Job Evaluation, Grading Design & Pay Structure

Job evaluation is a structured process to evaluate the relative contributions of jobs and to rank them within an organization, providing a systematic basis for Human Resource decision making and employee communication.

The goal of job evaluation is to compare jobs with each other to design grading structures that ensure Equal Pay for Equal work.

Once pay ranges, brackets or scales are attached to each grade, band or level in a structural way then the grading structure becomes a pay structure and safeguard fairness, equity, and consistency  for everyone.

Job Evaluation-What is and What is Not:

• It is linked with jobs, not people, it is not the person that is being evaluated
• It is based in the assumption of standard performance
• It is concerned with the job at this point in time

Grading Structure:

Grading structure is a means of creating a structure of jobs in an organization by reference to an indicator of complexity, market value or business needs and consists of a sequence or hierarchy of grades, bands or levels into which groups of jobs that are broadly comparable in size are placed.

Grading Structure:

• Formulates the range and types of roles covered by an organizational structure
• Creates a number of levels within the organizational hierarchy (clearly defined clusters of jobs at the various levels)
• Jobs which have similar attributes are grouped into the same grade
• Presents a range of pay ,compensation & benefits

Pay Structure:

A grade structure becomes a pay structure when pay ranges, brackets or scales are attached to each grade, band or level

A pay structure is a collection of salary grades, levels or bands that link related jobs within a hierarchy or series.

Pay structures have two key characteristics:

• The number of grades within the structure
• The span of each band

A pay structure provides a framework to implement reward strategies and policies and defines the different levels of pay for jobs or groups of jobs.