Using Job Evaluations for Fair and Just Pay

Companies undertake job evaluations to assign relative ‘worth’ of jobs. What this means is that there is an internal and external comparison of jobs to determine pay. Based on the type of knowledge, skills, and experience needed for jobs, you can evaluate their worth.

For example, how does a Senior Accountant job at your company compare with a similar job at another company? And what is the comparison between a Senior Accountant and an IT Programmer or a Technical Recruiter?

By making these comparisons, you can determine the appropriate pay ranges for each job.

What does job evaluation include?

A job evaluation system considers the job complexity, including the level of education needed, skills required, experience, span of control, and job scope. Instead of subjective factors, it uses a data-backed approach to compare jobs. This makes it easy to assign a value or a range to each job.

Once you know the worth of a job, you can decide on where you want to position your pay. You can match the market, pay above the market, or stay behind.

How does job evaluation lead to fair and just pay?

Job evaluation reduces unconscious bias and prejudice in the pay process. Only objective criteria are used to determine where a person is paid within each pay range. Knowing the criticality of a job helps in assigning a range within which you are willing to pay. 

Some of the ways in which job evaluation creates a sense of justice and fairness are:

1. Reduced pay discrimination: Since you are paying for the job and not the individual, factors like gender, race, and age can be removed. For example, if two people are performing two jobs with the same level of responsibility, they can be paid similarly, irrespective of who is performing the job. Consequently, your compensation practices are seen as more fair and just.
2. Improved Workforce Experience (Wx): People who believe they are paid more fairly and using equitable principles are more likely to stay and contribute to company success.The confidence of people in the justice of the compensation process improves morale and elevates the Wx.
3. Transparent communication: Explaining the rationale for pay decisions to people helps them understand that there is no crystal ball gazing at play. The trust in the compensation process goes up. People appreciate the fact that their pay and pay increases are aligned with the job evaluation process.
4. Increased talent attraction: Job seekers look forward to companies that have pay equity and pay fairness. Communicating that you evaluate jobs to assign pay helps people in looking at you favorably as an employer. In addition, you can also be legally compliant more easily and avoid lawsuits or penal action due to discriminatory pay practices.

Conclusion

Job evaluation is a strategic tool that improves fairness and justice in compensation. Companies can power their Wx to remove all traces of subjectivity and bias. This can improve retention and motivation, attract talented people, and create a cycle of high performance.

To learn more about conducting a job evaluation, reach out to us at [email protected].

About the Author

Sumit Singla

Founder of eleventHR Consulting.

Sumit has been working in HR & HR consulting roles for 16+ years across sectors and verticals and specializes in organization design, wellbeing, storytelling & design thinking, and performance management. In his career with consulting firms such as Aon, Deloitte, and Accenture, he has successfully led programs aimed at total HR transformation for clients. Recently, as Associate Director for India Consulting at Deloitte, he worked with clients on cultural transformation and HR process and policy design. He also organized and spoke at conferences and events about a variety of topics relevant to HR today. Now self-employed, he works with clients across the globe on a variety of HR solution areas.

Howard Nizewitz 

Howard’s extensive expertise in compensation management comes with a 25-year track record of implementing strategic and successful compensation programs in the financial services and technology industries with a global and regional focus. His tenure includes positions at Barclays, Citigroup, and JPMorgan. Other areas of expertise include HR consulting, Deferred compensation, incentive plan design, and talent management. If you want to learn more, please contact Howard at [email protected] or schedule a free consultation on the compteam.net website.