Job Evaluation and Ranking

Ranking, Comparison and Factor Analysis Methods

In order to build a salary ecosystem free of arbitrariness, it is essential to quantify the specific weight of each occupation within the organization.

This appraisal is carried out by means of various analytical methodologies that weigh the demands of the job positions.

Qualitative classification systems rank positions hierarchically based on general descriptions of responsibility.

However, companies seeking pinpoint accuracy resort to detailed point factor analysis.

This scientific model breaks down each role into quantifiable dimensions, such as the level of mental effort required, the harsh conditions of the physical environment and the magnitude of the financial impact of their operational decisions.

If we examine a hospital facility, the method will assign a higher score to the position of emergency medical director versus that of a receptionist, due to the far-reaching responsibility for human lives and the handling of critical budgets.

The objectivity of this analysis eradicates any attempt to artificially inflate the importance of a function due to personal sympathies.

Establishing this analytical rigor lends indisputable legitimacy to the salary structure that will be constructed later.

Creation of groupings and degrees of complexity

Once the rigorous assessment of roles has been completed, administering individualized salaries for hundreds of different functions would result in unmanageable bureaucratic chaos.

To simplify this enormous administrative burden, talent departments consolidate jobs with similar scores into homogeneous groupings or degrees of complexity.

This stratification assumes that very diverse roles can bring equivalent strategic value to the company.

For example, in a vehicle assembly company, a quality control engineer and a cost accountant could be integrated into the same pay grade, since both require university degrees, deal with highly complex analytical problems and manage highly confidential information.

By grouping them together in the same stratum, the organization assigns them identical opportunities for basic pay progression.

This structured arrangement facilitates the creation of clear compensation policies that are easily communicated to the rest of the staff.

It also provides financial managers with a predict