Michael Armstrong - Armstrongs Job Evaluation Handbook

Armstrongs Job Evaluation Handbook

A guide to achieving fairness and transparency in pay and reward

Michael Armstrong

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First published in Great Britain and the United States in 2018 by Kogan Page Limited

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Michael Armstrong, 2018

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As defined by ACAS (2014), Job evaluation is a method of determining on a systematic basis the relative importance of a number of different jobs. ACAS also noted that, A job evaluation scheme is a way of systematically assessing individual jobs objectively, while avoiding prejudice or discrimination.

This book is largely about formal methods of comparing the value of jobs to assess their relative value to the organization (internal relativities). A distinction is made between formal job evaluation schemes such as point-factor rating, analytical matching and levelling, which are solely concerned with internal relativities, and market pricing, which is concerned with ensuring as far as possible that internal pay rates are competitive by comparing them with those in other organizations (external relativities). In its extreme form, market pricing is used alone without any attempt to assess internal relativities through a formal job evaluation system. In the United States, but not in this book, it is classified as a job evaluation process.

Although the focus is on formal job evaluation schemes it is recognized that evaluation takes place every time a decision is made on how much a job is worth on the basis of broad comparisons with other jobs internally or information on the rates paid for similar jobs by outside organizations (market rate comparisons). Such informal approaches are also considered in this book.

Formal job evaluation schemes attracted a lot of criticism in the 1980s and 90s mainly on the grounds that they were rigid, bureaucratic, perpetuated unnecessarily extended hierarchies and ignored market rate considerations. Yet, as the Institute for Employment Studies (Brown et al, 2016) commented on the basis of extensive research: Job evaluation seems to be alive and well in UK organizations. XpertHRs 2013 job evaluation survey revealed that 71 per cent of UK organizations used a job evaluation scheme and 76 per cent of the respondents to the 2017 e-reward survey had one. But, as mentioned in the final chapter of this book on issues and trends, considerable changes have been taking place recently in approaches to job evaluation, with less reliance being placed on traditional point-factor schemes.

The book is divided into the following parts:

ACAS (2014) Job Evaluation: Considerations and risk, London, ACAS

Brown, D, Bevan, S and Rickard, C (2016) A review of pay comparability methodologies, Institute for Employment Studies [Online] https://www.gov.uk/government/publications/a-review-of-pay-comparability-methodologies [accessed 1 May 2017]

e-reward (2017) Job Evaluation Survey, Stockport, e-reward

XpertHR (2013) How to select, devise, and use a job evaluation scheme [Online] http://www.xperthr.co.uk/how-to/how-to-select-devise-and-use-a-job-evaluation-scheme/155642 [accessed 28 September 2017]

The aim of this chapter is to provide a conceptual framework for the process of job evaluation. It covers the following topics:

• definition;
• purpose;
• the meaning of value;
• features of job evaluation;
• the basis of job evaluation methodology.

A glossary of job evaluation terms is provided in .

Job evaluation is a systematic process for establishing the relative worth of jobs within an organization. The summary in of what job evaluation is and what it is not was provided by ACAS (2014).

Table 1.1 What job evaluation is and is not

Job evaluation aims to generate the information required to provide, in the words of Elliott Jaques (1961), equitable pay by using fair, sound and consistent judgements to develop and maintain an internally equitable grade and pay structure. This means paying particular attention to the provision of equal pay for work of equal value.

An alternative view was provided by Gupta and Jenkins (1991) who argued that the basic premise of job evaluation is that certain jobs contribute more to organizational effectiveness and success than others, are worth more than others and should be paid more than others. This is all right as far as it goes but it neglects the need for internal equity or comparable worth.