What is Job Leveling and Why is it Important?
Job leveling is a vital foundation for reward and talent management programs. Career paths, compensation, learning and development, performance management, and workforce planning, all stem from a comprehensive job leveling process.
Today, companies and startups struggle with job leveling due to lack of resources (i.e., time). With endless online examples of job levels, and conflicting methods companies use to level their jobs, it’s easy to feel overwhelmed. Google for example, has so many levels they accommodate half career steps, while Zappos has a holacracy, where it’s a flat org and no one has a title. The purpose of job leveling is to establish a common framework that uniquely works for your organization. It helps HR identify gaps (e.g., examine span of control), manage rewards and talent, and also establishes title standards across the combined organization.
The goal of job leveling is to ensure titles align with employees’ roles and level of responsibilities, which can help drive employee engagement. One of the top reasons why employees leave a company is due to perceived lack of growth and development opportunities. Established requirements for promotion and a clear career path improves employee engagement and retention, and equips managers to successfully set expectations as part of performance feedback. Employees won’t need a crystal ball to see their future potential in the company.
CultivatePeople has helped over 50 global tech companies with their full compensation processes. Job leveling is typically the first step we take in assessing market competitiveness of compensation for companies. We’ve streamlined the job leveling process to the essentials – no fluff needed!
5 Steps to Job Leveling:
1. Involve the right people. Job leveling cannot happen without collaboration – you’ll need to connect with leaders that understand the current state and future strategy for each functional area.
2. Stay focused on the role. Job leveling starts with defining role expectations and aligning its level based on those expectations. Keep discussions about roles, performance, and pay separate from individuals.
3. Keep it simple. When creating job levels, make it clear yet comprehensive to everyone in the company, from the top down.
4. Take a step back. Look at all the positions in the company and evaluate the business needs and career progression paths available. No clear progression? Make one.
5. Communicate. Communicate. Communicate. Establish a framework for leaders and managers to have ongoing conversations that effectively communicate the opportunities that are, or will become available as the company grows.
When you’re done, you’ll be providing guidance and confidence for managers to have tough conversations…like when employees ask, “Why am I not a Senior Engineer yet?” We know firsthand how daunting a job leveling exercise can be. If you need help working magic with the foundation of your company structure, contact us.