Job evaluations allow employers to analyze jobs in terms of both salary and organizational fit. It is an important piece of your compensation administration if you want to ensure you’re paying fairly in relation to both internal and external benchmarks. In a BLR bootcamp titled "Comp 101 Bootcamp: How to Effectively Develop Competitive Pay Plans for Your Organization," Katie Miller Busch outlined some job evaluation basics for us.

Job Evaluation Basics

A job evaluation is "a process of systematically determining the relative worth of a job, and it’s to help you understand where a job fits within the structure for the organization, relative to other positions." Busch explained during the webinar. A job evaluation plan is a technique of using a common set of generic factors to evaluate all jobs (or a set of jobs) for the purpose of assigning a pay grade/range to the jobs. In the job evaluation plan, you rank a job’s duties and responsibilities relative to other jobs in an organization. You may refer to this as a "job structure" or a "classification structure."

When creating your job evaluation plan, "you really want a systematic approach to determine the relative worth of positions, based on obviously the things that you identified in the job analysis – the job content, the skills required (the things that you wrote up in the job description). You also want to factor in the value of jobs to the organization and the organizational culture and what’s happening in the external labor market." Busch explained.

The Importance of Your Job Evaluation: A Fully Defensible Pay System

Having a fully-defensible pay system starts with using those standard processes for gathering and documenting job information. If you have a standard technique for evaluating jobs, you can identify similarities and differences in the work performed, the levels of responsibility, and the skills and qualifications involved in the positions. This allows you to create consistent pay administration practices in which differences in pay are based on individual characteristics of the person, such as education, prior work experience, performance, productivity, and time in the job.

Busch explained the importance of the job evaluation plan during the webinar: "The key here is that we want to have consistency across the organization and we want to have employees and managers perceive that the job evaluation techniques/the job evaluation plan is consistent and fair." This will give employers guidance when determining the pay range for jobs and support your organizational pay strategy. When done right, it is certainly worth the effort.

For more information on job evaluations, order the bootcamp recording. To register for a future webinar or bootcamp, visit http://catalog.blr.com/audio.

Katie Miller Busch is the owner of HR Compensation Consultants, LLC and offers more than 15 years of progressive compensation experience having worked in various industries, including high-tech, loyalty marketing, biopharmaceuticals, retail, manufacturing, and logistics solutions.