Job Evaluation

An organisation must create structure and system (hierarchy) in order to be able to function and take decisions. What happen, in practice, is that the tasks that must be performed, are divided into manageable units and aligned with a specific post or position on the staff establishment.

If you create an organisation, you do so with a purpose; that is, you want to achieve an objective. This objective drive all the activities that are performance in the organisation. In order to be able to perform these activities, you must allocate resources to it. Resources are normally clustered together in terms of the so-called production factors (that is, factors required to produce). These are:

1. Human resources (labour)

2. Material (everything from land and buildings to vehicles, rent and stationery)

3. Capital (money to buy [or rent] labour and material [and information])

4. Information. This resource is intangible and used to inform decision-making about the other production factors, considering the purpose that must be achieved and the activities that will take place to achieve it.

As soon as an organisation grow beyond the ability of one person to achieve all the activities that must be performed to achieve the objective (purpose of the organisation) an organisational structure with more than one job on it starts to form. Normally at least one of these posts on the staff establishment will have more authority to take decisions than the other.

That is the first and most important element in the design of an organisational structure: Authority. Authority simply means the right to take decisions, which must then be implemented by subordinates. Control lies in-between decision-making and implementation. To explain this: Managers take decisions; workers implement the decisions, and supervisors control the activities of workers to ensure that the decisions of managers are implemented. In practice, most managers still perform (limited) operational tasks, and most workers take (limited) decisions. Supervisors do both.

If you are the “boss” in a business (organisation) nobody else has the right to make decisions without your blessing (approval). This process whereby the authority to take decisions and implement it is cascaded down from senior positions in the organisation to lower one, is called delegation (that is, the delegation of authority).

More senior positions (posts) on the staff establishment tend to focus more on making decisions, while operational (junior) positions focuses on performing tasks. However, this is not an absolute hard-and-fast rule. For instance, if your company is highly dependent on a qualified engineer to be able to achieve its objective[s], you may employee such a person. He or she will take orders from you (or another senior staff member) but may be paid a higher salary, because of the specialised skills they have.

(The term “staff establishment” refers to the different posts and positions on the organisational structure).

The questions to be answered when you develop an organisational structure are:

1. How “senior” will each of the posts on the staff establishment be, considering the level of decision-making responsibilities allocated to it?

2. What salary must be paid to the incumbent of a specific post?

The following are typical considerations that must be taken into account when the posts or positions on the staff establishment are analysed:

1. Responsibility: This is essential to each and every post on the staff establishment, including considering the resources (people, money, equipment, etc.) for which the job holder is responsible. It also considers the scale and nature of the resources and the degree of autonomy and authority the job holder has to manage them, and the impact of the job.

2. Decision-making and independence: How much important decisions must the incumbent of this post or position make, how regularly, and what level of complexity and/or independence are required to make these decisions?

3. Communication and Contacts: The job holder’s level of contact with those inside and outside the organisation. The purpose and frequency of the contacts together with the type and complexity of the information are also considered.

4. Knowledge: The knowledge required to fulfil the job responsibilities. This includes the range of knowledge, any formal qualifications, skills and previous experience required.

5. Conditions & Situation: The elements of this factor consider the extent to which the working situation and conditions are potentially dangerous, physically demanding, environmentally disagreeable and/or socially disruptive.

This process of analysing the posts on an organisational staff establishment is known as job evaluation; that is, the evaluation of jobs to grade it and appropriately place it on the organisational structure.