These two approaches are both job leveling frameworks that can be used independently or can also work together in tandem.
Job evaluation uses a codified approach to assign points to a role based on its relative worth in an organization which in turn can be aligned to a salary structure. Examples include Hay Grades or Aon’s JobLink methodology.
Job classification, on the other hand, is a less systematic approach where leveling requires evaluation of the career level of a given role based on a variety of factors, usually without the use of points. Examples of Job classification include the Radford surveys and the Towers Watson career map.
It is worth noting that the same variables are considered in each approach e.g. skills, experience, job complexity. The key difference is the assignment of points to each variable under job evaluation. Often the two can be used in tandem but certain industries and geographies have tended to gravitate towards one or the other. For example, it would be unusual to see job evaluation being used by a tech company in the US and equally unusual to see job classification deployed in the Middle East.
Job evaluation has one attribute that may increase it’s popularity in light of pay equity conversations – its defensible. Job classification can be an involved and time consuming process, but there is ultimately limited evidence of the work that has gone into it. Job evaluation, on the other hand, leaves a trail of attributes and points to demonstrate that an objective process has been followed.
While job evaluation may appear a better option to guard against legal challenges neither approach is a solution to pay equity issues in itself. The drivers of inequity – starting pay, merit increase, and promotional increases all impact pay. As we see governments try to address issues of pay inequity, it remains to be seen if those measures will have a bearing on job leveling methods.