Pay is at the heart of all employment relationships. It is often the key reason that people join organisations. It can also be the key reason that people leave organisations. And it is often the key reason determining whether staff feel valued and give of their best or feel undervalued and give as little as they can get away with.

Likewise, from the employers’ perspective, it is common to carefully structure the pay system in a manner that shows they value staff and enables them to give of their best (e.g. via performance-related pay). Or at the other extreme, they may pay as little as they can afford or even get away with.

This array of decisions is normally the product of strategic considerations as to where the employer wants to be in the pay league. That is, given their industry, job types and location, do they want to be in the ‘top’, ‘middle’ or ‘bottom’ of the pay range? To assist with such decisions, there is now a vast reservoir of pay and salary information readily available to both employers and job seekers. That is, a host of organisations now provide an abundance of carefully stratified pay data. In addition to the Central Statistics Office, these include Willis-Towers-Watson, CPL, Hays, Brightwater, Lincoln and Sigmar recruitment specialists, Morgan McKinley, jobs.ie, the Glassdoor, I.B.E.C. and Employer Resources for the non-profit sector.

However, whilst such generic salary survey data is invaluable, what it cannot do is resolve the common crux associated with internal relativities. That is, employers can often come up short, allowing grievances to fester, when the question posed is: ‘Why is Michelle/Mick paid more than me, when my job is more important? Or ‘Why is James/Jane paid more than me, when we really do the same job?’.

Purpose of Job Evaluation ⚓︎

This is where the job evaluation process can play a crucial role, as it helps to determine the pay and relative importance of different jobs. Indeed, in recent years this process was central to the costly and consequential comparison of the nation’s public and private sector jobs and pay levels (via benchmarking), and more recently it has been been used to address grievances in 38 Irish hospitals and health care facilities, at the Institutes of Technology, the Commissioner of Irish Lights, Dublin Bus and Luas, University College Cork, and at the Mary Immaculate College in Limerick. In fact, when recently reviewing the scene across the UK, a detailed study found that job evaluation is ‘alive and well’, defying predictions about its demise - with interest in the area boosted by the heated debate on the gender pay gap.

Hence, this article summarises the key steps in ‘how to’ conduct a job evaluation exercise, as it assesses the relative worth or size of jobs within an organisation, for the purpose of establishing internal relativities and providing the basis for designing an equitable grade and pay structure.

Step 1: Decide on the approach to take ⚓︎

For example, it is more common (and acceptable) that instead of comparing ‘whole’ jobs (i.e. the non-analytical approach), to assess the extent to which various defined factors are present in the jobs being analysed, with the different levels at which they are to be found indicating relative job value. The more commonly used analytical schemes are the ‘points rating’ and ‘factor comparison’ approaches. Whilst consultancy practices’ ‘off-the-shelf’ packages are often used (e.g. the Hay/Korn Ferry system).

Step 2: Communicate and train ⚓︎

Relevant information is prepared that serves to explain the overall process to all employees, whilst those implementing the system are trained (incl. members of the representative committee or work group). This is an important step to enable a consistent application and acceptance of the overall process. An appeal system should also be accommodated in this process.

Step 3: Identify and weight relevant factors under the selected scheme type. ⚓︎

These factors are based upon organisational strategies and values, the nature of the work and acceptability to the stakeholders. Such factors may include impact, knowledge, experience, skills, responsibilities etc. A numeric scale (e.g. 1 to 5) is assigned to each factor, enabling one to assess the degree to which it is present in the job. The weighting process is designed to reflect the relative importance of the various factors. For example, an employer may weigh the factor ‘decision making’ more highly than ‘knowledge’, believing it to be more important to the organisation’s competitive advantage.

Step 4: Conduct a job analysis exercise ⚓︎

Job analysis details the content of a job in terms of the activities involved and the attributes or requirements needed to perform these activities. It confirms the important tasks of the job, how they are carried out, and the competencies or necessary human qualities needed to complete the job successfully. As part of an all-encompassing approach to the job evaluation process, job holders can be asked to complete a questionnaire where they score and provide supplementary information on their jobs under specified headings. In an attempt to minimise inflated assessments, these questionnaires are commonly ‘signed off’ by their manager, before being examined by a representative committee or working group, charged with bringing the evaluation process to a conclusion.

Step 5: Calculate a total point score for each job ⚓︎

Every job covered by the exercise receives a score based upon the extent to which each factor is required to adequately do the job, as moderated by the relative weighting of the various factors.

Step 6: Place jobs in order ⚓︎

All jobs are placed in order according to their scores, from highest to lowest. Higher scores reflect the relative importance of the job to the organisation.

Step 7: Recheck for equity ⚓︎

The order of the jobs is examined to ensure that it is ‘felt fair’ and that differences between scores reflect the relative importance of the job to the organisation.

Of course, in a unionised environment, where staff support for any such initiative can be especially important, it is common to have a joint representative working group proceed through these steps, albeit with ‘stepped increase’ and ‘red circle’ provisions in place. That is, should the evaluation’s subsequent market price comparison reveal underpayments, the employer may specify in advance that any pay increases are gradually applied in an affordable manner over a specified time frame (i.e. stepped increases), whilst their counterparts may specify (in advance) that any pay decreases will not apply to existing staff  (i.e. who are ‘red circled’), but would apply to new entrants.

In summary, the case for a well devised and applied job evaluation scheme is that:

• It can make the criteria against which jobs are valued explicit and provide a basis for structuring the judgement process.
• An equitable and defensible pay structure cannot be achieved unless a structured and systematic process is used to assess job values and relativities.
• A logical framework is required within which consistent decisions can be made on job grades and pay rates.
• Analytical schemes provide the best basis for achieving equal pay for work of equal value and are the only acceptable authoritative defense in an equal pay case.
• A formal process of job evaluation is more likely to be accepted as fair and equitable rather than an informal or ad hoc approach – and the degree of acceptability will be considerably enhanced if the whole process is transparent.

However, it would be remiss to overlook the fact that - unless handled carefully - the job evaluation process can be bureaucratic, inflexible, biased, manipulated, time consuming and inappropriate for meeting the demands of a fast moving organisation operating in uncertain and volatile markets. Hence, the Chartered Institute of Personnel and Development caution employers to consider the implications of:

• The process being as important as the results (see Steps 2 and 4 above).
• Having an appeals procedure (see Step 2 above).
• Having clear, detailed and up-to-date job descriptions (as an aid to Step 4 above).
• Keeping accurate records of decisions made.
• Checking the results for pay anomalies (see Step 7 above).
• Maintaining effective communications, as employees may have concerns over their future job grading and pay level (see Steps 2 and 4 above).

In summary, job evaluation assesses the role, not the person doing it (i.e. it is not a performance management process). The evaluation should be based upon a fair and transparent system, that is effectively communicated and understood by all affected in a manner that successfully underpins crucial judgements on pay and grading. Allied to the aforementioned market pricing system, it can help to provide the employer with an effective, equitable and defensible pay structure.