Job evaluation

Job evaluation

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This chapter is one of the more complicated chapters in the textbook and discusses a key technique in designing compensation systems, so read it carefully. You will probably need to reread it a couple times to get the details down. As shown in the diagram on “ Many Ways to Create Internal Structure,” this chapter addresses what to evaluate and how to evaluate to determine the relative value of jobs within an organization. This valuation process results in the internal job structure which reflects the relative value of key jobs in a hierarchy of jobs based on the value of the jobs to the organization.

The reasons for conducting job evaluations were basically discussed in the chapter on developing internally aligned pay structures. Job evaluation is one method for developing internally aligned, job-based, pay structures. The focus of the chapter is on the different techniques for conducting job evaluations and how they culminate in an internal job structure. Note that in an internal job structure there are no pay rates, only a hierarchy of jobs. When pay rates are included, then the internal job structure becomes an internal pay structure. Money will be introduced later, but not in this chapter.

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