Job evaluation is a process to set the “size” of a job.
The Remuneration Authority uses job evaluation to inform its understanding of the context, content and responsibilities of a role and to enable it to test that its determinations on pay fairly reflect the responsibilities of the job.
Job evaluation allows the Authority to compare different roles using a consistent methodology. Evaluating a role provides a benchmark to compare how much the role is being paid compared to other similar “sized” positions.
Methods to approaching job evaluation
There are several approaches to job evaluation.
There are job title match surveys, which assume, for example, that all “Marketing Managers” basically do the same things and that there is a single market for these roles.
The second approach is job matching - job title plus representative activities in which organisations match their roles to the job that best represents their position, and looks for the size of organisation to get a reasonable comparison.
These two approaches rely on jobs being the same or a close match to the generic, and on other organisations (or the job holder in surveys such as IPENZ and ICANZ) correctly matching to the right position.
The third option is to use a factor based system, such as the Korn Ferry Hay Group methodology, which looks at the specific content of the job and assesses each aspect against a set of standard scales and descriptions to find the most accurate requirements of the role, when performed to a fully competent standard. It therefore is responsive to organisations that have different combinations of functions or responsibilities within roles.
The resulting job size can then be accurately matched to other jobs of the same size (within or across functional, industry or sector boundaries) or slotted into the appropriate band or grade within an organisation’s pay framework.
The Authority uses the Korn Ferry Hay Group system
The Authority uses the Korn Ferry Hay Group to independently evaluate the positions for which it sets pay. The Korn Ferry Hay Group methodology of job evaluation is widely used in the public and private sectors in New Zealand and is the most widely accepted method used worldwide.
The methodology makes judgements in three major areas (known as factors):
Know-how, which is the combination of knowledge, skills and experience required for fully acceptable job performance. Know-How is considered in three dimensions:
- Practical / technical knowledge
- Planning, organising and integrating (managerial) knowledge
- Communicating and influencing skills
2. Problem solving
Problem solving: The span, complexity and level of analytical, evaluative and innovative thought required in the job - and refers to know-how to identify, delineate and resolve problems. Problem solving is considered in two dimensions:
- Thinking environment (freedom to think)
- Thinking challenge
Accountability: The scope given to the job holder to direct resources of all kinds and to influence or determine the course of events, and their answerability for the consequences of their decisions and actions on the organisation. Accountability is also considered in three dimensions:
- Freedom to Act
- Magnitude - Area of Impact
- Job Impact
Job evaluation process
A senior consultant, from Korn Ferry, who is experienced in evaluating senior executive roles in both the public and private sectors is engaged by the Authority to “size” its roles.
To build up their understanding of the context, content and responsibilities of a role, the senior consultant will draw on:
- the position description/role profile
- the organisation chart/structure and other supporting documentation
- an interview with the role holder.
After the senior consultant has assessed the skills, complexities and accountabilities of the role a report with a recommendation is prepared for the Authority’s consideration.
Job evaluation is primarily used to inform the setting of statutory officers’ remuneration. The Authority uses other approaches to inform its determinations of members of Parliament, judicial officers and local government elected members remuneration.