Common Job Evaluation Methodologies for base salaries

The base salaries should be fair and transparently set using the compensation policy. The compensation policy has to define the job evaluation methodology used in the organization to categorize all the job positions into correct levels to assign the right optimum base salary.

Human Resources can use several methodologies for the job evaluation and the decision about the right methodology is fully on Human Resources and top management of the organization.

The most common job evaluation methods are the following ones:

• Managerial decision - it is the best job evaluation methodology for the small companies, where the management can have the overview about the job content, roles and responsibilities of different units in the organization. When the managers are the part of the Job Evaluation Committee and the managers are fully recognized and respected, this job evaluation method is one of the best to be used.
• External Job Evaluation Methodology - the company can use the external methodology, which can be provided by the external consulting company, like HayGroup, PwC or Ernst and Young. The organization can use fully recognized job evaluation methodology, it is pretty cheap and the organization can easily participate in Pay Surveys
• Internal Job Evaluation Methodology - the large organization can develop the internal job evaluation methodology, which can be easily explained to the internal customers and can combine the external job evaluation methodology and the managerial decision job evaluation. The internal job evaluation methodology needs a lot of time to be implemented and the investment does not bring a clear benefit to many organizations.

The job evaluation methodology can be simple and it can be used just for setting the correct base salary level or it can be extended and it can be used for many other HR Processes.