Job Evaluation is an increasingly popular HR technique that assesses the relative value of job roles and other positions within the business. The concept of job evaluation isn’t new, but as additional research is conducted into the impact of transparency around fair pay and the effect of employee satisfaction on overall performance, an increasing number of businesses are investing in job evaluation.
At Paydata, we specialise in providing comprehensive pay and reward solutions from bespoke salary structure design through to consultation and conducting surveys. Our PAYgrade job evaluation software compiles our team’s industry expertise to create a straight-forward, easy-to-learn job evaluation technique that avoids the need for weeks of training before use.
Leveraging our knowledge and experience, we have put together a brief guide highlighting exactly why job evaluation is an invaluable HR tool, covering its major benefits for modern businesses. If you are unsure about investing in a job evaluation system, use this as a resource to discover whether it will suit your organisational goals or needs and is right for you.
Identifying pay discrepancies
With the increasingly important focus on workplace equality, both due to its impact on employee performance and from a wider societal perspective, identifying pay discrepancies and amending them is a key priority for modern businesses. Pay discrepancies can exist where remuneration and reward packages don’t align with external market averages, but they remain equally problematic for employee engagement if they exist between two positions within a business.
Job evaluation compares different roles within an organisation and identifies their relative value to one another. Whilst there are multiple different ways to make this comparison, the most common approach is a robust point-based system that involves assigning points to each role based on a few key factors. Measuring each role using the same universal ranking factors throughout the business makes it clear where specific individuals or roles may not be getting paid at a level that reflects their value to the business, and vice-versa. This is invaluable to maintain a healthy and accurate salary landscape that stimulates employee performance and promotes business growth.
Informing pay structure changes
Remuneration and pay structure design can be a complex hurdle for businesses to get through. Not only do pay structures need to be accommodating due to the rapidly changing business sphere, but they also vary greatly depending on organisational size, structure, industry and more. With this in mind, the more information you can obtain to inform your pay and reward strategy the better, which is where job evaluation plays a major role.
Comparing the value of the roles within your organisation can quickly and efficiently highlight where an out-dated or unsuitable pay structure operates. Linked to the previous point about pay discrepancies, if your pay structure doesn’t allow for progression, benefits or recognition for the most valuable members of the business, then you will struggle to retain your exceptional staff. Job evaluation is an effective tool in deciding whether this type of holistic structural change is needed to create the best platform for your business’ success.
Finding responsibility chokepoints
Responsibility is an abstract term that can be difficult to measure. The key to gauging responsibility is an effective comparison, which is why job evaluation is one of the most efficient ways of identifying the relative responsibility between roles and staff members.
‘Responsibility chokepoint’ is a term used to describe when few individuals shoulder the direct responsibility for a wide variety of different tasks, organisational operations or individuals. These chokepoints put great stress and pressure on the individuals involved, resulting in poor performance and satisfaction, and posing a threat to the business. If one of these individuals leaves the business, which is likely due to the stressful nature of their role, then multiple areas of the business will suffer at once. This over-reliance on a single individual simply isn’t sustainable. Identifying these chokepoints through systematic analysis and job evaluation can prevent major crises in the future.
Reviewing organisational structure
In a similar vein to the previous point about pay structures, job evaluation can also be an invaluable tool for highlighting issues with overall organisational structure. Often, businesses that experience periods of rapid expansion can find themselves struggling for a host of different reasons; unsuitable organisational structure is an incredibly common reason for this. The way that job evaluation compares roles and responsibilities creates a detailed overarching view of the business, quickly showing the responsibilities of each position and highlighting any problem areas.
At Paydata, we are experienced in leveraging this information from the job evaluation exercise to identify whether the issues are surface level and can be amended through small changes, or whether a complete overhaul is needed.
Job evaluation is an incredibly effective and valuable HR tool when used correctly. At Paydata, we have helped countless businesses through job analysis by introducing a ranking system to drastically improve performance through our simple yet detailed PAYgrade point-based evaluation software. With over 20 years of experience, we specialise in providing easy-to-use pay and reward solutions built around you and your needs.
For more information about PAYgrade, job evaluation or other aspects of your pay and reward strategy, please get in touch with our dedicated team.