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A job evaluation makes a systematic comparison of jobs within an organization in order to assess the relative worth and thereby establish a grading structure. Generally, a higher grade denotes a higher value of the job to the enterprise, and thereby more rewards.
The Decision Band method (DBM) of job evaluation bases itself on the premise that the value of a job to an organization depends on the level of responsibility, which is in turn manifests as the extent of decision making involved in the job. It assumes that since all jobs require incumbents to make decisions, decision-making is a logical and equitable basis to compare jobs. The methodology involves a three step process of allocating jobs into bands, grading jobs within a band into two, and then assigning sub grades to each grade, all based on the nature of extend of decisions taken as part of the job.
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Step 1: Banding
- Band F jobs are where the incumbents take policy level decisions that fix the scope of organizational activities and provide direction to the organization. Common designations in this band include CEO, Director, and President, and such people usually remain the ultimate decision making authority of the organization.
- Band E jobs include positions where the incumbents take programming decisions, or decisions that seek to accomplish or implement the decisions made by positions in Band F. Most department and functional heads group in this band, and they formulate department or functional level goals aligned with the organizational goals set by Band F, and allocate resources for implementation.
- Band D comprises of middle managers who take interpretive decisions to implement and carry out goals set by people in Band F and E. They primarily concern themselves with how to use the resources allocated by the higher bands, and set directions and guidelines for the lower levels.
- Band C include supervisors, senior technical specialists and senior level support staff who execute the decisions made by people at higher bands. They decide the means or process to achieve specific objectives based on the directions and guidelines issued by Band D or above.
- Band B include jobs where the incumbent take operational decisions, such as how to implement the directive of the supervisor in band C or above. Such jobs have the power to make decisions on how and when to carry out the required operations, but cannot decide the operations per se. Job designations that fall in this and include foremen, head clerks, and senior floor level employees.
- Band A are unskilled or assembly line operators who make little or no decisions. The decisions they take, if at all are the speed of executing the tasks assigned to them, or the order of execution.
Some organizations categorize these bands in reverse, which means Band A involves decision making head-honchos and Band F involves the lowest level assembly line blue collar workers.
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Step 2: Grading
Coordinating jobs or jobs where the incumbent supervise or monitor the work of another employee in the same band enjoy a higher grade within the band, compared to jobs that do not supervise or monitor the work of others in the same band. This is regardless of whether such jobs require monitoring or supervising employees of a lower band. Band A, being the lowest band is usually exempt from such classification.
For example, an extremely skilled IT programmer in Band B may concentrate on developing codes, without any supervisory roles. Another employee in band B, even though not as competent as the skilled programmer when it comes to coding skills may nevertheless have a higher grade because of being the team leader who supervise other employees.
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Step 3: Sub-Grading
Grading provides an organization with a maximum of 12 grades, which may not differentiate relative worth adequately. In such cases, the decision band method provides for sub-grading grades based on ranking.
Sub-grading involves assessing the relative difficulty, complexity, and skills required of the job in comparison to the other jobs within the same Band and Grade. The factors used to measure such concepts include
- Extent of knowledge required to complete tasks
- Hard skills required for completing job tasks
- Soft skills such as communication skills and customer service skills required for completing job tasks
- The extent of time pressure the job involves
- Mental effort required such as alertness and concentration
- Extent of physical activity required for the job
- Need for care and precision in the job
- Working conditions
Such factors are measures using a scale and added up to rank jobs.
For instance, between two data processing jobs within the same grade, one job may involve multitasking, and greater alertness and concentration, whereas the other may be relatively easy. Applying sub-grades allow ranking without subjective judgments.
As a rule of thumb, each lower grade has three sub grades and each upper or higher responsibility grade has two sub grades. There is however, no set or fixed number of sub-grades, and organizational requirements decide the optimal number.
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Prof. Paterson at the University of Strathclyde, Scotland, initially developed the Decision Band. Patterson surveyed 60,000 employees from 70 organizations, and claims this method establishes a relationship among job profiles and wages. Of late, Fox Lawson Compensation Consultants has revised this method, which now finds successful application in many large industries and government departments such as State of North Carolina.
Job evaluation finds common application to determine employee pay levels. Success in determining pay using this method depends on having a comprehensive job description and a reporting system in place to understand the exact nature of job duties and responsibilities, as well as on-the-job characteristics and nature such as stressors, frequency of decision making, and other factors.
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- "Decision Band Method." http://www.foxlawson.com/govSector/articles/h2.cfm. Retrieved July 12, 2011.
- Micheal Armstrong (2003.) "Handbook of Human Resoiurce Management." Kogan Page Publishers. http://books.google.com/books/about/A_handbook_of_human_resource_management.html?id=2AGbuhlTXV0C.
- Ryuerson University. "Decision Band Method (DBM)." http://www.ryerson.ca/hr/management/job_eval/docs/je_decision_band_overview.pdf. Retrieved July 12, 2011.