Market pricing and job evaluation
This factsheet was last updated in March 2015.
What are market pricing and job evaluation?
Market pricing is a system of collecting data on the pay rates for similar jobs in other organisations to establish their market rate and track movements in those rates. The aim is to set the organisation’s own wage rates at the appropriate level to recruit and retain the staff it needs. Although the concept of a market rate for a job is common, there is no such thing as an accurate single rate of pay for a job or role, and rates may vary even for the same occupation and in the same location. A central decision relates to how the organisation will interpret the data, and for this it needs to consider where it wants to position salary and total remuneration levels in relation to the market.
Job evaluation is ‘a method of determining on a systematic basis the relative importance of a number of different jobs’. It can be a useful because job titles can be misleading, either unclear or unspecific, and in large organisations it is impossible for HR staff to know each job in detail.
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- What are market pricing and job evaluation?
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