Cornerstones of HR Value Chain (Organization Development) – Part 1

In continuation to the last article on Talent Acquisition (Part IV), let us take the series of HR value chain forward to understand the second cornerstone i.e. Organization Development (a structured and planned organization wide effort to increase the organization's effectiveness).

There are certain key components which portrays wing to wing perspective of OD –

- Job Evaluation and Job Description
- Performance Management System
- Learning & Development - Training
- Reward & Recognition
- OD Intervention
- Leadership Development
- Career Development
- HR Policies & Practices

Let me walk you through each of these components briefly as outlined below –

1. Job Evaluation (JE) and Job Descriptions (JD) - a very critical role in OD is assigned to the significance of Job Evaluation and Job Description which forms the basis of manpower staffing.
JOB EVALUATION – a working definition - process of systematically determining a relative value of jobs in an organization. The idea here is to evaluate the job and not the person doing it. It is basically an assessment of the relative worth of varied jobs on the basis of a consistent set of jobs and personal factors such as qualifications and skills required. The objective is to determine which jobs should be more/less paid as compared to others. Fundamentally, they form the basis for salary negotiations. One of the main objectives is to establish and maintain internal equity in matters related to compensation.

While there can be many job evaluation methods that may exist but some of the widely practiced ones that are employed are briefly elucidated below –

1. Ranking Method – this is perhaps the simplest method of job evaluation where jobs are arranged from highest to lowest, in order of their value or merit to the organization. Jobs also can be arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; and the job at the top of the list has the highest value and obviously the job at the bottom of the list will have the lowest value. Jobs are usually ranked in each department and then the department rankings are combined to develop an organizational ranking. This is best suited for small organizations as rankings are difficult to develop in large and complex organizations.

2. Classification method – here a predetermined number of job groups or job classes are established and the jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades. This method is less subjective when compared to ranking method. The system is very easy to understand and acceptable to almost all employees without hesitation. It takes into account all the factors that a job comprises. This system can be effectively used for a variety of jobs.

JOB DESCRIPTION - it is a document which lists general tasks, functions and responsibilities of a particular position. Typically it includes to whom the position reports, specifications such as educational qualification, salary range, years of experience required, etc. it is essentially developed by conducting a job analysis, which includes examining the tasks and sequences of tasks necessary to perform the job. This analysis looks at the areas of knowledge and skills needed by the job.

In my next article - Cornerstones of HR Value Chain (Organization Development) – Part 2, I will share my thoughts on other 4 key components of OD. Watch out….!


  1. Good to read and understand.

  2. Very simple depiction of the most complex function in any organization; whether small, medium or large enterprises... look forward to more!