Job Evaluation Methods

HRM
BY, kevimedo
In this session….
We’ll 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
What is job evaluation?


Job evaluation can be defined as “a systematic procedure
designed to aid in establishing pay differentials among
jobs…”1
Job Evaluation Methods
Comparison Method Analysis Method
Entire Job Job Factors

Job Against Scale Classification Point Method

Factor
Job Against Job Ranking Comparison
Ranking Method
Ranking

Ranking simply orders the job descriptions from

smallest to largest based on the evaluator’s
perception of relative value or contribution to the
organization’s success.

Alternate Comparison (Hi – Lo)

Paired comparison: [n * (n-1)] / 2
 Ranking Method
Advantages Disadvantages
• Simple • Comparisons can be
• “Alternation” method ranks problematic depending on
“highest” then “lowest,” then next number and complexity of jobs
“highest,” then next “lowest”
• May appear arbitrary to
• “Paired comparisons” method picks
highest out of each pair employees
• Fast • Can be legally challenged
• Most commonly used • 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
 Classification Method
Advantages Disadvantages
• Uses job families/groups • Not useful when jobs are very
instead of individual jobs different from each other
• May produce same results as • May be confusing to
Point Method, but is less employees about why jobs are
costly 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 job’s factors are ranked against each other
job’s factors.
The market pay rate for each job is then allocated
among the factors based upon a market pay rate
scale.
 Factor Comparison Method
Advantages Disadvantages
• Customized to the organization • Using dollar values may bias
• Relatively easy to use once it’s evaluators by assigning more
set up money to a factor than a job is
• Results in ranking of jobs and a worth
specific dollar value for each • Hard to set up
job, based on allocating part of • Not easily explained to
the job’s total wage to each employees
factor • 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
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
 Point Method
Advantages Disadvantages
• Highly stable over time • Time, money, and effort
• Perceived as valid by users and required to set up
employees • Relies heavily on key
• Likely to be reliable among (benchmark) jobs, so if key jobs
committee that assesses the jobs and correct pay rates don’t
• Provides good data to prepare a exist, the point method may not
response to an appeal 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
job’s evaluation. The job’s content is the sole basis for the
job evaluation.
The three factors are:

Know-How
Problem Solving
Accountability
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
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.
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.
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 job’s evaluation is changed.
Administrative, Professional &
Technical Job Evaluation System

 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.
 Administrative, Professional & Technical Job
Evaluation Committee

Name Department Category

Mike Dougherty Human Resources Administrative
Irene Ferguson Dean of Students Administrative
Susan Kent Library Professional
Higgerson
Doug Richards Public Safety Administrative
Jim Settle Residence Life Administrative
Anna Tripp Telecommunication Professional
s
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.
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.
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.
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.
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.
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.
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.
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.
Administrative, Professional &
Technical Job Evaluation System

What steps are taken to assure that the job

evaluation process is fairly applied?
Southeast’s 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.
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.
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.
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.
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.
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.
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.
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 job’s evaluation is changed.
Factor Degrees and Point
Systems
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
 How Do You Develop Degrees?
from Otis and Leukart’s (1948) “Rules”

1. 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 terms.
5. In writing degree definitions, use examples as much as possible.
How Do You Assign Point Values to the
Entire System?
1. The maximum number of points assigned is a fairly arbitrary
judgment (500-3000 is common)
2. The number must be large enough to allow sufficient
differentiation among the jobs to be evaluated. 
3. 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
4. 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.
5. SUGGESTION FOR YOUR PROJECT: Have no fewer than
1000 points and no more than 2000.
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
Position: Engineering Manager
Grade: 7

MAXIMUM
FACTOR DEGREE FACTOR
POINTS FACTOR JE Points LEVEL WEIGHTS

250 Communication & Interpersonal Skills 250 4 10%

250 Education & Training 250 5 10%
500 Problem Solving & Decision Making 400 4 20%
500 Responsibility & Accountability 500 4 20%
250 Specialized Knowledge & Application 200 4 10%
250 Supervision & Leadership 250 4 10%
125 Internal Impact 125 3 5%
125 External Impact 75 1 5%
125 Planning & Organizing 125 4 5%
125 Innovation 90 2 5%

2500 2265 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
 Remember…the 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!
THANK YOU