Glossary Term: Job Evaluation

What are the 4 job evaluation methods?

Four commonly applied job evaluation methods are:

• Ranking Method: Jobs are ranked in order of their perceived importance in relation to other positions.
• Point-factor method: Elements of a job that add value and worth to the position are identified and separated into different categories, such as skill, responsibility and are given a numerical point value.
• Classification method: Characteristics of a job are grouped together to reflect their level of skill and responsibilities on the basis of predefined grade classifications.
• Market analysis: External benchmarking data is used to inform the decision making regarding the value of a job in a given organization.

Why is job evaluation important?

The formal evaluation of a job reduces subjectivity and allows organizations to build data-driven, evidence-based, and transparent compensation structures.