March 31, 2022

job evaluation

We discuss the following points in this article:

  • Attracting and Retaining Staff.
  • Performance Reviews.
  • Salary Reviews.
  • Job Evaluations.

Attracting and Retaining Staff

As an employer, you might be wondering what the difference is between performance and salary reviews.

In this article we will break down what is involved in each process, and why salary reviews are so important. We will also share some effective strategies to help you get the most from your reviews for the good of your staff and your business as a whole.

A performance review, also known as a staff appraisal, is a meeting held with an employee to discuss their performance and future development within the company. Performance reviews are used to determine whether goals have been met and to discuss the potential growth of an employee. 

A salary review goes a little deeper and is used to determine whether the pay an employee receives is an accurate reflection of how they perform.   In other words, a performance review focuses on an employee’s achievements and how they execute their tasks and a salary review on whether this performance correlates with what they earn.  Once a decision has been made over carrying out a salary review it would be appropriate to conduct a Job Evaluation as a joint exercise.

In today’s market with the increase in job opportunities and challenges in retaining and attracting staff it is important that organisations have processes in place to ensure that staff are clear in what they need to deliver within their job role and also have the opportunity for their role to be updated when change is to happen or has happened.

Job Evaluation is related to job analysis, which is the process of describing the duties of a job, authority relationships, skills required, conditions of work, and additional relevant information. Job analysis involves creating job descriptions and specifications.

Performance Reviews

For high performing staff it is important that the organisation recognises their efforts and also allow them the opportunity to be further challenged to ensure that they remain motivated, productive, and engaged. The best way to do this is through a Performance Review process.

Performance reviews, also referred to as staff appraisals, are meetings held with the employee and their line manager to discuss in detail past performance and agree objectives for the following time period. Performance reviews are used to determine whether goals have been met, exceeded, or not met and provide the opportunity for quality time to discuss the potential and development of employees. 

Performance reviews can help to retain high-performing employees. It can also allow you to engage with staff who are not performing at the level expected at an early stage and thus provide them with the support and opportunity to improve their performance.

Benefits of holding Performance Reviews:

  • Improve overall performance within the workplace.
  • Increase employee engagement by highlighting strengths and identifying any area for development.
  • Challenging employees to improve or do better.
  • Identify development opportunities.
  • Support you to fill vacancies, the perfect candidate could be right under your nose.
  • Identify training needs and provide opportunities for continuous learning.
  • Strengthen relationships by providing quality time dedicated to each individual person.
  • Increase commitment to the organisation.

We believe that if Performance reviews are linked to Salary reviews it provides additional motivation for staff. 

Salary Reviews

The recruitment market is currently facing a time of great optimism with an abundance of vacancies and less people to fill the roles.  Organisations are having to look at different ways to retain current and attract new staff within businesses.

One suggestion over how to keep staff morale high and retain employees is to build annual salary reviews into your business processes.

In doing so you offer those employees, who are performing above expectations, the chance to be rewarded for going above and beyond what is required in their job description. It also allows you to have a positive conversation with your staff around your expectations for the next year and for them to inform you what their hopes are for the future with the organisation. This can include promotion, change of jobs, training, or development opportunities.

The salary review process is an important aspect of HR Management. These are some points that can be discussed:

  • Employees are earning the average salary for their industry and location.
  • Employees are not performing as expected and allows you to engage with them.
  • Encourage ownership.
  • Encourage self-improvement.
  • Evaluate your company’s training and development opportunities
  • Identify areas for improvement.
  • Improve employee engagement.
  • Improve motivation.
  • Improve performance.
  • Improve productivity. 
  • Improve profit.
  • Improve team morale.
  • Offers the chance to conduct a Job Evaluation where you can review Job Descriptions for employees and amend them as required.
  • Provides an opportunity to discuss an employee’s strengths and weaknesses in line with the expectations of their role.
  • Retain high-performing employees. and
  • Reward accomplishments.
  • Salaries are competitive?
  • The employee’s position and the value of the said position in the external job market.

There are many benefits to holding regular salary reviews at your company:

  • Factors in any agreed compensation or bonus schemes.
  • Offers your employees the chance to receive compensation that matches their work performance. 

The review can also be used as an opportunity for you to explore with staff where they think their development needs are and once collated for the entire staff group this can be used to inform your training plan and training needs for the coming year.

The following tips and strategies can help you implement an effective salary review process in your company:

  • Be clear on your objectives.
  • Identify any pay disparities within your organisation.
  • Manage expectations. and
  • Set clear top-down objectives.

Once you have a view of overall capability across the organisation this very neatly allows you to develop your succession plan and if one of your key staff does decide to follow a new pathway then you have already started to plan their replacement. This can help you gain valuable insight into your employees and show them that you value and appreciate their work.

Salary reviews offer the opportunity to carry out a Job Evaluation where you can review Job Descriptions for employees and update them, or create more appropriate ones, as required.

Job Evaluation

Job evaluation is a recognised process to fairly, and equitably, determine the relative value of different jobs within an organisation. It is the process to assess jobs not the people doing the job and compares jobs with each other in a systematic way to determine the value/worth of a job in relation to other jobs within the organisation. The results of a job evaluation process is used to rank jobs and using the resulting ranking will determine a pay structure. The process of job evaluation is the output provided by job analysis.

In short, job evaluation seeks to rank all the jobs in the organisation and place them in a hierarchy (job family) that will reflect the relative worth of each. Importantly, this is a ranking of jobs, not people. The ranking that results is used to determine the organisation’s pay structure.

Firstly, an analysis is made of the jobs in the organisation, with particular attention given to the tasks and skills involved in performing them.

This list of the specific duties of a particular job is called a job description.

Four Steps in Job Evaluation:

1. Gathering data for job analysis:

Collect information – job analyst accurately capture all of the content in the job. It is very important to capture both similarities and differences between jobs. Ensure accurate details within job descriptions to allow jobs to be correctly evaluated.

2. Selecting compensable factors:

Compensable factors are the factors the organisation chooses to reward through differential pay. The most typical compensable factors are skill, qualifications, knowledge, respon­sibility, and working conditions.

3. Evaluating job using certain methods:

Use one of the four fundamental methods for job evaluation.

4. Assign pay to the job:

The end product of a job evaluation exercise is a hierarchy of jobs in terms of their relative value to the organisation. Assigning pay to this hierarchy of jobs is referred to as pricing the pay structure. This practice requires a policy decision on how the organisation’s pay levels relate to their competitors.

Importance of Job Evaluation:

Whenever two or more people perform different work for a third, the need exists for some kind of job evaluation.

The third person, the employer, must somehow arrive at a rate of pay for each job which will not only:

  • Be competitive in attracting and holding employees but also
  • Be seen by them as related to the relative difficulty of their jobs.

If the employer establishes pay rates which fall short of either or both of these pay goals, employee dissatisfaction with pay usually will result in:

  • Inability to attract employees.
  • Loss of good employees.
  • Low morale and
  • Low productivity are some of the business problems which often are associated with dissatisfaction about pay.

Of the two pay goals, meetings market rates and achieving satisfactory internal pay relationships the latter has greater priority.

First, the internal pay relation­ships are more visible to employees. If perceived by employees as being unfair, out of line, and arbitrary, pay rates within the company can be a continual source of discontent, for employees are reminded of the internal inequities every working day.

Secondly, an equitable internal pay hierarchy is a prerequisite to establishing sound and workable policies concerning pay progression for employees.

Finally, a thought- out and agreed-upon set of internal relative values for jobs aids greatly in establishing an informed company posture relative to outside pay levels.

Aims and Objectives of Job Evaluation:

The overall aim of job evaluation is to assess and evaluate the nature of the work to be done in a particular job; the key tasks to be carried out, and the balance, difficulty, value, frequency, and importance of these. Skills, qualities, capabilities, and attributes are matched up, and a market value placed on them, with particular weightings as necessary or desirable.

Jobs are then placed in a ranking order matching them up against

  • Grades.
  • Job titles. and
  • Salary scale(s).

The establishment of proper wage differentials for company jobs is necessary to bring forth the required calibre of labour and to encourage employees to train for skilled jobs. Moreover ratings (occupation differentials expressed as labour grades ‘or numerical point values) are necessary for the establishment of logical and practical company wage rate and salary schedules.

In firms where such logical wage and salary differentials have not been established, compensation patterns are often irregular and chaotic since they will have evolved from traditional attitudes, arbi­trary decisions, expediency, and favouritism.

In such cases, jobs that call for greater effort, skill, and responsibility may pay less than jobs requiring fewer of these attributes; and individuals in the same or similar occupations may receive widely varying compensation. Morale is consequently low and performance poor since employees keenly feel these inequities, and management cannot explain the incon­sistencies on a logical basis.

Job Evaluation is a complex process that requires the skills of suitably trained people to complete it.

As with all your HR management needs, we can support you in designing a Job Evaluation and associated Salary Review as part of your business processes. We will ensure that not only is it cost effective for your business but that it is also fair and equitable.  We will provide support for you to create accurate job descriptions and an appropriate salary scale that reflects their experience, knowledge, skills, and effort made by your employees when carrying out their duties.

So, if you wish to retain your best staff, increase employee engagement, morale and productivity leading to improved profits, please contact us on 07375 097443 or you can book your appointment here.

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