What are the Types of Job Evaluation Methods? (Full Guide)

In an organization’s employment structure, job evaluation plays an intricate role in ensuring pay equality. It is a complex but vital process. Find out all there is to know about job evaluation, including the effective evaluation methods and what the entire evaluation process entails. Decode the nitty-gritty of job evaluation to understand the efficacy of the process for any organization.

The evaluation process is systematic in that it breaks down and evaluates the relative worth of various tasks in a company or organization. The primary goal of the job evaluation process is to put jobs against each other to rank them in terms of intensity, qualitative and quantitative methods. This evaluation results in creating a payment structure that promotes fairness, equity, and consistency for all employees in an organization. Moreover, the requirements for each job must be outlined in a clear way, with everyone getting paid what they deserve.

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What is the Job Evaluation Process?

In the job evaluation process flowchart, the first step is gathering all information and facts necessary for the job description. From the information collected about varied tasks, you derive what value a job adds to an organization. Determining job value is followed by the addition to the organization’s job structure. Individual evaluation of tasks also promotes the equal distribution of work, encompassing minorities and all genders in the company structure.

Job evaluation is supported in the employment sector. Influential advocates in the business sector push for the utilization of this evaluation process. Cordis’s report, 49% of privately owned European organizations, have an official job evaluation structure. SMEs make up a maximum of 3%. This percentage accounts for several organizations that lack structured payment practices, careers based on requirements, and skills advancement for their employees.

What are 6 Job Evaluation Methods?

Here are a few methods of job evaluation:

1. The Ranking Method

The ranking option is a job classification method that evaluates jobs based on how the tasks relate to each other, value-wise. Here are some aspects of the ranking method of job evaluation and basic job analysis options.

The cons include:

  • The ranking method has no regard for compensation rates in the existing market
  • This method will not work for large organizations unless jobs are categorized into job families, e.g., professional levels. However, it is better applicable to smaller entities

2. The Classification or Grading Method

This is the job grading method that encourages grouping according to general job characteristics. This grouping is done while considering pre-established grade classifications, thus reflecting skill levels and individual responsibility at handling tasks. This classification method is straightforward and does not waste time. However, the system is bound to inflate job grades since some of them get pushed to higher levels than they deserve to be.

Downfalls include:

  • It compares and classifies individual jobs in job families with predetermined characteristics
  • One size fits approach pushes some tasks into job grades that they do not fit in. This approach presents a significant challenge since organizations are diverse

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3. The Point–Factor Method

This evaluation method singles out all job evaluation factors, which add merit to an employment position. Classification of job factors is in groups, according to; skill, responsibility, and effort. The elements are then given a point value (numerical/weighted). The individual factor points are consolidated to derive a specific value for a complete task or job.

The point-factor method has the following downfalls:

  • It does not portray the value of jobs in the existent market
  • It formulates a hierarchy, although it lacks components of external nature

4. The Factor Comparison Method

This job evaluation method permits job factor identification under five primary groups with expertise, personal drive, responsibilities, and working conditions in mind. As opposed to assigning a point value, each factor gets valued according to dollar value.

Cons of the factor comparison method are:

  • It is a complicated system that countable organizations use
  • The process complicates communication with employees
  • Subjectivity is unavoidable to a substantial degree

5. The Competitive Market Analysis Method

The competitive market analysis approach focuses on external data. To make possible the right market price, you must conduct job evaluation. It forms the foundation for arriving at accurate market prices. Job descriptions are used in job comparison through side by side comparison to similar positions in the marketplace. Information on pay is collected, and the determination of the position’s relative worth in the market occurs.

Employee evaluation methods

This approach is best method yet due to the following:

  • This approach appreciates the organization’s goals for market visibility (compensation philosophy)
  • The competitive market analysis method evaluates an organization’s internal value compared to the market data

6. Market Pricing Goals

Updated pricing in the market is vital as several organizations utilize it to determine:

  • Worth of individual employment positions within an organization
  • How a company ranks in the external market
  • An organization’s structure of pay against its philosophy on compensation
  • The proficiency of pay programs in achieving compensation objectives
  • Equity in the internal workplace


Thus, job evaluations processes is unavoidable. It contributes towards creating an efficient working and employment system. Every member of your organization feels appreciated according to what is required of them. Lack of a job evaluation structure hinders the growth and progress of an organization and its employees. Upon proper use of the job evaluation process, organizations are assured of obtaining happy staff. All roles are outlined, payment structures are well defined, and available designs back up existing systems. As a result, value is added to the entire company.


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Josh Fechter
Josh Fechter is the founder of HR.University. He's a certified HR professional and has managed global teams across 5 different continents including their benefits and payroll. You can connect with him on LinkedIn here.