Job classification is an important part of the HR process, not only because it allows you to recognize and describe job roles, but also because classification can be essential to organizational structure. Most job classification systems evaluate job components to determine their relevance and relative value, both comparative to other similar roles outside the organization, and those inside the organization.
While job classification systems vary, this enables you to use information that is already available to build hierarchy, pay structures and compensation, and channels for advancement.
The Value of a Role Inside an Organization
Job classification works to define the structure of a job as well as its value to the organization, through a process of job evaluation, where the value, responsibilities, and impact of each role is reviewed.
This means they are typically classified based on multiple contributing factors such as authority and autonomy, complexity of work, consequences of error, scope, and responsibility.
- Freedom and Autonomy – Is work performed under strict guidance and policy, or left up to the employee?
- Complexity of Role – How complex are skills required, problems, and depth of knowledge or expertise?
- Consequences of Error – What is the impact if a mistake is made?
- Scope – What is the total scope of the role? How does it spread across departments or teams? Is it significant to a specific department?
- Responsibilities – What is the role supervising? How much? How difficult is it? (resources, people, tools, etc.)
- Communication – Who is the employee communicating with, what are they communicating, and how often?
Hierarchy and Organizational Structure
In terms of hierarchy, this kind of ‘broadband’ classification enables you to create an upward structure, where employees can be reclassified into new roles when they take on more responsibilities. By recognizing all the components, you can easily evaluate if an employee’s added value changes as their role does.
As a result, you can reward skill and thought leaders, who take on large responsibilities such as no margin for error or managing large workspaces – versus only promoting and rewarding management.
A comprehensive job classification system makes it easier to determine the appropriate salary grade or pay scale for an employee – even a new one – based on the components and value of their role. For example, the United States Human Resources Department of California uses a job classification system in which many roles are divided into levels A, B, and C, enabling them to recognize seniority in responsibilities and tasks, even in what is otherwise the same role. In turn, this also helps to remove instances of discrimination, because anyone contributing at the same level should receive the same pay across the organization.
Performance and Appraisal
Identifying job roles and impact makes it easier for managers and supervisors to handle performance reviews. By reviewing expected added value, managers can compare actual output to more easily identify high and low performers. Similarly, creating a broad job classification system assists with career and succession planning as well as recruitment by defining what is expected at each level or class.
A job classification system is an investment, but it contributes to organizational structure in numerous ways. From aiding in recruitment to helping with salary and performance, properly defined job classification simplifies and improves structural management.