Job Grading

Two teams use different titles for work with similar responsibility, such as senior analyst and manager, even though both make comparable decisions, and job grading creates a common basis for comparing roles before setting pay or career paths. Begin with accurate job descriptions that record purpose, duties, decision authority, skills, working conditions and scope.

Grading based only on title or the current employee's salary can lock old inconsistencies into the new structure. Job evaluation compares roles internally, where an analytical method may score defined factors and a non-analytical approach may rank or match whole jobs.

CIPD explains both approaches and the role of external market pricing in setting competitive pay. Choose factors relevant to the organisation, such as knowledge, problem-solving, responsibility and impact, and apply them consistently, testing the scheme on varied jobs before finalising it because weighting choices can affect results.

A grade groups roles judged broadly similar in size under the chosen method, and pay bands may be attached to grades. CIPD describes a pay structure as a collection of grades, levels or bands and distinguishes progression within a band from promotion to a higher one.

Pay can also reflect market demand, experience and agreed policy, and a salary range needs clear minimum and maximum values, with an explanation of how starting offers, pay review and progression work. A useful pay-position measure is current salary minus band minimum, divided by band maximum minus band minimum, so at $16,000 within a $14,000 to $20,000 range the position is $2,000 / $6,000, or about 33%.

Never use the calculation when maximum equals minimum, because the denominator would be zero. A pay position below zero or above 100% indicates the salary is outside the stated band, which may require a review rather than automatic adjustment.

Review potential bias, since jobs traditionally held by one group may have been undervalued if the factors overlook their skills or demands, and equal-pay rules and job evaluation standards vary by jurisdiction, so consult relevant local advice when decisions affect compensation. A grading exercise can reveal current pay differences, but that does not mean every difference must disappear overnight or that all differences are justified, so investigate causes and plan lawful, affordable corrections with a clear timetable.

Employees should understand what the grade represents and how a role can be reviewed, without implying that a revised job description guarantees promotion, and a review or appeal route can catch missing duties and inconsistent scoring using evidence about the role as normally performed, not only a one-off project. Evaluate new roles before hiring where possible, otherwise a salary promised during recruitment may put pressure on the team to force the job into an unsuitable grade.

Regrade a role when its lasting responsibilities change materially, not whenever the employee performs well, since strong individual performance may deserve a pay or development discussion within the existing structure. Too many grades can create tiny distinctions nobody can explain and too few can hide real differences in authority and pay, so choose a structure managers can maintain, keep version control over job descriptions, factors and band decisions, and review periodically to separate changes in job size from changes in the price of a skill, remembering that for owners grading is a decision framework to use with market evidence, legal review and sensible judgment, not a mathematical certificate that every offer is fair.