Job levelling is a systematic process that HR teams use to define and compare job roles within an organisation. It’s often referred to as job evaluation or job classification.
This process is used by organisations to evaluate and categorise roles within the company based on factors such as level of responsibility, skills and knowledge, impact on the business, and the complexity of tasks.
It creates a structured framework for companies to standardise how roles are evaluated and aligned with the organisation.
From an employee perspective, it helps to make clear what is expected of them in a particular role, and how their work and responsibilities fit into the broader company structure.
In this article, we’ll look at job levelling, and why it matters.
Job levelling offers several key benefits:
A number of different factors are considered in job levelling, such as skills, responsibilities, experience, knowledge, and the impact of the role on the organisation.
There are several different methods used by organisations, which range from very structured processes based on quantitative data to more, informal, less structured systems that utilise qualitative data.
Here are some of the most common.
Ranking, or job slotting
In this method, positions are directly assigned to predetermined grades or salary levels based on a quick comparison with benchmark positions. Job descriptions are compared to established role profiles and then placed in the most appropriate grade.
This method is faster and less resource-intensive than other job evaluation methods, making it particularly useful for smaller organisations or when evaluating new positions. However, it can be less precise and more subjective than other evaluation methods, potentially raising concerns about accuracy and fairness.
Job classification
Job classification is a more structured approach which involves systematically categorising positions into grades based on predefined criteria. In contrast to job slotting, it uses a more detailed analysis of job characteristics against established grade definitions.
This approach can produce greater consistency across similar roles, the development of a clear organisational structure, and standardised pay ranges.
From a pay equity perspective, this more systematic approach is easier to explain and justify. The drawbacks are that implementation can be time-consuming, while the potential rigidity in grade definition can make it a challenge to accommodate unique roles.
It’s also a system which requires regular reviews to maintain relevance.
Factor comparison method
Factor comparison is a quantitative job evaluation method that evaluates jobs by comparing them against factors or criteria (such as skills, effort, responsibility, and working conditions). It involves evaluating jobs on a factor-by-factor basis.
This is a more analytical and detailed job comparison approach which better supports pay equity and pay transparency. It’s also more effective for unique jobs because each role is considered individually.
The potential downsides are that factor comparison can be complex, time-consuming, and requires significant expertise to implement. It can also be expensive to maintain, and HR teams may face resistance due to its complexity.
Point factor method
The point factor method is essentially an evolution of the factor comparison method. It builds on factor comparison by assigning numerical points to factors. Each factor (such as skill, effort, responsibility) is broken down into levels, with specific points allocated to each level.
A questionnaire is developed so that points can be assigned for each factor for a job role. The points are then added up to produce a score. This score is then matched against the levelling structure to determine the job level. Each level has a predefined total score range so the jobs are automatically sorted into levels via their total score.
This method allows organisations to adjust the relationship between points and pay more easily. The structured nature of this method provides greater objectivity and consistency in evaluations. It still requires significant time investment in developing and maintaining the point system and factor definitions.
Competitive market analysis
This approach focuses on external data, using job descriptions to compare jobs to identical or similar positions in the external marketplace. Pay data is collected from published sources and the value of the position within the competitive market is determined.
This approach helps organisations to consider their positioning on compensation and is used by many companies to assess internal pay equity and the competitive value of individual positions.
Job evaluation is seen as a critical tool in moving towards pay equity and in turn enabling pay transparency, as it provides the basis for evaluating different jobs to determine whether fair compensation is being paid
With the EU Pay Transparency Directive due to come into force in June 2026, job levelling will become key for many companies affected by the legislation.
Job evaluation provides a systematic, objective framework to assess the relative worth of different jobs within an organisation.
The more structured approaches outlined here should help to ensure that any pay differences are based on legitimate job-related factors rather than bias or discrimination.
Though this will involve some time and effort, it will help organisations comply with equal pay legislation and promote workplace fairness.
In summary
By standardising roles, job levelling carries a number of benefits, enabling companies to promote equity, improve talent management, and support employee growth.
With pay transparency legislation being introduced around the world, and more specifically the EU Pay Transparency Directive, job levelling will play a key role in assessment of equal pay.
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