Job Grading – A Brief Overview
Job grading is the process of using formalized systems for determining the relative value of jobs within an organization. It typically involves the ranking of jobs through the use of some or other points-factor system where the key characteristics are:
Main Purpose of Job Grading
- To determine the difference in complexity between positions/roles, using the same systematic approach across the organisation.
- To establish a logical basis for salary benchmarking (internal and external parity).
- To establish a logical basis for pay structuring.
- Provides a common language and defined point of reference for negotiation and collective bargaining.
Secondary Purpose of Job Evaluation
- Assists in developing career paths through the hierarchy of jobs
- Assists in developing or revising organizational structures
- Assists with skills development within the workplace
- Allows a detailed analysis of wage and skills gaps
Job Grading Systems
There are numerous job grading systems. Many of them are proprietary systems that belong to consulting firms. Below we list some of the grading systems that companies use:
Paterson is the only non-points-based job grading system available and is widely used in the African Continent. Jobs are compared by evaluating the level of decision-making. The overall hierarchy of jobs however, is the same as if a points based job evaluation system is used
Task is a fine tuning of the Paterson System of Job Grading. Jobs are first placed in a band, or skill level. Task, however, only uses 5 levels, as opposed to Paterson’s 6. The skill levels used in Task are ‘Basic’, ‘Discretionary’, ‘Specialised’, ‘Tactical’ and ‘Strategic’. Thereafter, placing the jobs into the relevant sub levels or grades is based on factors; complexity, knowledge, influence and pressure.
Peromnes scores jobs on a number of factors; problem solving, pressure of work, job impact, consequence of judgement, educational qualifications, training and experience. The overall score is applied to a sliding scale to determine a job grade. This system is mostly used by educational institutions, due to its emphasis on formal qualifications.
The Hay method of job grading was developed in America. It is also a points based system. However, it only measures jobs using three factors; know-how, problem solving and accountability. In an attempt to enable Hay to be applied to blue collar occupations, a forth factor, namely working conditions, has subsequently been included. This system is mostly used by large American corporates such as Coca-Cola, Colgate Palmolive, Microsoft, Google, Johnson and Johnson, etc.
Re-measure is an internet based job grading system that appoints a Paterson Band and then apportions a score to each job. The following factors are used to measure jobs; qualifications, knowledge and skills, experience and training, problem solving, communication, financial impact and influence.
JE Manager is a computerised job grading system and is owned, marketed and administered through the Hay Group. It assesses the scope and complexity of a job on the basis of three groups of factors; output, input and process factors. Each of these groups contains two factors. Each individual factor is weighted, and then measured on two dimensions. This is a highly recommended system. However, it is extremely costly, and in addition, still requires a high level of job evaluation knowledge of the administrator.
Below is an approximate correlation of grades between some of the popular grading systems.
||50 – 67
||0 – 7
||68 – 79
||8 – 16
||80 – 92
||17 – 24
||93 – 109
||25 – 34
||110 – 128
||35 – 44
||129 – 150
||45 – 54
||151 – 176
||55 – 64
||65 – 74
||177 – 197
||75 – 84
||Skilled, Technical and Academically Qualified Employees,
Junior Management, Supervisors,
Routine or Process Decisions
||198 – 222
||85 – 94
||223 – 250
||95 – 104
||251 – 320
||105 – 114
||321 – 400
||115 – 124
||401 – 454
||125 – 134
||Professionally Qualified and Experienced Specialists,
||455 – 515
||135 – 144
||516 – 585
||145 – 154
||586 – 720
||155 – 164
||721 – 850
||165 – 174
||851 – 992
||175 – 184
||Senior Management, Heads of Major Functions,
||993 – 1157
||185 – 194
||1158 – 1350
||195 – 204
||1351 – 1664
||205 – 214
||1665 – 2050
||215 – 224
||2051 – 2200
||225 – 234
Policy Making Decisions
||2201 – 2350
||235 – 244
||2351 – 2515
||245 – 254
||255 – 264
||265 – 275
When Should a Job Be Graded?
- When there is an appropriate change in the job/role content and its complexity or responsibility levels – not if only volume increased (more of the same tasks were added)
- When the organization has gone through a restructuring exercise – only evaluate jobs/roles that were affected by the new structures
- When a historic job evaluation system has become outdated and a new or revised approach is introduced
When Should a Job NOT Be Graded?
- Do not evaluate merely to upgrade a job/role to pay an individual more – greater flexibility must be built into the salary structures and remuneration policy
- The changing nature of organizations and work requires different standards be applied to valuing jobs than in the past
Principles of Job Grading
- Focus on output from work rather than input to work
- Ability to handle complex and diverse nature of organizational structures – even within one company
- Identification of factors and factor language that transcends geographic and cultural boundaries
- Process for evaluating jobs must be capable of being consistently and effectively implemented in ever more decentralized environments by individuals without expertise in position evaluation
The Job Grading Committee
The role of the Job Grading Committee is to grade jobs in a fair and consistent manner using the agreed job grading system that the organisation decides to use. The Job Grading Committee of the organisation normally functions in a two-tier structure, constituted as follows:
Job Evaluation Unit
This Unit is typically made up of trained job analysts. The head of HR normally decides which members is to be part of this unit and requires designating one of the members as Chairperson.
The Unit will then evaluate all positions and submit the outcome of such evaluations to the Validation Committee.
All job evaluation results as evaluated by the Job Evaluation Unit will be submitted to the Validation Committee for final review and validation prior to implementation of such results.
The Validation Committee shall be appointed for a period of 2 (two) years and shall for the first 2 year period consist of any five (5) Directors. The Validation Committee shall determine its Chairmanship.
The Validation Committee will not re-evaluate positions evaluated by the Job Evaluation Committee, but will identify aspects requiring further consideration, such as internal relativities, comparisons with similar graded positions etc. The Validation Committee will determine whether the results of a given job evaluation process are to be implemented as such, or whether further consideration must be given to certain aspects of the original evaluation by the Job Evaluation Unit.