The process by which jobs or jobs that have comparable duties and responsibilities are clustered is called classification. These clusters, usually termed as grades/categories form the hierarchy of the organization.
Let there be 3 grades of workers, A, B and C, dived according to the nature of their job and responsibility assigned.
Below is the table describing the jobs categorized in the 3 grades:
Type of work
Graduate, MS Office especially excel
Masters, Proficient in MS office, Excellent communication skills
Supervision of several projects
Possible jobs categorized
Importance of job classification:
• Builds the organization’s hierarchy
• Determines the job’s worth
• Effective for comparing jobs with respect to the job content, responsibility, skills required etc.
• Helps to devise a strong and befitting compensation package.
• Effective for organizational planning.
• Budgeting becomes easier in case of expansion
• Organizationally standardized
• Easier to categorize new jobs
• Classification may be subjective
• One job may seem to fit more than one grade
• Categorization standards may be biased. Example, Jobs with frequent travelling may prefer males only
• Job classification criteria differ with respect to organizations. So, this may give rise to disputes during mergers. Example, Company A is being acquired by B. These companies have different classification standards. As a result, Mr. X, who was in grade 3 of Company A is now being assigned to grade 2 of company B. This might also mean a reduced pay package.
There may be other candidates like Mr. X and this might give raise to widespread discontent among the new employees and create an organization wide unrest.