What is job classification?
Job classification refers to differentiating jobs based on the type of work and responsibilities they demand. The classification determines the duties and titles for each job position and its rank in the company’s hierarchy.
The HR department, led by job analysts, usually undertakes work classification. You can do work classification independently if you run a small business or a startup. However, outsourcing or consulting with a job analyst can help you produce more accurate and effective classifications.
Related: Employment Classifications: Quick Reference Guide
Types of job classifications
1. Job families
A group of jobs from the same career field form a job family. In an organizational setting, a department can be equivalent to one job family since positions within it are related, even though they may not be similar.
An example of a job family is finance, which is often a separate department in many organizations. The job classification chart may assign the finance department the duty of managing the company’s revenue, including handling its expenditure through analysis and future planning.
The Chief Financial Officer or CFO is considered the head of the finance job family. However, the title and roles might vary depending on the department’s size and needs. An expansive finance department can have a CFO to handle long-term planning and a finance director to manage daily operations.
In essence, a job family is like a smaller organization within a larger company. However, positions within a job family can relate to each other in a way that doesn’t mimic the organization’s overall structure. Work classification can help outline the functions and design of the job family based on its unique needs.
2. Job functions
Job functions are essentially the workgroups contained within a job family. Each functional unit calls for people with specific educational backgrounds, work qualifications and skills to handle related or complementary tasks.
For example, accounting and auditing are two functions within the finance job family. A job classification system assigns accountants the duty of tracking and recording all the company’s financial transactions. People who qualify for the job function unit may require a bachelor’s degree in finance, business or a related mathematical field.
3. Job
Jobs are the individual components that make up a functional unit. Each job comes with specific duties, responsibilities and accountabilities.
A work function unit contains multiple jobs. Often, a big organization with large departments has more jobs within each functional unit.
To illustrate, an accounting job function may have cost accountant jobs, bookkeeper jobs and controller jobs.
4. Job level
People with the same job can have different education and work experience levels. A job classification system creates tiers within a job function to reflect these differences.
These tiers denote seniority levels and the status of a job within the organization’s overall hierarchy.
Consequently, junior cost accountants occupy a lower level than senior cost accountants, who rank below accounting managers.
5. Job roles
Work classifications break a job down into roles assigned to different individuals. Thus, people can have different roles even if they have the same title. For example, one junior accountant can handle accounts receivables while another manages accounts payables.
Depending on the organization’s size, there can be some overlap in the roles individuals handle.
Related: Volunteer vs Employee Classification
Benefits of work classification
Work classification is a significant undertaking, but its payoffs are worth the effort. If done well, job classification can help you:
- Create organizational structure: Most companies use a traditional hierarchical structure that sees the CEO and other C-suite executives at the top of the pyramid, with managers and other employees at the bottom. While this structure is easy to imitate, your company’s actual needs should determine its structure. Conducting work classification will help you see which job roles your business needs and how different roles interact. Depending on size and operations, your company may not require multiple C-suite executives. Since employees often take up a lot of overlapping functions, you can create a novel structure that improves your competitive advantage.
- Outline hiring needs: The job classification process reveals information that determines what type of people should be recruited to fill different job positions in the company. Work classification relies heavily on accurate job descriptions to determine the duties and qualifications required for individual job roles. Recruiters can have an easier job of sourcing and selecting suitable candidates when armed with the requirements outlined in the job classification.
- Chart compensation plans: A
job analysis
identifies the responsibilities, level of accountability and risks that come with each job role. These factors are invaluable when determining each job’s average salary range and benefits package. For example, if a job runs a high risk of personal injury, you may have to offer occupational accident insurance as a benefit.
- Conduct performance evaluation: Since the work classification outlines the duties and responsibilities of each job role, it can be used to assess employees and see if they meet the desired performance levels. A job classification also shows when employees achieve expertise in their roles and areas where their skills are in demand. Job classification is, therefore, crucial for promotion and
succession planning
in your organization.
- Determine career training and development needs: Evaluating employee performance can help identify skill gaps that hinder the proper fulfillment of the duties outlined in a work classification. You can use the analysis to determine which training programs can help fill the gaps. The evaluation can also help you decide the proper training modes that will fit the purpose and select the employees whose roles will benefit from the training.
Related: 3 Training Plan Templates to Develop Your Employees
How to conduct job classification
1. Collect information
Job classification should be a data-powered process that investigates each task to determine where it falls in the work structure. You should collect information on:
- Knowledge and skills required to accomplish each task
- Behaviors and interactions jobs demand
- Resources needed, including money, time and equipment
- Level of performance and working conditions jobs demand
- The necessary level of supervision
You can garner this information from within and outside the company. If you already have employees, use interviews, questionnaires and observations to collect the data.
Analyzing your competitors to see which classifications they use and how effective they are can help you make more efficient groupings.
2. Analyze the data
Job analysts often create job classifications based on averages from the data they collect.
When analyzing your collected information, try to see which natural patterns emerge. Take note of duties that look similar or overlap. Observe the physical, behavioral and mental abilities different tasks demand.
A pattern for education and training qualifications should also emerge from the data. Such information and patterns help you create job descriptions better suited to how you want to run your company.
3. Create a job classification system
The process of creating a job classification system often starts from the bottom. Identify the job family, function and individual roles to which job descriptions and requirements belong.
Remain open to the idea that two closely related descriptions and requirements can belong to completely different families. For example, a bachelor’s degree in mathematics may suit the marketing department better than finance.
You should also be prepared to undo and redo different parts of the process as you get a clearer picture of your organization.
A successful job classification process will provide a system you can use even as the organization changes in response to market forces.
Related: How to Create an Employee Compensation Plan that Attracts Candidates
