Job Classifications: Frameworks, Examples, and Challenges

Job classification structures ensure fair compensation and career development by evaluating positions based on duties, responsibilities, and skill requirements. Though beneficial, outdated standards and rigid frameworks can limit talent growth and hinder recruitment for specialized roles.

By Douglas Wade, Attorney

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Table of Contents

1. What is job classification?

2. Examples of job classification

3. The method for job classification

4. Criticism of job classification

What is job classification?

A lot of HR regulations and hiring decisions are based on job classification. In this post, we present a helpful guide to job classification. In particular, we will define job classification, present a framework for job classification, and provide some examples of job classification.

The process of figuring out the relative importance of various positions within an organization is called job classification. This is significant since many HR decisions are based on the hierarchical rank that a job is assigned. Succession planning to more senior roles is made possible by a well-classified workforce, which also guarantees that senior occupations have greater performance and capability criteria and equitable, consistent, and fair compensation.

The army is one organization that uses job classifications, with levels like private, corporal, and general. A private is good at their job if they only obey orders, have fewer duties than the rank of corporal or general, and have no discretionary funds. A general receives higher compensation for their vital position, more obligations, and the need to think tactically and strategically.

Large enterprises, governmental organizations, and other public services like colleges frequently employ job classification. They are also frequently utilized in businesses like accounting or law companies that have highly regimented career pathways. However, a job classification structure becomes essential for companies larger than certain size.

Job classification is a particular approach to job evaluation. The latter is a methodical technique meant to assess a position’s worth. In order to provide a precise comparison, classification often use a framework consisting of jobs, families, and job functions.

It is crucial to remember that in terms of job classification, the job itself—rather than the individual—is assessed. It is possible for numerous persons to work at the same time, each with unique subtleties to their duties.

Each job belongs to a family of jobs, and each family of jobs is a component of a function. In this manner, the classification of employment makes sense intuitively and facilitates the quick classification of current and possible new tasks whenever appropriate. As was already mentioned, it serves as the foundation for a lot of HR regulations.

Examples of job classification

There are several methods for creating the various job functions and work families. There are, nevertheless, established methods for handling this.

Common job families include those in operations, marketing, sales, finance, human resources, R&D, customer support, shared services, and so on. The employment functions are defined in accordance with the family’s activities.

Different senior and junior positions are available in addition to this ranking. In the same way that a senior vice president will rank higher than a regular vice president, a junior director and a senior director will be ranked differently.

Establishing a fair wage structure is one of the objectives of classification, as previously stated. This is based on the previously described approach. This doesn’t mean, however, that a financial analyst and an HR analyst will be paid equally. Their individual responsibilities, the labor market’s supply and demand, and other variables all play a role in this.

The method for job classification

Since you now understand the fundamentals, the job classification process itself is simple.

Classification is the process of taking a job’s features and grouping them according to the classes we previously covered. The job definition, which might already be accessible, serves as the input. On the basis of the job description, you can then identify the job itself, the work family, and the job function.

After that, the work is categorized and inserted into the hierarchical structure.

Every job in the job classification has a pay grade connected to it based on the job description. This results in a pay system that is straightforward and simple to understand.

From a technical standpoint, job salaries are frequently determined using a point system that evaluates a position based on three criteria: i) necessary expertise; ii) ability to solve problems; and iii) accountability. This is also known as the point-factor approach, and it is one of several job evaluation systems.

Criticism of job classification

The system of job classification is frequently criticized.

Activities belonging to a higher category: There are many roles with duties that go beyond their “class.” Consider a worker who, despite lacking a title, has gradually assumed team lead duties. It won’t be feasible to compensate this person for the extra responsibilities in a rigid classification system short of giving them a promotion—for which they might not be qualified.

Classification of positions hinders quick advancement: Classifying jobs also prevents talent from developing quickly.

The standards are outdated: A large number of the standards were established in the 1990s and have not been updated. The process of evaluating a job might be expensive and take years. This indicates that the system is not set up to handle changing work responsibilities. Fun fact: Russia once had a communist classification system that dated back to the USSR. Numerous businesses continued to use that framework after the dissolution of the USSR, and many positions and classifications have their roots in it.

Unable to recruit elite personnel: Businesses with complex categorization schemes could find it difficult to draw in unique and outstanding workers. The fierce rivalry in the commercial sector makes it difficult for the government to hire cybersecurity specialists or data scientists. It is difficult to compete for these essential personnel because junior positions in these areas are tied to a pre-defined classification system with matching pay.

Collective bargaining: From an employer’s standpoint, job classification involves categorizing job functions and assigning a wage rate based on the profitability of those jobs; however, from a union standpoint, job classification simply refers to the tasks that employees complete and the compensation they are paid for completing them. This will result in a system that pays in the middle range, has few opportunities to reward exceptional ability, and has few entry-level positions—thereby undermining the original motivation of the company for using job classification.

For the majority of regular workers, job classification does offer a consistent structure and a somewhat simple career path, despite these disadvantages. Additionally, it keeps the worker from haggling over a pay that exceeds their contribution to the company.

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