What is job grading?
For HR professionals who work with scaling companies push to improve employee engagement and retention, they need new systems in place to give employees career pathways to grow in their chosen profession
Rebekah Alexander
Total Rewards
April 8, 2022
Introduction
What HR professionals often here from leadership is a request for a new salary for a raise or promotion. Too often, teams process these requests one-by-one based on the whims of the requestor, especially if it's a C-Suite leader.
To get out of "number crunching mode" and into "talent strategy mode", we need to start building a "career pathway system" that makes these requests as simple as looking up a new value on a spreadsheet or in a piece of software.
That "career pathway system" is better known as "job grading" which we'll cover in this article.
What is job grading?
Job grading, or a job grade, is a numerical structure used to define like roles across very unlike job functions, assessed through the job evaluation process for common and comparative:
• Impact
• Scope
• Influence
• Decision-making authority
• Strategic or tactical input
• Depth of knowledge within or across teams
Among other things. It is the basis for defining the meaning and value of each role in an organizational design structure.
While many associate job grades with salary ranges, a job grade structure is only the foundation of a salary structure—they are not interchangeable. Job grade structures are developed first, and salary bands may be developed later. A single job grade can correspond to several salary structures, such as country-specific or job family-specific ranges.
Want an experienced partner to help build your Total Rewards program?
Why do we need job grading?
The need for job grading becomes readily apparent when facing compliance obstacles like the pay transparency laws 8 states have already adopted, or the audit risk posed with properly classifying employee's as exempt or non-exempt. But aside from compliance risks, job grading is a fundamental kicking off point for solving employee engagement issues and a key pillar of performance management, administrative efficiencies, and predictive data analytics.
Have you ever entered an organization where everyone you meet is a Director or Senior Manager? When companies are small, they often have little to trade on besides titles and perhaps stock. While this helps get candidates in the door, once an employer reaches a few dozen employees, individuals begin to wonder about their career path opportunities and what it means comparatively to be called a "director".
Without job grading, employees who want to understand their career path opportunities are left without line of sight. Without a common understanding of each title's traits and requirements, team by team inequities emerge, with some leaders opting for a more gratuitous titling and others adopting a strict approach. Inevitably, title inflation occurs and teams begin responding to title and promotion pressure in a reactionary way, leading to employee resentment.
Why not be gratuitous with job titles? Without a sound job grade foundation, the recognition that title promotions are often meant to provide is undermined. Titles no longer have true meaning of accomplishment, but instead become markers of entitlement. Inflating titles not only fosters disengagement, but doing so without clear expectations and definitions sets employees up for failure in their new roles, promotes unrealistic career growth expectations, and costs employer's money.
Employer's are unable to evaluate whether they get the ROI they require at each level in the org; it becomes impossible to decipher whether someone is over- or underpaid, and employer's may have awarded titles for work an employee is not competitively able to perform in the market, but just opened the door for broader counteroffers and poaching.
What does good job grading look like?
The benefits of job grading reach far beyond compensation equity, although that’s usually the first thing that comes to mind. Other things have far and wide implications after implementation.
1. Recruiting efficiency: our businesses depend on getting the right people in the job at the right time. With job grading and salary ranges, recruiters can sift through candidate profiles with more accuracy and speed, delivery appropriate candidates to hiring managers every single time, with a sound basis for compensation negotiations.
2. Career mapping and employee engagement: With a baseline job grading structure in place, we can begin to delve into the specifics of "what does it mean to be an Associate Software Engineer" in our company and ensure these traits are standardized across the org. Employees gain line of sight, know what to expect out of their role and what their performance will be assessed against. This trust--that the process is not just a "black box" but has credible, sound reasoning and structure, fosters employee engagement and satisfaction.
3. Leverage data insights: employees are our biggest investment. How can we ensure we're getting the return on investment? Using common evaluation criteria and job principles help us leverage insights into our candidate success rate, organizational gaps, and business efficiency.
4. Manager confidence: managers are hungry to provide the information and context that employees request. With a job grading structure, managers are better informed to understand how organizational principles manifest in their specific team, and can feel confidence answering employee questions about their promotability and performance.
5. More equitable pay: pay shouldn't just be delivered to the loudest employee, or the most determined manager. Setting standardizations of job evaluation, job titles and corresponding ranges ensure we are paying our employees fairly, every time.
Reach out to Work Party Services to understand how we can help you evaluate your business for years of future success with job grading.
What is job grading?
For HR professionals who work with scaling companies push to improve employee engagement and retention, they need new systems in place to give employees career pathways to grow in their chosen profession
Rebekah Alexander
Total Rewards
April 8, 2022
Introduction
What HR professionals often here from leadership is a request for a new salary for a raise or promotion. Too often, teams process these requests one-by-one based on the whims of the requestor, especially if it's a C-Suite leader.
To get out of "number crunching mode" and into "talent strategy mode", we need to start building a "career pathway system" that makes these requests as simple as looking up a new value on a spreadsheet or in a piece of software.
That "career pathway system" is better known as "job grading" which we'll cover in this article.
What is job grading?
Job grading, or a job grade, is a numerical structure used to define like roles across very unlike job functions, assessed through the job evaluation process for common and comparative:
• Impact
• Scope
• Influence
• Decision-making authority
• Strategic or tactical input
• Depth of knowledge within or across teams
Among other things. It is the basis for defining the meaning and value of each role in an organizational design structure.
While many associate job grades with salary ranges, a job grade structure is only the foundation of a salary structure—they are not interchangeable. Job grade structures are developed first, and salary bands may be developed later. A single job grade can correspond to several salary structures, such as country-specific or job family-specific ranges.
Want an experienced partner to help build your Total Rewards program?
Why do we need job grading?
The need for job grading becomes readily apparent when facing compliance obstacles like the pay transparency laws 8 states have already adopted, or the audit risk posed with properly classifying employee's as exempt or non-exempt. But aside from compliance risks, job grading is a fundamental kicking off point for solving employee engagement issues and a key pillar of performance management, administrative efficiencies, and predictive data analytics.
Have you ever entered an organization where everyone you meet is a Director or Senior Manager? When companies are small, they often have little to trade on besides titles and perhaps stock. While this helps get candidates in the door, once an employer reaches a few dozen employees, individuals begin to wonder about their career path opportunities and what it means comparatively to be called a "director".
Without job grading, employees who want to understand their career path opportunities are left without line of sight. Without a common understanding of each title's traits and requirements, team by team inequities emerge, with some leaders opting for a more gratuitous titling and others adopting a strict approach. Inevitably, title inflation occurs and teams begin responding to title and promotion pressure in a reactionary way, leading to employee resentment.
Why not be gratuitous with job titles? Without a sound job grade foundation, the recognition that title promotions are often meant to provide is undermined. Titles no longer have true meaning of accomplishment, but instead become markers of entitlement. Inflating titles not only fosters disengagement, but doing so without clear expectations and definitions sets employees up for failure in their new roles, promotes unrealistic career growth expectations, and costs employer's money.
Employer's are unable to evaluate whether they get the ROI they require at each level in the org; it becomes impossible to decipher whether someone is over- or underpaid, and employer's may have awarded titles for work an employee is not competitively able to perform in the market, but just opened the door for broader counteroffers and poaching.
What does good job grading look like?
The benefits of job grading reach far beyond compensation equity, although that’s usually the first thing that comes to mind. Other things have far and wide implications after implementation.
1. Recruiting efficiency: our businesses depend on getting the right people in the job at the right time. With job grading and salary ranges, recruiters can sift through candidate profiles with more accuracy and speed, delivery appropriate candidates to hiring managers every single time, with a sound basis for compensation negotiations.
2. Career mapping and employee engagement: With a baseline job grading structure in place, we can begin to delve into the specifics of "what does it mean to be an Associate Software Engineer" in our company and ensure these traits are standardized across the org. Employees gain line of sight, know what to expect out of their role and what their performance will be assessed against. This trust--that the process is not just a "black box" but has credible, sound reasoning and structure, fosters employee engagement and satisfaction.
3. Leverage data insights: employees are our biggest investment. How can we ensure we're getting the return on investment? Using common evaluation criteria and job principles help us leverage insights into our candidate success rate, organizational gaps, and business efficiency.
4. Manager confidence: managers are hungry to provide the information and context that employees request. With a job grading structure, managers are better informed to understand how organizational principles manifest in their specific team, and can feel confidence answering employee questions about their promotability and performance.
5. More equitable pay: pay shouldn't just be delivered to the loudest employee, or the most determined manager. Setting standardizations of job evaluation, job titles and corresponding ranges ensure we are paying our employees fairly, every time.
Reach out to Work Party Services to understand how we can help you evaluate your business for years of future success with job grading.
What is job grading?
For HR professionals who work with scaling companies push to improve employee engagement and retention, they need new systems in place to give employees career pathways to grow in their chosen profession
Rebekah Alexander
Total Rewards
April 8, 2022
Introduction
What HR professionals often here from leadership is a request for a new salary for a raise or promotion. Too often, teams process these requests one-by-one based on the whims of the requestor, especially if it's a C-Suite leader.
To get out of "number crunching mode" and into "talent strategy mode", we need to start building a "career pathway system" that makes these requests as simple as looking up a new value on a spreadsheet or in a piece of software.
That "career pathway system" is better known as "job grading" which we'll cover in this article.
What is job grading?
Job grading, or a job grade, is a numerical structure used to define like roles across very unlike job functions, assessed through the job evaluation process for common and comparative:
• Impact
• Scope
• Influence
• Decision-making authority
• Strategic or tactical input
• Depth of knowledge within or across teams
Among other things. It is the basis for defining the meaning and value of each role in an organizational design structure.
While many associate job grades with salary ranges, a job grade structure is only the foundation of a salary structure—they are not interchangeable. Job grade structures are developed first, and salary bands may be developed later. A single job grade can correspond to several salary structures, such as country-specific or job family-specific ranges.
Want an experienced partner to help build your Total Rewards program?
Why do we need job grading?
The need for job grading becomes readily apparent when facing compliance obstacles like the pay transparency laws 8 states have already adopted, or the audit risk posed with properly classifying employee's as exempt or non-exempt. But aside from compliance risks, job grading is a fundamental kicking off point for solving employee engagement issues and a key pillar of performance management, administrative efficiencies, and predictive data analytics.
Have you ever entered an organization where everyone you meet is a Director or Senior Manager? When companies are small, they often have little to trade on besides titles and perhaps stock. While this helps get candidates in the door, once an employer reaches a few dozen employees, individuals begin to wonder about their career path opportunities and what it means comparatively to be called a "director".
Without job grading, employees who want to understand their career path opportunities are left without line of sight. Without a common understanding of each title's traits and requirements, team by team inequities emerge, with some leaders opting for a more gratuitous titling and others adopting a strict approach. Inevitably, title inflation occurs and teams begin responding to title and promotion pressure in a reactionary way, leading to employee resentment.
Why not be gratuitous with job titles? Without a sound job grade foundation, the recognition that title promotions are often meant to provide is undermined. Titles no longer have true meaning of accomplishment, but instead become markers of entitlement. Inflating titles not only fosters disengagement, but doing so without clear expectations and definitions sets employees up for failure in their new roles, promotes unrealistic career growth expectations, and costs employer's money.
Employer's are unable to evaluate whether they get the ROI they require at each level in the org; it becomes impossible to decipher whether someone is over- or underpaid, and employer's may have awarded titles for work an employee is not competitively able to perform in the market, but just opened the door for broader counteroffers and poaching.
What does good job grading look like?
The benefits of job grading reach far beyond compensation equity, although that’s usually the first thing that comes to mind. Other things have far and wide implications after implementation.
1. Recruiting efficiency: our businesses depend on getting the right people in the job at the right time. With job grading and salary ranges, recruiters can sift through candidate profiles with more accuracy and speed, delivery appropriate candidates to hiring managers every single time, with a sound basis for compensation negotiations.
2. Career mapping and employee engagement: With a baseline job grading structure in place, we can begin to delve into the specifics of "what does it mean to be an Associate Software Engineer" in our company and ensure these traits are standardized across the org. Employees gain line of sight, know what to expect out of their role and what their performance will be assessed against. This trust--that the process is not just a "black box" but has credible, sound reasoning and structure, fosters employee engagement and satisfaction.
3. Leverage data insights: employees are our biggest investment. How can we ensure we're getting the return on investment? Using common evaluation criteria and job principles help us leverage insights into our candidate success rate, organizational gaps, and business efficiency.
4. Manager confidence: managers are hungry to provide the information and context that employees request. With a job grading structure, managers are better informed to understand how organizational principles manifest in their specific team, and can feel confidence answering employee questions about their promotability and performance.
5. More equitable pay: pay shouldn't just be delivered to the loudest employee, or the most determined manager. Setting standardizations of job evaluation, job titles and corresponding ranges ensure we are paying our employees fairly, every time.
Reach out to Work Party Services to understand how we can help you evaluate your business for years of future success with job grading.
Let's see if you'd be a good fit for our services.
Let's see if you'd be a good fit for our services.
Let's see if you'd be a good fit for our services.