6. Job descriptions help to develop equitable and competitive compensation programs according to the skills, experience and abilities needed for the positions.
The job description describes the level of skills, responsibilities, accountability, experience and education. All of these factors determine the level of the position in relation to other positions and, therefore, the level of compensation. For example, in a point-factor job evaluation system, each job is evaluated based on compensable factors to determine the relative worth of one job to another and the appropriate pay level. Compensable factors usually encompass four categories, including skills (experience, education/training, ability), responsibility (supervisory, fiscal), efforts (mental, physical) and working conditions (location, hazards, physical demand, extremes in environment). In a word, job descriptions are the basis of job evaluation and pay structure.