1. Job Evaluation Methods
HRM

2. 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

3. What is job evaluation?
Job evaluation can be defined as “a systematic procedure designed to aid in establishing pay differentials among jobs…”1

4. Job Evaluation Methods
Comparison Method Analysis Method
Entire Job Job Factors
Job Against Scale
Job Against Job
Classification
Point Method
Ranking
Factor
Comparison

5. 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

6. Ranking Method Advantages Simple Fast Most commonly used Disadvantages
“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
Disadvantages
Comparisons can be problematic depending on number and complexity of jobs
May appear arbitrary to employees
Can be legally challenged
Unreliable

7. 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

8. Classification Method
Advantages
Uses job families/groups instead of individual jobs
May produce same results as Point Method, but is less costly
Disadvantages
Not useful when jobs are very different from each other
May be confusing to employees about why jobs are included in a class
Uses minimum amount of factors from benchmark jobs
Match rest of jobs to these factors based on fit
Once all jobs are fitted into categories they are ranked by difficulty.
Method assumes equivalency within categories and equal distances between categories
EXAMPLE: “Grade IV includes all positions that involve computerized functions and that require basic knowledge and skill in written communication. Grade V includes all positions that require some independent judgment, confidentiality, interpersonal skills, but that has no direct supervisory responsibility.”

9. 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.

10. Factor Comparison Method
Advantages
Customized to the organization
Relatively easy to use once it’s set up
Results in ranking of jobs and a specific dollar value for each job, based on allocating part of the job’s total wage to each factor
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

11. Point Method Compensable elements
These systems have three common characteristics:
Compensable elements
Factor degrees are numerically scaled
Weights reflecting the relative importance of each factor

12. 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

13. 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
Disadvantages
Time, money, and effort required to set up
Relies heavily on key (benchmark) jobs, so if key jobs and correct pay rates don’t exist, the point method may not be valid

14. 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.

15. The three factors are: Know-How Problem Solving Accountability

16. 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

17. contd How are jobs evaluated using the Hay System?
Job description questionnaires are completed and signed by the jobholder, the supervisor, and other managerial staff who have responsibility for the position.
The job description questionnaire is given to each member of the job evaluation committee for his/her initial evaluation.

18. How are jobs evaluated using the Hay System?
The committee meets with the jobholder and supervisor to explore questions and clarify content.
The committee members then compare their individual evaluations and resolve differences that might exist.

19. 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.

20. 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.
The committee members then compare their individual evaluations and resolve differences that might exist.

21. Administrative, Professional & Technical Job Evaluation Committee
Name
Department
Category
Mike Dougherty
Human Resources
Administrative
Irene Ferguson
Dean of Students
Susan Higgerson
Kent Library
Professional
Doug Richards
Public Safety
Jim Settle
Residence Life
Anna Tripp
Telecommunications
Alissa Vandeven
January 2001

22. Hay System Factors KNOW-HOW
The sum total of every kind of skill, however acquired, needed for acceptable job performance.

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

34. 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

35. 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.

36. 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.

37. 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.

38. 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

39. Factor Degrees and Point Systems

40. 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

41. How Do You Develop Degrees? from Otis and Leukart’s (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.
Each degree should be clearly defined in terms the workers can understand.
Avoid the use of ambiguous terms, e.g., “strong skills,” “excellent.”
Definitions of degrees should be written in objective terms.
In writing degree definitions, use examples as much as possible.

42. How Do You Assign Point Values to the Entire System?
The maximum number of points assigned is a fairly arbitrary judgment ( 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 points and no more than 2000.

43. 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

45. 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!