Job Classification

What is “job classification”?

Job classification refers to the process of evaluating and jobs based on responsibilities, tasks, duties, authority level, and impact on an organization. Keep in mind that these parameters are based on what the job or position requires. It is not based on the education, work background, and skills of the people who do the job. Once these components have been objectively defined, the job is classified or group on a standardized scale across the organization. 

The job classification process and results vary from company to company. While there may be similarities that could exist among companies, no two companies are identical. 

What kind of companies conduct job classification? 

Job classification is usually conducted in large companies with a large number of employees who make up the workforce. Also, job classifications are performed in organizations that have formal and structured pay grades that correspond to each job such as in civil service and government employment. 

Startups and small to medium-sized companies can also have a job classification system. The process does not need to be as formal. These companies can start by grouping similar roles together to have a sense of consistency and structure within the company. 

What are the benefits of job classification? 

For organizations that have numerous positions, job classification provides structure and definition. By identifying the different components required to do a job such as duties, responsibilities, level of accountability, and authority, job classification also helps recognize the job’s value and contribution to the company. 

By giving structure to the company, it will be easier for employers to reclassify employees to new roles because of the upward structure. By defining the elements of a position, employers can compare the employee’s performance against the job requirements for evaluation. This can be a basis for giving employee recognition and rewards. 

Another benefit of an objective and in-depth job classification is that organizations can determine a suitable salary grade or pay scale levels for each position. If a company’s job classification is objective, accurate, and strictly followed, the organization can veer from making any discriminatory move. Because the job classification is based on the position and not on the person in the position, it helps in avoiding discrimination. 

Lastly, job classification helps in performance reviews. Managers can refer to the key components and responsibilities attached to a position to evaluate the work performance of an employee. They can identify work output and see who employees have met expectations, exceeded expectations, or did not meet expectations. 

What are the potential drawbacks of job classification? 

One of the disadvantages of job classification is the potential for built-in biases in classifying jobs. The job evaluator may have misconceptions about a job which can cloud their judgment. This can lead to job classifications that are subjective and inaccurate. Once the job classification is compromised, using it as a basis for pay scale, performance appraisals, and others might be deemed unreliable as well. Another potential drawback of job classification is that some jobs may be similar to each other which will make defining them a challenge. Some jobs might be too broad and seem to fit into more than one category or group. 

What is a common example of job classification? 

An example of a widely used job classification system is the Korn Ferry (Hay) System. It used to be called the Hay Classification System. This method uses three parameters in classifying all jobs. These three are: 

• The knowledge required to do the job
• The problem-solving required in doing the job
• The level of accountability involved in doing the job

The Korn Ferry (Hay) system compares jobs based on the above mentioned measures. This method offers a job standard and structure in organizations.