What is Job Classification? (With Classification Example)
By Indeed Editorial Team
Published 17 April 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Arranging jobs into a categorised system can help employers determine the level of positions in the organisation. This scheme can benefit large companies, universities and other structured institutions that follow a specific career path. Learning about how this process works can help you understand the value of your role and how you might progress to a senior position. In this article, we discuss what a job classification is, explain its structure, provide helpful examples of a hierarchy pyramid scheme and list the benefits of this standardised system.
What is job classification?
Learning the answer to the question, 'What is job classification?' can help you better understand the employee structures in companies and may help you plan your career path. Most companies use this scheme to maintain a fair and consistent salary when approaching the different ranks in the team. This can provide senior employees with greater responsibilities and higher salaries when planning their future for leadership roles. Employers usually evaluate the position at the end of each year, as this can help them form accurate data when ranking the different jobs.
Companies might list the characteristics of each position based on the job family, function and general responsibilities of the role. Creating this hierarchy structure may offer an insight into the wages and how the daily duties compare to senior positions in the organisation. For example, someone working as a junior financial analyst might earn less than someone who has been in the senior chief executive role for longer than a year.
Job classification structure
Forming a structure based on job characteristics can help employers define the ranks of each position and how they can categorise the system. Employers can rate the job based on their assessed qualities, such as accountability, problem-solving skills and how they function. Companies usually call this strategy the point-factor method. Below are some examples of the classification structure you might see during your career:
A group of jobs that share the same characteristics make up a categorised family. This evaluation can focus on skills, knowledge, similar competencies, training abilities and area of expertise. Employers might promote career development in each job family, as they can understand the requirements of each training module. Gaining more information from this specific category can help companies form further research on the competitor market, which may help them plan fair salaries for your role. During your career, you may work with individuals in your job family the most often.
The sub-family might focus on a specific occupational profession in the group. For example, when approaching the finance department, you might discover accounting and operational positions. These can help narrow down the characteristics of each job and how they might affect equal compensation. People in the HR department can define the rank of each role based on smaller family groups.
Listing the actions and primary responsibilities of a position can help employers form a solid job description. Most functions share similar qualities that determine the goals on that career path and how people might perform their duties. A good example of this can be managerial roles and the ability to lead teams and set new objectives throughout the day. Companies might change the overall job function depending on the employees in an organisation.
Some employers might determine the specific tasks performed by an employee. For example, two accountants can share similar duties, but one may have a junior status. This can affect how much they work and what they aim to achieve in one shift. Most jobs have multiple roles in each category, as companies usually prefer a variety of people in the department.
Job pyramid example
Most companies follow the job pyramid structure when trying to determine the ranks of each position, with senior roles at the top of the list. This might help them create suitable job descriptions when attracting a specific target audience. Larger organisations may not follow this ranking scheme, as they typically hold more open positions. Here is a list of eight examples that follow the hierarchy pyramid:
National average salary: $148,654 per year
Primary duties: Someone working as a chief executive officer might control every aspect of the organisation. They can manage employment, budgets, objectives, business strategies and other important responsibilities that require attention. This highest ranking manager can choose to be responsible for the overall success and functionality of the company.
National average salary: $145,270 per year
Primary duties: A chief operating officer usually monitors the organisation's policies and governmental rules. They can report to the chief executive and discuss plans on how the company might operate effectively. Creating strategies may become part of their list of responsibilities throughout the day.
National average salary: $113,011 per year
Primary duties: The vice president of an organisation might plan and direct operational strategies in each department. This can ensure career development when introducing effective methods to the team. Someone in this position might report to the higher executives when coordinating new plans.
National average salary: $105,588 per year
Primary duties: A manager working in operations might supervise and train new employees, as this can help to develop their current skills. They can also manage quality and assurance, company improvements, maintain business income, control work performance and plan new operational strategies. Managers usually assist HR with the recruiting process.
National average salary: $104,260 per year
Primary duties: A sales manager can motivate teams to accomplish objectives in the company. They might also build a sales plan, analyse data from the sales, train new staff members and pitch ideas to the team. Sales managers may evaluate customer satisfaction and find new techniques to strengthen relationships with customers.
National average salary: $75,891 per year
Primary duties: A team coordinator can monitor a group of people and guide them through the company's objectives and goals. They can train new team members, evaluate work performance, create effective strategies and conduct routine meetings. Someone in this position may discuss techniques with the manager and how they might steer the team in the right direction.
National average salary: $65,259 per year
Primary duties: A sales representative might sell products to customers and implement new strategies to meet their needs. They can monitor client accounts and form professional relationships based on the success of sales. Someone in this role can discuss techniques with the team leader about what they might ideally achieve.
National average salary: $49,027 per year
Primary duties: Someone working as a junior sales assistant might welcome customers into the store and ask them if they need help. They can also manage complaints, product issues and other customer requests. Processing transactions through the till might be another one of their daily duties.
Benefits of job classification
Below is a list of job classification benefits:
Companies with a clear classification system may promote equal opportunities for people to advance in their careers. This can encourage a talented target audience to apply for the advertised positions. Employers might use this ranking system to create beneficial job descriptions when seeking new employees and promote diversity in the workplace. Executing a solid payment program can strengthen trust between team members and beginner roles. As an employee, this means you might get a chance to work with more successful team members, which can improve the performance of your team or department.
Ranking the different jobs can help employers organise the payroll costs. This might benefit people working in human resources, as they can set the correct budgets and provide financial advice on how to maintain this effective strategy over the next few years. Showing employees the job grading system can reassure them of their equal wages.
Companies that use the job classification method might discuss individual development plans with employees. This can encourage career growth within the organisation and help increase productivity in the workplace. People may feel more appreciated once they see the overall vision and how they can achieve goals in the specific role.
Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
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