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Classification for Job Descriptions

Compensation specialists have several tools at their disposal to evaluate jobs and assign them a salary or pay rate, including job classification. Companies classify jobs to organize their compensation system, evaluate organizational effectiveness, establish career paths and, as Hay Group consulting firm notes, "maximize" existing talent by matching employees to positions. A job description includes the assigned job classification stated in terms of grade level, pay level or pay band.

Definition

Also referred to as job grading, classification entails assigning each position to a job family based on the type of work done and skills needed to perform that work. The salary or rate of pay associated with the job family determines how much money the job holder earns. Identifying the job families presents the biggest challenge to compensation specialists. Once established, the job classification system easily accommodates newly created positions and changes in the parameters of existing jobs.

Compensation

The primary advantage of job classification over other methods of evaluating jobs lies in creating pay bands or grades. Attracting and retaining the best people demand that jobs carry competitive renumeration in terms of salary and benefits. A compensation system also must be "equitable and legally defensible," adds Susan M. Heathfield, a organization development consultant. Government entities, public sector agencies and universities use the classification method of job evaluation. These organizations typically have multiple locations for which they must ensure equal pay for equal work at each site.

Talent Management

Conducting a corporate-wide job classification study can reveal areas where work is duplicated and overlaps can be eliminated to improve efficiency. It also serves to improve what the Institute for Job and Occupational Analysis calls "job utilization." Job utilization defines promotion opportunities within and across job families. Availability of clear career growth opportunities ranks among the top five reasons employees stay with a firm, according to research done by Spherion Human Capital Consulting in 2003.



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