Payroll Manager Tutorial | Job Classification

 

Job Classification

Jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. The job classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used. Because of differences in duties, skills and knowledge, and other aspects of trades and labor jobs, job grading standards are developed mainly along occupational lines.

The standards do not attempt to describe every work assignment of each position in the occupation covered. The standards identify and describe those key characteristics of occupations which are significant for distinguishing different levels of work. They define these key characteristics in such a way as to provide a basis for assigning the appropriate grade level to all positions in the occupation to which the standards apply.

Advantages

• The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method. Disadvantages
• Classification judgments are subjective.
• The standard used for comparison (the grade/category structure) may have built in biases that would affect certain groups of employees (females or minorities).
• Some jobs may appear to fit within more than one grade/category.

Factor Comparison

A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are:

• Skill
• Responsibilities
• Effort
• Working Conditions

Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics.

• equitable pay (not overpaid or underpaid)
• Range of the factors (for each factor, some jobs would be at the low end of the factor while others would be at the high end of the factor).

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