6 excellent reasons why job evaluation is key in any business

6 excellent reasons why job evaluation is key in any business

Posted on 5 Feb 2020

As defined by Acas, ‘job evaluation is a method of determining on a systematic basis the relative importance of a number of different jobs.’  It enables a logical comparison to be made between roles to assess their relative worth for the purpose of establishing a rational and defensible pay structure.

The relevance of job evaluation was highlighted recently following Samina Ahmed’s successful equal pay claim against the BBC.  Ahmed claimed she was owed almost £700,000 in back pay because of the difference in her rate for presenting Newswatch and Jeremy Vine’s pay for hosting Points of View.   The BBC failed to convince the tribunal that the pay gap was for any reason other than gender discrimination.  The judgement concluded that under the Equality Act the BBC ‘has not shown that the difference in pay was because of a material factor which did not involve subjecting (Ahmed) to sex discrimination’.

The process is as important as the results

Job evaluation can be a complex and time-consuming task, and the process is often as important as the results.  The project delivery needs to be carefully planned at very stage, always with the business in mind, to avoid distracting the workforce from the day-to-day operation of the company.

It needs to be underpinned by a robust employee communication plan to generate common understanding about the project aims, to set employees’ expectations about the potential outcomes, and to enable them to ask questions and to allay any fears they may have.

Grading decisions must be based on detailed and up-to-date job descriptions, accurate records must be kept and the process must include an appeals procedure.

But the benefits of job evaluation by far outweigh the investment in time and even the potential costs if the project is outsourced.

1.    Helps to manage internal job relativities

Job evaluation will produce a grade structure, or job hierarchy, by creating ‘job families’ – jobs of equal worth.  Levels of responsibility in terms of problem solving or decision-making, for example, should be included in the evaluation criteria to help develop career paths.

2.    Ensures equal pay for equal work

Job evaluation aims to ensure equal pay by applying fair, sound and consistent judgements to produce and maintain an internally equitable grade and pay structure.  To achieve this, it is vital that the scheme is based on characteristics that feature in all roles in the company to some extent otherwise it risks distorting the grading decisions and in-building the potential for inequality from the start.

3.    Encourages external pay benchmarking

The process of job evaluation should incorporate a survey of market rates to ensure a competitive pay and benefits structure.  This does not mean that it will inevitably lead to increased pay costs, but an external pay comparison will show where the business lags behind or is in front of market rates and it may help to explain high employee turnover or recruitment problems in certain teams.

4.    Enables newly-created roles to be assimilated into the existing structure

As the company grows and evolves, it will be straightforward to integrate new roles into the existing structure by evaluating them according to the established principles of the company’s job evaluation process.

5.    Facilitates the harmonisation of pay and benefits as a result of merger or acquisition

An existing job evaluation framework will enable jobs within an acquired or merged business to be mapped against those in the acquiring organisation. The results will identify any gaps and inform the company’s integration strategy.

6.    Supports lateral career moves and internal mobility

A transparent and well thought through grading structure will help to identify employees’ development needs by articulating the skills and experience they need to move to the next level.   In combination with this, an aligned compensation structure will help to determine the corresponding uplift to their pay and benefits.

For more information about the benefits of job evaluation and how to implement it for your business, get in touch!

 

 

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