How is Job valued?
I was thrilled to hear that question coming from one of the business leader. Why? Because that leader was invested, was curious, was challenging status quo and wanted to have as much information so that he could explain that to his directs. It is these interactions that drive HR to showcase strategic business partnering skills. So, here’s how it went (not in as many words, but close). Of course there were follow up questions, but that leader went on to say,” this is the most detailed work that we have done in comp during my time in the company”
“We look at our company jobs and go out in the market to see if there are other organizations that have similar jobs. We work with a reputed third-party salary survey organization for market analysis. These survey organizations have job catalog, and we try to match our job(s) to their job catalog (at least 70% of content of our job to a survey job). We aim to do this for almost 50% of our jobs in the company. Often called benchmark jobs – these jobs are common across and easy to find in other organizations. Once job matching is done, survey company provides us with market data for all the jobs that we’ve matched. Once we have the market data point for all of our benchmark jobs, we arrange them in a hierarchical order (with highest/lowest market salary on top) which helps us to see the value of Job with external market as a reference point.
There’s another approach where we see the value of job through an internally focused lens. There are different approaches to do this, but I’ve seen 2 most common methods used – One is called Classification method where a job is looked as a whole and placed in a pre-defined descriptions that best describes it. Other method goes a bit deeper and assigns pre-defined points to areas that influence the job. These areas are typically skills – either education, experience or physical skill; Effort to do the job – either physically or mentally ; responsibility of the job – usually impact of error, independent judgement, contacts etc and finally working conditions like work environment, standing, bending etc.
We blend both approaches to find the value of the job (not person holding the job)”
As pay legislation evolve, defining value of job becomes crucial. Remember, pay is an emotional issue and applying consistent approach from beginning goes a long way.