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Job evaluations are conducted to determine the grading within every organization and where each position fits in the company structure. This can be done either by classification (dividing jobs by category), or by ranking (classifying jobs in their order of importance).

Job evaluations are very important as they help optimize the recruitment process by determining the skills, education, leadership traits, responsibilities and other essential requirements for every job which, in turn, helps build a sound and comprehensive overall pay structure.

Once jobs have been evaluated, a job structure is created to determine the infrastructure or hierarchy of jobs within an organization. It encompasses job levels, job titling conventions, grades, career paths, spans of control, the criteria for career movement, and equitable compensation programs based on job value. It also provides the infrastructure for the human capital and financial practices that drive the business, including total rewards, workforce planning, career paths, learning and development, and succession planning.

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