A job evaluation can refer to one of two things, depending on how an employer is using the word “job.” A job evaluation can refer to a review of a worker’s performance or an assessment of a position at a company based on its relation to the organization chart. Understanding how companies perform both types of job evaluations will help you better prepare yourself for keeping your job, getting a raise or obtaining a promotion.
When a business assesses a position regardless of who holds it, a job evaluation focuses on the importance of the position to a business. As small businesses grow, they often create positions based on immediate needs, rather than based on proactive strategies to address future needs. This can lead to redundant or unnecessary positions because business owners don’t want to fire employees and shift them to other positions.
How Does it Fit?
To evaluate positions, businesses use an organization chart. A business might analyze its current organization chart and create a second chart that includes only the positions it needs, rather than the ones it currently has. During this evaluation exercise, the business creates a job description for the person holding the position. Using the company's current organization chart, it lists the duties of each current position holder, evaluating whether the employees are serving the optimal needs of the company’s organization goals.
When a business refers to a job evaluation as a review of the performance of an employee, the company uses a variety of objective and subjective benchmarks. In addition to looking at the job description of the employee, the company will review the employee’s productivity, efficiency, attendance, cost, teamwork skills and potential management potential. The company might meet with managers, co-workers and subordinates to get an objective feel for how the worker is performing her job. Some companies use a point system to score job performance, using a mix of subjective and objective criteria.
Return on Investment
Whether a business is assessing a position’s worth or an employee’s performance, it might make the evaluation based on return on investment. The company will attempt to calculate the dollar value to the company and then subtract the total cost for the position or employee. This lets the business know if the position is worth the investment, or if the employee is producing enough value. This type of evaluation lets companies determine if they should expand a position or make it smaller and more focused. It can help a business learn whether or not an employee needs additional training or if he needs to be terminated.