Using market prices outpaces all other methods of job evaluation, accounting for around 70% of all job evaluation exercises, according to a survey of 702 organisations by US-based professional body, WorldatWork and consulting firm, Empsight. Point-factor is the second-most prevalent method of job evaluation, but well behind market pricing at 16% to 20% prevalence, depending on job category.
Almost three-quarters of employers in the survey have a written compensation philosophy and a third specify the method of job evaluation used within this philosophy. However, the proportion of organisations with both a written compensation philosophy and prescribed job evaluation method has fallen slightly since a previous study in 2013. When it comes to senior management jobs, 15% of job evaluation is conducted by consultants.
Only half of organisations described the job evaluation used in their organisation as ‘very effective’, although a similar percentage did deem it ‘somewhat effective’. National and industry salary survey data is used to market price senior and middle-management jobs, with local surveys being more prevalent for lower-level roles. Between 40% and 50% of organisations use three or more surveys to price jobs.
Jeremy Feinstein, managing director of Empsight, said:
‘The new research supports our experience that companies market price the majority of their professional and executive positions to national surveys. We know that large, more complex organizations tend to benchmark their specialised jobs to highly relevant market data. As this study shows, companies competing in the 21st century workplace will need to dig deeper to evaluate long-standing, traditional jobs as well as new hot jobs such as big data/analytics, digital marketing and privacy.’