Job Grade - Meaning, Importance & Example

Published by MBA Skool Team, Last Updated: September 11, 2021

What is Job Grade?

Job grade is defined as a collection of jobs that are considered having the same value or worth for compensation purposes. Job grade classification helps in the recruitment process, compensation system and training and development planning of the employees in the organization.

Importance of Job Grade

The jobs that form a part of a specific job grade have similar job descriptions and requirement of knowledge, skills and abilities, thus making the pay scale similar for all those jobs. It is very similar to pay grade where all jobs having the same pay are grouped together, except that these jobs have similar descriptions and specifications whereas jobs in the same pay grade might not have the same descriptions and classifications.

Job Grade is an important concept for companies where there are large number of employees working on various things but have lots of common requirements with some variations. They can first define the job grade and then the roles and positions. The overall compensation structure would remain same though.

Job Grade Example

Let us take an example of a technology services company. The company might need developers for various projects they have but they would want some particular technology focus like Java or C/C++ or any other technology so they may have different job roles created such Developer(Java), Developer (C++). The job descriptions for both might be very similar apart from the fact that each focusses on one of the 2 languages. Rest of the roles and responsibilities would be exactly the same along with the compensation structure.

Hence, this concludes the definition of Job Grade along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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