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how does an organization know how much it should pay different employees and if you feel underpaid how should you make your case or if creating a new wall in your organization how do you know how that role should be compensated these are all questions that are answered through the application of job evaluation hi I'm Nelly and welcome to this learning bite today you will learn what job evaluation is why we're doing job evaluations and what the four most common ways are to evaluate jobs I will also tell you why some companies pay more than others later in this video but before I do don't forget to like this video subscribe to our Channel and hit the notification button let's talk about Job evaluation [Music] so what is job evaluation job evaluation is the process of determining the relative value of different jobs in an organization simply put job evaluation is how HR determines how much value each role brings to the organization and what a fair compensation would be per role generally speaking there are two different approaches to job evaluation and four different methods of conducting a job evaluation process but before we move on to the nitty-gritty why should you consider job evaluation is it that important for your organization the main goal of any job evaluation process is to achieve pay equality this is why job evaluations are often developed by HR together with workers councils unions and other social Partners job evaluation ideally focuses on the value of the job itself and not on the qualities or characteristics of the job holder in a perfect world each job is ranked ing to its work for the organization and corresponds to several pay brackets of course if a job holder brings more knowledge and experience to the table and through that is able to go beyond their job description they will be rewarded with a higher pay bracket but the basic idea is to level the playing field for everyone and to promote paid transparency and equality between all job holders thus ensuring pay equality between genders and minorities let's now answer the question how do you conduct a job evaluation you now know that we want to analyze the value of each job in the organization and ranking them in relation to one another there are two different approaches to job evaluation analytical and non-analytical both methods leads to a ranking of jobs but they do it differently in the analytical job evaluation method the job is broken down into its individual components and each component is scored based on this the job receives a total score and is done compared to all the other jobs in the non-analytical job evaluation methods jobs are ranked in their entirety with limited focus on individual aspects after all let's take a closer look at how these methods differ starting with the non-analytical ones in the job ranking method jobs are ranked take the jobs on the left and rank them based on the type of activities complexity of the job Knowledge and Skills required working conditions and their level of responsibility this ranking is often done by a job evaluation committee based on this ranking the salaries are aligned with the ranking of the jobs this approach works best for smaller organizations job classification the job classification method aims to classify jobs into job families job functions jobs and roles take Bill Works in accounting his job family is finance his job function is accounting his job as a junior accountant and his role is a junior accountant who has taken on quite a few extra responsibilities since joining So based on the activities of the job the job is placed in a hierarchical structure as shown on screen there's a pay grade associated with each shop job function and job family that means that an HR director is paid less than a chro and the chro may be paid less than a CFO job classification is not common and when it is used it is mostly used in governmental organizations on the other hand analytical methods are the most commonly used these consist of the point factor method and market pricing Factor on the analytical side of our model we have the point factor of factor comparison here we analyze the compensable factors compensable factors are the factors that an organization pays or compensates for these include things like required education training experience verbal ability ability to manage flexible shifts night work ability to listen and so on the more demanding compensable factors a job has the higher the pay and lost but not least we have the market pricing method this method evaluates your job by comparing it to what other companies pay for similar roles in similar Industries companies like Willis Tower Watson Deloitte Mercer aeon and Radford offer Global compensation databases that allow you to identify the average pay for any job a company can then decide to offer the market average or go higher or lower and NGO with a clear societal purpose may offer lower wages as people may work there for other reasons than money while many tech companies compensate above the market because they want to attract the best talent this is why some companies pay more than others of course salaries are only one part of the full Total Rewards package to learn more about total rewards watch this video here this method is most commonly used but it does come with some pitfalls assessing the worth of a job solely based on market value means that internal value and internal Equity are not taken into account market pricing can perpetuate Marketplace inequalities defeating the purpose of job evaluation this is good to be aware of when implementing market pricing in your organization and there you have it in this video we learned what job evaluation is why it is an important tool for your organization and you learned four job evaluation methods which method do you use at your organization let us know in the comments below and before you leave don't forget to subscribe turn on the notification Bell and like this video bye foreign [Music]