Creating An Equitable System For Your Personnel With Job Evaluation

For a lot of businesses, particularly smaller ones and start-ups, their manpower is their greatest asset. You can only automate businesses processes up to a certain point. And while new technologies and processes do render people obsolete, overall, a company's personnel serves as the backbone and foundation of a business enterprise.

As such, you want to establish a transparent and equitable system, not only to compensate the efforts of your staff, but more importantly, to also craft a system that looks beyond the present. As a venture expands and grows, it is crucial to devise a job evaluation system that allows it to create an environment where the employees feel satisfied and rewarded accordingly. Failure to do so can result in lower job morale or even the poaching of key personnel by business rivals.

Among the essential factors involved in job evaluation are salary benchmarking, management of pay relativities, the creation of a fair system (particularly in employee perception of the evaluation process), creation of a structure for benefits provision, and finally, meeting and satisfying the requirements of the law.

Creating salary scales begins with a clear grasp of the market and prevailing rates businesses should target, at least, for industry standards. Typically, this process entails six steps:

1.      Organization of HR data– For small businesses, this entails the rationalization of job titles and grouping jobs together.

2.      Organization of market data–This involves the collection of pertinent salary surveys.

3.      Creation of market guidelines– Using external data, this stage takes a critical look at roles that may be either underpaid or overpaid.

4.      Salary benchmarking and creation of salary ranges– Looking at published pay scales, you might notice that there is a clear delineation and pay progression between each job level. At this stage, market surveys are utilised to create salary ranges which in turn can be divided into three categories: a) salaries for new hires, b) prevailing industry rates which the business aims to apply to its personnel, and c) the level which can be considered above industry levels and reserved for key personnel and top performers.

5.      Impact and distribution analysis– At this stage, a business looks at both ends of the spectrum: those that are below and above the pay scale. From here, you can look at how your employees are distributed across the salary scale and make the necessary adjustments in terms of managing pay.

6.      Managing pay review– This stage pertains to the creation of a system where an employee's performance ratings and salary scales are used together to establish clear-cut guidelines for rewards.

About the author: Sarah Miller is a business consultant and a part-time writer who loves to write anything about various industries. She writes in behalf of


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