation. Judgements are made about the roles based on aspects such as the jobs' scope and impact, their level of autonomy, the complexity of their tasks and the knowledge and skills needed. Once this analysis is done, the jobs together form a hierarchy which indicates the different levels, or ranks, within the organisation. Organisations often divide the ranks into grades. The number of grades chosen will depend on the organisation's needs. This process is easily understood by employees and is relatively cheap to undertake.

Paired comparisons
This is a statistical technique used to compare each job with others in an organisation. Using a ranking form, points are allocated to the job:

two points if it is considered to be of higher value one point if it is regarded as equal worth no points if it is less important.

The scores are added up and then the final overall ranking can be given. Paired comparisons gives greater consistency, but takes longer than job ranking as each job is considered separately.

Job classification
This method is also known as job grading. Before classification, an agreed number of grades are determined, usually between four and eight, based on tasks performed, skills, competencies, experience, initiative and responsibility. Clear distinctions are made between grades. The jobs in the organisation are then allocated to the determined grades.

Designing job evaluation schemes

Both analytical and non-analytical schemes can be developed. Organisations can develop a system themselves, use consultants, buy a consultancy's off-the-shelf package, or employ the consultancy to tailor the package to suit the organisation. The Hay Guide Chart-Profile Method is the most widely used scheme, but there are many other schemes developed by other consultancies. What is chosen will depend on the size of the organisation and the aim of the job evaluation exercise. It is possible to use different schemes for different types of employee. The following big consultancies offer off-the-shelf or tailor-made schemes:

HayGroup Hewitt Mercer PricewaterhouseCoopers SHL Group Towers Perrin Watson Wyatt.

Many smaller independent consultancies also offer job evaluation services. A comprehensive job evaluation scheme is currently being introduced in the National Health Service.

Implementing a scheme
When introducing job evaluation for the first time, it's important to communicate with employees. A suggested process is:

Other factors to consider

the process is often as important as the results large-scale evaluation can potentially involve all roles in an organisation job evaluation should be an ongoing process a decision should be made at the beginning on how results will be communicated an appeals procedure should be established before the evaluation begins the more complex the scheme, the more detailed the job description needs to be accurate records of decisions should be kept the results should be tested to see if there are any pay anomalies.

CIPD viewpoint
Job evaluation is an evaluation of the role, not the person doing it. A job evaluation scheme should be a fair system, understood by and communicated to employees. It should be transparent, and reviewed regularly to ensure business needs continue to be met. The type of scheme chosen will depend on the organisation needs. But any staff making decisions on job roles will need training in the chosen system. Involving employees in the process can increase their commitment and further engagement with the organisation, but they must remain impartial at all times in the process.

References
1. ACAS. (2008) Job evaluation: considerations and risks. Advisory booklet. London: Acas. Available at: http://www.acas.org.uk/index.aspx?articleid=682

Further reading
CIPD members can use our Advanced Search to find additional library resources on this topic and also use our online journals collection to view journal articles online. People Management articles are available to subscribers and CIPD members on the People Management website. CIPD books in print can be ordered from our Bookstore

Go to Advanced Search Go to our online journals collection Go to the People Management website Go to our online Bookstore

Books and reports

RICHARDSON, M. (2007) Job evaluation and guide to suppliers. HR studies plus. London: Incomes Data Services.

Journal articles
EGAN, J. (2004) Putting job evaluation to work. IRS Employment Review. No 792, 23 January. pp815. WATSON, S. (2005) Is job evaluation making a comeback - or did it never go away? Benefits and Compensation International. Vol 34, No 10, June. pp8-12,14.

This factsheet was based on a draft from Peter Hunt of The Success Foundation, and updated by CIPD staff.