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Create a Job Worth Hierarchy

Prove the value of job evaluation by implementing an effective and efficient process that is aligned with organizational strategy.

  • Many organizations do not conduct job evaluation due to the perception that it is too complex and time consuming to produce a return on investment (ROI).
  • Instead, these organizations use a compensation-setting model that relies exclusively on market pricing – showing unjustified confidence in its reliability and an overreliance on external equity.

Executive Summary

Critical Insight

  • Job evaluation and market pricing need to be treated as complements to one another, not substitutes.
  • Instead, many organizations use a compensation-setting model that relies exclusively on market pricing, showing unjustified confidence in its reliability and an overreliance on external equity when it comes to compensation decisions.

Impact & Result

  • Create an objective job worth hierarchy that supports legal defensibility by identifying and customizing the best-fit method of job evaluation for the organization.
  • Overcome the challenges of job evaluation by focusing on ensuring the process is strategically aligned, flexible, and as painless as possible.
  • Use the job worth hierarchy to find the right balance between internal and external equity to allocate the compensation budget effectively.

Research & Tools

1. Prepare for job evaluation

Select the best-fit method and determine the approach to job evaluation.

2. Perform job evaluation

Customize the job evaluation method, complete job evaluation, review the results, and document the process.

3. Communicate and maintain job evaluation

Determine the target level of transparency, obtain approval, and establish associated processes.