Not too long ago I had the opportunity to spend several days with a client working through a job evaluation exercise. What makes this client somewhat unique is that the CEO has a human resources background, which certainly makes explaining compensation principles a lot easier. What struck me, however, was that this CEO, despite a strong background in compensation, had never been exposed to job evaluation — an essential component not only of a “best practice” compensation program, but of any compensation program that is actually going to work. If a top-notch HR executive hadn’t heard about this, what in the world is going on everywhere else?
The truth is — the compensation profession has lost its focus on theory and method, and has fallen in love with tools. That’s a problem, because the vast majority of companies don’t have internal compensation professionals, and many HR folks are at the mercy of the vendors trying to get them to buy things to make their lives easier. Don’t write a job description, use “DescriptionsRUs” to create one for you. Don’t bother finding out what your people do, or what you need them to do — this cool piece of cut and paste software will let you create something hopelessly meaningless, but probably ADA-compliant. You don’t need a salary structure, get “SurveySolvesAll” which will pinpoint to within four decimal points the appropriate pay for an individual by just typing in a zip code and a generic job title. A few months ago I was invited to a seminar called “why your HR spreadsheets stink” which implied that using a spreadsheet was a horrible waste of time when a nice piece of I’m sure very expensive and quite generic software was available. The worst offense? A bulletin from World at Work announcing that most employers use market pricing as their method of job evaluation. Why the worst? Well, look it up, folks, market pricing is by definition excluded from the concept of job evaluation, which is a method for ascertaining the internal value of a job. Continue reading