Job classification is one of the requested types of studies in many organizations. It is a system for objectively evaluating and ranking positions in an organization, unlike performance reviews that assess an individual’s performance in a job. Classification systems use structured and quantifiable pay grades, or levels, based on the positions’ required skills, experience, education/licenses/certifications, responsibilities, authority, and working conditions. Note that these are the position’s requirements, not what the person in the job has for skills, etc. We often look at the person because we can’t separate the person and the job, but this is where we can get tripped up.

In the position, the duties and responsibilities are measured or weighted to determine their relative level. For example, a classification plan compares the differences between an entry-level accountant and an entry-level salesperson, and also looks at the difference between an entry-level accountant, the accounting department manager, and the organization’s controller.

The objective of a job classification plan is the establishment of internal equity, with a graded hierarchy of jobs within the organization. A compensation study often includes external comparisons as well, where similar positions in other organizations are compared for similarity and then compensation to determine external market rates for equivalent jobs.

So, what are some of the considerations when comparing internally?

• Technical or specialized skills
• Managerial skills
• Human relation skills/emotional intelligence
• Environment in which the job thinking takes place
• Challenge presented by the thinking to be done
• Freedom to act
• Impact/gravity of decisions
• Scope/abilities (licenses, etc.)
• Skill level
• Knowledge of job
• Influence of job on overall productivity
• Pressure on position – internal/external
• Decision making/Responsibility/Judgment
• Supervision/Coordination of people/work
• Complexity of tasks
• Variety of tasks
• Degree of precision required
• Work pressure/physical effort

In a tight labour market, sometimes employees and employers lose sight of what compensation should be based on. Instead, we sometimes get pulled into increasing compensation for squeaky wheels, some of whom use the threat of leaving. If an employee is giving an ultimatum of leaving unless they receive a pay raise that overcompensates for the position, give thought to how long one pay increase might maintain them, if they are irreplaceable, and if you will lose others because of a possible perceived pay unfairness. It really is best to look at the big picture before reacting.