Using Job Evaluation in 2018
26th April 2018 | Michael Armstrong
Job evaluation today is in a state of flux. The issue is, why should we use it at all?
In the United States, the answer has on the whole been "we don't need it." As WorldatWork research revealed, market pricing on its own well out-paces all other methods as the dominant form of valuing jobs in the US, being used by between 67% and 73% of the organizations they surveyed, depending on job category.
Those who support job evaluation as a means of establishing internal job relativities claim that it brings order and discipline to situations which can too easily become chaotic without the pay structure it helps to develop.
But not everyone feels that way.
As Zingheim and Schuster, two of the most respected writers on pay in the United States, asserted: "The history of pay involves entitlement disguised as a nearly singular emphasis on internal equity". The future as they saw it "depends on our ability to develop and implement a base salary system that is anchored in the market place".
It can be argued that job evaluation simply boils down to organized rationalisation. Formal job evaluation schemes, especially the most popular method, point-factor rating, have attracted a lot of criticism on the grounds that they are rigid, bureaucratic, time-consuming, expensive, perpetuate unnecessarily extended hierarchies and ignore market rate considerations.
Yet, as the IES commented on the basis of extensive research: "Job evaluation seems to be alive and well in UK organizations". XpertHR's 2013 job evaluation survey revealed that 71% of UK organizations used a job evaluation scheme, and 76% of the respondents to the 2017 e-reward survey had one.
However, the IES observed that large employers are devoting proportionately more resources to external market surveys and data and relatively less to job evaluation. They are taking more account of external data and ‘vertical’ divisions and variations in this for different functions and occupations and are less concerned with internal relativities. And XpertHR's survey found that 69% of organizations stated that the need to be equal pay compliant was behind their reason for using job evaluation.
Current pressures to reduce the gender pay gaps revealed by company reports will probably increase the use of job evaluation for this reason.
Recent research by the IES and e-reward revealed that when job evaluation is used the trend is for more pragmatic adaptation rather than revolution; for simplification rather than complexity.
Analytical matching or levelling schemes are becoming popular – they were used by 68% of the respondents to the e-reward 2017 survey.
Point-factor schemes may be relegated to an underpinning role or abandoned completely. This development has been caused by the desire to simplify the process and to reduce the time-consuming nature of point-factor schemes applied to all jobs. Brown and Munday commented that:
"Points factor evaluation may still be undertaken for difficult or controversial jobs, but most jobs are simply slotted into the appropriate level, and then the focus is on developing people's skills and contribution which drives their pay progression up clearly communicated career pathways. Managers understand and accept branding decisions, while employees are engaged by the clarity and links between their pay progression and development of their skills and talents".
Changes to their existing job evaluation system were planned by 28% of the respondents to the 2017 e-reward survey. Many of these were moving to levelling or job slotting. Proposed changes included:
"Considering other options for ranking and sizing roles rather than just points based."
"In midst of switching from full Hay JE to using Hay job mapping."
"Introduce job levels so roles are not specifically matched to individual job match codes."
"Moving to a career framework and job evaluation will be done using levelling."
"Looking to introduce job slotting."
"Likely to move to 'work levels'. Our current points methodology may still be used to underpin the new scheme, however."
"We are changing our grading structures and will define anchor jobs at each new level which we can then use to benchmark new jobs against to align them to the new appropriate level."
"Improve job matching to survey jobs of main vendors and correlation of internal levels to vendor levels."
The following excellent advice was given by one respondent:
Remember that will all the evaluation systems more or less 90% of the toles are levelled without any discussion. The last and tricky 10% are hard no matter which approach you take. Do not design a system simply to defend levelling results for the last 10%. Keep it simple and leave room for manoeuvring. Reduce complexity. Make it understandable. Use the time that you save on complex evaluation methods to discuss the scheme and its implications with management.
This move away from reliance on point-factor schemes to the use of matching or levelling is the most important development in recent years. Organizations such as the NHS and some universities often start with a point-factor scheme but rely mainly on job matching or slotting after the initial benchmark evaluations have taken place.
Point-factor evaluation is only used when matching is difficult. Others may do without an underpinning point-factor job evaluation scheme altogether, relying solely on analytical matching or levelling.
About the Author
Michael Armstong is the UK's bestselling author of Human Resource Management books. His latest title, Armstrong's Job Evaluation Handbook is packed with case studies from leading organizations such as Microsoft, Vodafone and the NHS.