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COMPENSATION & REWARDS
Oct 20, 2014

Job evaluation: The unsung hero of HR processes

Classification systems used to underpin a variety of strategic applications: Study
    

By Claudine Kapel

When you think of the term “job evaluation” what springs to mind?

If you have operations in Ontario or Quebec, a likely response may be “pay equity compliance.”

Indeed, if your organization operates in a geography or jurisdiction with pay equity legislation, having a formal job evaluation process is foundational to achieving and maintaining regulatory compliance.

But the reality is  a job evaluation process provides a lot more than just a means of addressing pay equity requirements. Because it establishes both an internal ranking of jobs and a well-considered means for grouping jobs together into levels, job evaluation serves as the foundation for a wide variety of human resources programs and processes, including the design of base pay structures.

It does take some work to establish or revamp a job evaluation process. Given the complexity of the work involved — and the perhaps more than occasional challenge of getting good job documentation — the reality is that not everyone approaches doing job evaluation with glee.

But such a process — once established — can be worth its weight in gold. Once you’ve established a defensible job hierarchy and organized your jobs into meaningful levels, you’re ready to reap a wide range of benefits, with regulatory compliance being just one of the potential positive outcomes.

That’s why job evaluation is often the unsung hero of HR processes. The journey isn’t an easy one, but the destination is worth the effort.

A recent report by the Conference Board of Canada entitled Job Evaluation and Classification: A State of Practice in Canadian Organizations highlights this point.

“Job evaluation and classification are foundational drivers and ingredients of base salary systems, performance management levels, career paths and labour costs,” notes the Conference Board. “A well-structured classification system is core to most human resources policies and programs.”

So while a job evaluation process can help facilitate pay equity compliance, at its heart, it’s really about a lot more than that.

In fact, pay equity compliance wasn’t even among the top three reasons why respondents to the Conference Board’s study do job evaluation. Respondents, who were allowed to select multiple items, identified the following as the top drivers of job evaluation:

  • Internal equity – 94 per cent
  • Market competitiveness validity – 72 per cent
  • Good practice – 66 per cent
  • Compliance with pay equity legislation – 58 per cent.

So clearly, even if your organization doesn’t operate in a jurisdiction with pay equity legislation, you can still reap the benefits of having a job evaluation or classification system – especially in achieving clarity around jobs and levels.

A job evaluation tool can be designed in different ways, depending on the needs of the organization. If one of your objectives is to comply with pay equity legislation in Ontario or Quebec, you’ll need a point factor job evaluation tool that yields a numeric point score for each job. These point scores are utilized in the analysis required to demonstrate pay equity compliance.

A point factor tool can be used just as readily in geographies without pay equity legislation because having numeric scores for every job makes it easy to see which jobs are of the same or comparable value – even when jobs have dissimilar duties and accountabilities.

If regulatory compliance isn’t a concern, an organization can also use a more qualitative tool to map jobs to levels, such as a career level framework. Such a framework describes job accountabilities and requirements by level, but does not generate any point scores. Instead, jobs are slotted to an appropriate level based on which level in the framework represents the best fit.

The bottom line, however, is that having a clear and consistent way of organizing jobs into levels creates a solid foundation for other HR programs and processes.

In fact, Conference Board survey respondents, who were allowed to select multiple items, identified a wide range of strategic applications for job evaluation:

  • Career paths / ladders – 59 per cent
  • Performance management standards / expectations – 55 per cent
  • Recruitment protocols – 49 per cent
  • Variable pay differentials – 41 per cent
  • Competency standards / levels – 37 per cent
  • Training and development budgets – 14 per cent.

Establishing or updating a job evaluation process takes time and effort. There are a lot of things to consider, and a lot of moving parts.

But on the flip side, there’s nothing quite as reassuring as the gentle hum of a well-oiled machine.

    
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