Mercer Maximising The Value of Job Evaluation
Mercer Maximising The Value of Job Evaluation
Mercer Maximising The Value of Job Evaluation
PARTICIPANT LIST
PARTICIPANT PROFILE
STUDY RESULTS
CLARITY
Job evaluation provides a common language in a
multinational, diverse organisation. It allows
transparency and better communication regarding the
CONSISTENCY
81%
cited uniformity and
Given the economic uncertainty in recent years, consistency in grading
companies have placed more emphasis on grading systems as the strongest
systems to achieve consistent, controlled, and equal factor supporting the
treatment of the workforce and it pays off. overall business strategy.
The economic crisis brought the costs and risks associated with this inconsistency into sharp focus. Over
the last five years, we have seen our clients increasing their compensation consistency. Now, when we
ask, organisations say they pay 70% to 80% of their employees about right.
Job evaluation plays a crucial role in the creation of compensation consistency as it supports the
development and management of international workforce grading systems. Eight out of 10 respondents
cited uniformity and consistency in grading systems as the strongest factor supporting the overall
business strategy.
Job evaluation also can assist in the area of equal pay. By assessing jobs based on their contributions to
the company bottom line, rather than simply relying on titles and market value, HR can create greater
internal pay equity, meet equal pay obligations, and
better satisfy commitments to affected and interested
parties both inside and outside the organisation. These
are all important steps as this issue gains increasing
importance and visibility.
CONTROL 67%
reported that their
The structured management and organisation of jobs in investment in job evaluation
all businesses, functions, and regions has become a
paid off in reducing the risk of
prerequisite for multinationals and a key accountability
for HR. misallocating resources and
ensuring an optimal return on
The study revealed that companies using a proven job their investment in people.
evaluation methodology are much more effective in
supporting business leaders in making decisions,
managing increased organisational complexities, and
controlling labour costs and investments. In fact, 67% of
Companies say they achieve a return on investment in less than three years. HR can add financial value
through investing in the right talent, as well as saving labour costs.
Job evaluation supports a broad spectrum of HR policies and managements long-term operational
strategy. Coupled with workforce metrics, it can provide even more ways of adding value.
New needs call for new approaches, yet we cannot discount some of our most foundational ideas such
as job evaluation as they still prove to be useful and powerful solutions.
The durable goods manufacturing industry (20%) had the highest representation among study
participants followed by the high-tech sector (16%) and consumer goods (13%).
Other includes: Other Non-Manufacturing (3%), Retail & Wholesale (3%), Other Non-Durable Goods Manufacturing (3%), Mining & Metals (2%).
60% 14%
8% 10% 8%
No. of responses
130
More than half of the organisations report revenue above EUR1 billion.
14% 9%
Less Than 100 Million 100 Million < 250 Million
No. of responses
Organisations Revenue (EUR)
121
Other (2%)
No. of responses
129
One-third of the respondents believes that job evaluation is most suitable for the Non-Tariff group
(all).
58% 34%
All employees Non-Tariff (All)
8% 0%
Non-Tariff (Only Executives) Tariff* (Only)
Three-quarters (72%) of respondents rank organisational alignment in the top five benefits, followed
by transparency (65%), standardised and lean grading process (65%), and global application (54%).
Participants rank the benefit of controlling cost as important but with a lower degree.
90%
90%
72%
72%
65% 65%
65% 65%
54%
54%
37%
37%
31% 31% 28%
31% 31% 26%
28%
26%
Note: Organisations were asked to indicate top five answers; therefore, the total exceeds 100%.
More than half of the respondents believe that job evaluation assists them in compensation
planning (72%) and the grading process (59%). This support, in turn, helps HR maintain external
and internal consistency.
89%
89%
89%
72%
72%
72%
59%
59%
59%
41%
41%
41%
20%
20%
20%
14%
14%
14%
5%
5%
5%
Note: Organisations were asked to indicate top three answers; therefore, the total exceeds 100%.
Other includes: internal equity; global consistency; international transfers; critical perspective on internal organisations; recruitment and
development; objective comparison across functions and operating companies; annual performance interview, and, consequently,
development and talent management.
Strategic workforce planning ranks second (65%), followed closely by aligned resource planning
(62%).
81%
65%
62%
36%
81%
65%
62%
19% 18%
36%
12%
8%
19%
18%
12%
8%
Note: Organisations were asked to indicate top three answers; therefore, the total exceeds 100%.
Other includes: building salary structures based on global methodology; succession planning; supporting intra-company moves;
organisational competitiveness; fairness and transparency in compensation/promotion/grading; providing basis for various processes that
support attraction and retention; control of the personal costs; salary benchmarking and establishing salary structure; global consistency in
remuneration policy (at senior management level); remuneration policy; and supporting current spin-off.
It should be noted that all respondents believe that job evaluation helps, to more or less of an
extent, in improving evaluation consistency.
67% 31%
To a great extent Somewhat
2% 0%
Very Little Not at all
54% 7%
Strongly Agree
Agree
Neither Agree nor Disagree
Disagree
Strongly Disagree
26% 13%
Percentage of Organisations
Strongly Agree or Agree 67%
Neither Agree nor Disagree 26%
Disagree or Strongly Disagree 7%
60%
60%
60%
60%
60%
60%
60%
17%
17%
17%
17%
17%
17%
15%
15%
15%
15%15%
15% 17%
15%
4%4%4%
4%4%
4%
4% 3%3%
3%3%
3%3%
3%
Less
Less
Less
than
Less
Less
than
than
6than
Lessthan
Months
66Months
Months
666Months
Than Months6 Months
Months 66Months
Months
666Months
Months
toto
1toYear
Months 1to
to
1to
Year
1Year
11Year
Year
Year 1 to
111to
3to
11Years
to3to
3to
Years
Years
33Years
Years
Years 3 to
333to
to
5to
353Years
5to
5to
Years
Years
55Years
YearsYears 5 Years
Years
55Years
Years
55Years
Years
orMore
or or
More
orMore
or
More
orMore
More
Without implementation, 20% report the length to be more than one month. With
implementation, that percentage drops to just 7%.
20% More
More than
Than 44 Weeks 7%
Of the 85 participants that achieved cost savings after implementing job evaluation, close to
one-third achieved cost savings of over 10%.
84% 16%
Achieved Cost Savings No Cost Savings
Based on 101 responses.
32%
32%
20%
20% 19%
19%
13%
13% 12%
12%
2%
2% 2%
2%
Less than 3% 3% < 5% 5% < 10% 10% < 20% 20% < 30% 30% <40% > 40%
Based on 85 responses.
1%
Strongly Agree
Agree
3%
Neither Agree nor Disagree
Disagree
Strongly Disagree
63% 33%
Percentage of Organisations
Strongly Agree or Agree 96%
Neither Agree nor Disagree 3%
Disagree or Strongly Disagree 1%
Three-quarters (75%) were able to save anywhere from 0% to less than 3% of costs when
designing pay packages by using job evaluation.
83% 17%
Achieved Cost Savings
No Cost Savings
Based on 108 responses.
28%
28%
26%
26%
21%
21%
14%
14%
11%
11%
Based on 90 responses.
88%
88%
7%
7% 5%
5%
Neutral - neither savings nor Yes, cost savings observed No, cost increase observed
increase
CONFIDENTIALITY
To ensure the confidentiality of all data, a minimum number of observations are required in order for
statistics to be displayed.
Three organisations must report at least three observations for a variable in order for the mean to
be displayed.
In single-answer questions, the total may not equal 100% due to rounding.
As more than one submission from the same organisation was accepted, the number of responses
might be higher than number of participants.
GLOSSARY
Job evaluation: Job evaluation is a systematic assessment of the complexity of job content,
discretion, and requirements, independent of any preconceived standards of remuneration, to
determine the essential worth of the job. This process results in a coherent job hierarchy and structure
grades, scores, levels, or ratings by which jobs can be compared with other jobs to determine their
relative worth based on a system that is readily understood, fair, and defensible for all stakeholders.
Maximising the Value of Job Evaluation is published by Mercer Talent Information Solutions Data Mining & Insights, www.
imercer.com/global. Copyright 2015. All Rights Reserved.
ABOUT MERCER
Mercer is a global consulting leader in talent, health, retirement,
and investments. Mercer helps clients around the world advance
the health, wealth, and performance of their most vital asset their
people. Mercers 20,500+ employees are based in more than 40
countries, and we operate in more than 140 countries. Mercer is a
wholly owned subsidiary of Marsh & McLennan Companies (NYSE:
MMC), a global team of professional services companies offering
clients advice and solutions in the areas of risk, strategy, and
human capital.