NRC: Job grades, job evaluation, and Jobscore.
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Page 11

1.3 Determining the Grade Boundaries.

By using job evaluation to assess each job, or a set of benchmark jobs representative of all jobs, the jobs can be arrayed in ascending order of their job evaluation or points. The next step is to divide the jobs into groups where each group consists of positions with a similar number of job points. These groups form the basis on which individual grades in the structure are built. There is no magic formula for determining where the boundaries between groups should fall, and is possibly best done by inspection to see where natural breaks between groups of jobs appear. Where such significant gaps do not exist, the jobs with common features as indicated by the job evaluation factors are grouped so that a clear distinction can be made between the characteristics of the jobs in different groups. It should be possible to demonstrate that the jobs grouped into one grade resemble each other more than they resemble jobs placed in adjacent grades. The width of each group or grade in terms of job evaluation points should represent a significant step in demand as indicated by the job evaluation scheme. This process can yield the final number of grades required for the structure. Further considerations include:

  • The range and types of roles to be covered by the structure. (There may be jobs in the organisations that are genuinely outside of the structure.)
  • The range of job sizes to be accommodated in the structure. (How far down in the organisation should the structure apply, and how far up?)
  • The number of levels in the organisational hierarchy. (The more levels inherent in the organisation, the more levels are likely to be required in the grade structure, if only because of the size and complexity of the organisation. Grades should neither consciously nor unconsciously be aligned with organisation level.)
  • The greater the number of grades the smaller their width and vice versa. (This is associated with considerations on what is regarded as a desirable range of salaries for grades, taking into account the need for scope in salary progression and the size of salary increments).
  • The problem of 'grade drift' (unjustified upgrading in response to staff or line-manager pressure, or because job evaluation has been applied in a lax manner). This can be exacerbated if there are too many narrow grades.

1.3a How many Grades?

Typically, conventional graded structures tend to have between eight and twelve grades. Research covering a sample of 2,000 organisations in the United Kingdom found an average of ten grades covering managerial, executive and profession staff. The research also found that the number of grades was not significantly affected by the size of the organisation: Although one could reasonable assume variation between the two extremes of organisation size. Larger organisations may also tend to adopt different structures for different employee classes, e.g. a separate structure for senior management, differing structures between technical and non-technical employees, etc. Larger organisations may also operate in more than one industry where norms differ markedly, e.g. manufacturing and retail, or finance and travel.

Other research shows a 15 to 25 per cent differential between grades (between the midpoint of one grade to the next). Fifteen percent has been shown to be large enough to provide an adequate increase between grades, and sufficient to avoid excessive argument about marginal cases. It is also of such size as to allow adequate flexibility to accommodate a wide range of jobs.

If the difference between grades is too small, say less than 10 per cent, many jobs would become borderline and frequent reassessments would be needed to ensure they were still in the correct grade. Job evaluation is not sufficiently discriminating a tool (nor is any other) to identify very fine differences in marginal cases. In these cases, jobs could be upgraded to the next grade without adequate increases in evaluation. This tendency to 'grade drift' erodes the structure's validity.

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