Job Evaluation

Methods
HRM

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In this session.
Well look at the four major methods used in job

evaluation and the advantages/disadvantages of

each
Job Ranking Method
Job Classification Method

Point Method
Factor Comparison Method

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What is job evaluation?

Job evaluation can be defined as a systematic

procedure designed to aid in establishing pay
differentials among jobs1

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Job Evaluation Methods

Comparison Method

Analysis Method
Entire Job

Job Against Scale

Job Against Job

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Job Factors

Classification

Point Method

Ranking

Factor
Comparison

Ranking Method
Ranking

Ranking simply orders the job descriptions

from smallest to largest based on the
evaluators perception of relative value or
contribution to the organizations success.
Alternate Comparison (Hi Lo)
Paired comparison: [n * (n-1)] / 2

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Ranking Method
Advantages
Simple

Alternation method ranks

highest then lowest, then

next highest, then next
lowest
Paired comparisons
method picks highest out of
each pair

Fast
Most commonly used

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Disadvantages
Comparisons can be
problematic depending on
number and complexity of
jobs
May appear arbitrary to
employees
Can be legally challenged
Unreliable

Classification

Job descriptions are slotted into a

series of classes that cover the range
of jobs. Each class has a definition.
These definitions are the standards
against which the jobs are compared

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Classification Method
Advantages
Uses job
families/groups instead
of individual jobs
May produce same
results as Point Method,
but is less costly

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Disadvantages
Not useful when jobs
are very different from
each other
May be confusing to
employees about why
jobs are included in a
class

Factor Comparison
Jobs are compared against other jobs on

the basis of how much of some desired

factor they possess.
Each jobs factors are ranked against
each other jobs factors.
The market pay rate for each job is then
allocated among the factors based upon
a market pay rate scale.

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Factor Comparison Method

Advantages
Customized to the
organization
Relatively easy to use
once its set up
Results in ranking of jobs
and a specific dollar value
for each job, based on
allocating part of the jobs
total wage to each factor

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Disadvantages
Using dollar values may
bias evaluators by
assigning more money to
a factor than a job is worth
Hard to set up
Not easily explained to
employees
Every time wage rates
change, the schedule
becomes obsolete

Point Method

These systems have three common

characteristics:
Compensable elements
Factor degrees are numerically scaled

Weights reflecting the relative importance of each

factor

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contd
Compensable elements are those characteristics

in the job (not the person) that the organization

values, that help it pursue its strategy and
achieve its objectives.3

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Point Method

Advantages
Highly stable over time
Perceived as valid by
users and employees
Likely to be reliable
among committee that
assesses the jobs
Provides good data to
prepare a response to an
appeal
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Disadvantages
Time, money, and effort
required to set up
Relies heavily on key
(benchmark) jobs, so if
key jobs and correct pay
rates dont exist, the point
method may not be valid

What is Hay?
Officially known as the Hay Guide Chart-Profile
Method of Job Evaluation , this system utilizes
three factors to arrive at a jobs evaluation. The
jobs content is the sole basis for the job
evaluation.

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The three factors are:

Know-How
Problem Solving
Accountability

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contd
The Hay guide charts have been in
existence since 1951 and have been
used in over 5,000 different
organizations worldwide.
Interestingly, the Equal Pay Act of
1963 uses skill, effort, responsibility,
and working conditions as the
factors upon which equal work
should be determined.4
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contd
How are jobs evaluated using the Hay

System?
1.Job description questionnaires are completed

and signed by the jobholder, the supervisor, and

other managerial staff who have responsibility
for the position.
2.The job description questionnaire is given to
each member of the job evaluation committee
for his/her initial evaluation.

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How are jobs evaluated using

the Hay System?
3.The committee meets with the jobholder

and supervisor to explore questions and

clarify content.
4.The committee members then compare
their individual evaluations and resolve
differences that might exist.

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Administrative, Professional &

Technical Job Evaluation System
What role does Hay play in determining

salaries?

Once a job is evaluated and the salary for the

jobholder is set, Hay has little to do with
affecting the ongoing salary of the jobholder
unless the jobs evaluation is changed.

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Administrative, Professional &

Technical Job Evaluation System

How are jobs evaluated using the Hay

System?
The committee meets with the jobholder and
supervisor to explore questions and clarify
content.
4. The committee members then compare their
individual evaluations and resolve
differences that might exist.
3.

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Administrative, Professional & Technical

Job Evaluation Committee
Name

Department

Category

Mike Dougherty

Human Resources

Administrative

Irene Ferguson

Dean of Students

Administrative

Susan
Higgerson
Doug Richards

Kent Library

Professional

Public Safety

Administrative

Jim Settle

Residence Life

Administrative

Anna Tripp

Telecommunication
s

Professional

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Alissa
Vandeven Human Resources

Professional

Hay System Factors

KNOW-HOW

The sum total of every kind of skill, however

acquired, needed for acceptable job performance.

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Hay System Factors

KNOW-HOW

This sum total which comprises the overall

fund of knowledge has three dimensions
the requirements for:
Practical procedures, specialized techniques, and

learned disciplines.
Active, practicing skills in the area of human
relationships.

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Hay System Factors

KNOW-HOW
Know-how of integrating and harmonizing the

diversified functions involved in managerial

situations (operating, supporting, and
administrative). This know-how may be exercised
consultatively as well as executively and involves in
some combination the areas of organizing,
planning, executing, controlling, and evaluating.

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Hay System Factors

PROBLEM SOLVING

The original self starting thinking required

by the job for analyzing, evaluating,
creating, reasoning, arriving at and making
conclusions. To the extent that thinking is
circumscribed by standards, covered by
precedents, or referred to others, problem
solving is diminished and the emphasis
correspondingly is on know-how.
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Hay System Factors

PROBLEM SOLVING

Problem solving has two dimensions:

The environment in which the thinking takes place.
The challenge presented by the thinking to be

done.

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Hay System Factors

ACCOUNTABILITY

The answerability for an action and for the

consequences thereof. It is the measured
effect of the job on end results. It has three
dimensions in the following order of
importance:
Freedom to Act the degree of personal or procedural

control and guidance the jobholder has.

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Hay System Factors

ACCOUNTABILITY
Job Impact on End Results ranges from direct to

indirect impact on end results by auxiliary,

contributory, shared, or primary effects.
Magnitude indicated by the general dynamic dollar
size or accountability area(s) most clearly affected by
the job.

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Administrative, Professional &

Technical Job Evaluation System
What steps are taken to assure that the job

evaluation process is fairly applied?

Hay periodically retrains the members of

the job evaluation committee. A consultant
comes to campus, spending a day with the
committee discussing the appropriate use
of the guide charts and the process of
evaluating jobs.
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Administrative, Professional &

Technical Job Evaluation System
What steps are taken to assure that the job

evaluation process is fairly applied?

Southeasts job evaluation results have

twice been through the process Hay calls
correlation. This process tests to see if
the committee has applied the Hay method
in a consistent manner. The correlation
process occurs periodically.
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Administrative, Professional &

Technical Job Evaluation System
What steps are taken to assure that the job

evaluation process is fairly applied?

After the initial installation of Hay, the

Institutional Research department at the
University did a comparative study of how
male versus female positions fared in the
process. The conclusion that then-director
Dr. Steven Chatman arrived at was that there
was no sex bias in the system as it was
applied at Southeast.
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Administrative, Professional &

Technical Job Evaluation System
What is the distinction between

administrative, professional, and

technical positions?
These categories of jobs are established
under federal regulations for reporting
workforce profiles to the Equal Employment
Opportunity Commission and the Department
of Education. The category labels serve no
other
University
purpose.
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Administrative, Professional &

Technical Job Evaluation System
What is the distinction between

administrative, professional, and

technical positions?
There are approximately 58
administrative staff, 235 professional
staff, and 47 technical staff employed
by the University.
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Administrative, Professional &

Technical Job Evaluation System
What role does Hay play in determining

salaries?

The University has adopted a policy for

determining salary comparisons for
administrative and professional positions.
This policy can be found in the Business
Policy and Procedure Manual of the University
in the Personnel section numbered 03-17.
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Administrative, Professional &

Technical Job Evaluation System
What role does Hay play in determining

salaries?

The role of the Hay job points is to provide the

relative comparisons about which the salary
policy line can be constructed. In essence,
the Hay points represent our link to the salary
information developed through survey
responses.
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Administrative, Professional &

Technical Job Evaluation System
What role does Hay play in determining

salaries?

By using linear regression, a pay policy line is

constructed which determines salary range
midpoints. Our pay ranges are 50% deep.
The decision that a pay range will be 50%
deep is purely an administrative decision that
has nothing to do with the Hay system.
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Administrative, Professional &

Technical Job Evaluation System
What role does Hay play in determining

salaries?

Once a job is evaluated and the salary for the

jobholder is set, Hay has little to do with
affecting the ongoing salary of the jobholder
unless the jobs evaluation is changed.

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Southeast Missouri State

University
Important information about Job Evaluation and

Salary Administration
University Policy and Operating Procedures
Position Classification/Reclassification (03-14)
Salary Administration (03-16)
New Hire Salary Analysis
Regression models
Internal comparisons
Survey data

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Factor Degrees and Point

Systems

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What is a Degree Level?

It is a scale that reflects differing quantity

or quality of the factor

It is used to differentiate jobs on the
factor
It is a definition that is clear and
unambiguous
It contains explicit language that spells out
the behaviors, skills, or performance
expectations for that factor at different
levels of the factor
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How Do You Develop Degrees?

from Otis and Leukarts (1948) Rules
Degrees should be selected so that each job falls at
only one level. Note: you can include some
degrees that do not apply to the current jobs if you
feel there is too much of a jump between levels.
Another reason to create "empty" levels is if you
think new jobs will be created that will require that
level in the factor. The number of degrees selected
should be no more than are needed to differentiate
adequately and fairly between all the jobs being
rated.
2. Each degree should be clearly defined in terms the
workers can understand.
3. Avoid the use of ambiguous terms, e.g., strong
skills, excellent.
4. Definitions of degrees should be written in objective
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terms.
1.

How Do You Assign Point Values to

the Entire System?
1.

2.
3.

4.

5.

The maximum number of points assigned is a fairly

arbitrary judgment (500-3000 is common)
The number must be large enough to allow sufficient
differentiation among the jobs to be evaluated.
If there is a very wide spread between the current
wages of the highest paid job and the lowest paid job,
the maximum number of points will need to be higher
If you choose more than one pay system, the number
of points or the actual factors themselves do not have
to be the same in each one.
SUGGESTION FOR YOUR PROJECT: Have no
fewer than 1000 points and no more than 2000.

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How Do You Assign Point Values to

the Degree Levels?
First, determine the number of points for each

main factor (e.g., 2000 total points for the system

would result in 200 points for a factor weighted at
10%). Then use
The straight-line method, which simply takes the

maximum points for a given factor and divides it by

the number of degrees. Note: this method assumes
that the degrees should be viewed as equidistant
from each other

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Position:
Grade:

Engineering Manager
7

MAXIMUM
FACTOR
POINTS
250
250
500
500
250
250
125
125
125
125

FACTOR
Communication & Interpersonal Skills
Education & Training
Problem Solving & Decision Making
Responsibility & Accountability
Specialized Knowledge & Application
Supervision & Leadership
Internal Impact
External Impact
Planning & Organizing
Innovation

2500

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JE Points
250
250
400
500
200
250
125
75
125
90
2265

DEGREE
LEVEL

FACTOR
WEIGHTS
4
5
4
4
4
4
3
1
4
2

10%
10%
20%
20%
10%
10%
5%
5%
5%
5%
100%

How Do You Assign Point Values to

the Degree Levels?
Or the accelerating method, where differences in

degrees are seen as greater as you move up in that

factor, and so the point differences reflect that jump,
e.g., 27, 80, 160, 267, 400
Or the decelerating method, where differences in
degrees are seen as smaller as you move up in that
factor, and so the point differences reflect it, e.g.,
133, 240, 320, 373, 400
Rememberthe highest level of a factor is always
assigned the full number of points allocated to that
factor, and the lowest level of a factor has to have
some points assigned to it, i.e., 0 points is not
permitted!
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