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HRM

Job Evaluation Methods

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In this session….We’ll look at the four major methods used

in job evaluation and the advantages/disadvantages of eachJob Ranking MethodJob Classification MethodPoint MethodFactor 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

Job Against Job

Classification Point Method

RankingFactor Comparison


Ranking MethodRanking

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 MethodAdvantages

• 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

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


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


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 MethodAdvantages

• 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


Point Method

These systems have three common characteristics:Compensable elementsFactor degrees are numerically scaledWeights reflecting the relative importance of

each factor


contdCompensable 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 MethodAdvantages

• 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


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-HowProblem SolvingAccountability


contdThe 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


contdHow 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.



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

NameName DepartmentDepartment CategoryCategoryMike DoughertyMike Dougherty Human ResourcesHuman Resources AdministrativeAdministrative

Irene FergusonIrene Ferguson Dean of StudentsDean of Students AdministrativeAdministrative

Susan Susan HiggersonHiggerson

Kent LibraryKent Library ProfessionalProfessional

Doug RichardsDoug Richards Public SafetyPublic Safety AdministrativeAdministrative

Jim SettleJim Settle Residence LifeResidence Life AdministrativeAdministrative

Anna TrippAnna Tripp TelecommunicationTelecommunicationss

ProfessionalProfessional

Alissa VandevenAlissa Vandeven Human ResourcesHuman Resources ProfessionalProfessionalJanuary 2001January 2001


Hay System FactorsKNOW-HOW

The sum total of every kind of skill, however acquired, needed for acceptable job performance.


Hay System FactorsKNOW-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-HOWKnow-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. WWW.PPTMART.COM

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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.


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.



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.WWW.PPTMART.COM

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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.WWW.PPTMART.COM

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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.WWW.PPTMART.COM

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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.WWW.PPTMART.COM

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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.WWW.PPTMART.COM

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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.




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.




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.




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.


Southeast Missouri State University

Important information about Job Evaluation and Salary AdministrationUniversity Policy and Operating Procedures

Position Classification/Reclassification (03-14)Salary Administration (03-16)

New Hire Salary AnalysisRegression modelsInternal comparisonsSurvey data


Factor Degrees and Point Systems


What is a Degree Level?It is a scale that reflects differing

quantity or quality of the factorIt is used to differentiate jobs on

the factorIt is a definition that is clear and

unambiguousIt 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 ManagerGrade: 7

MAXIMUM FACTOR POINTS FACTOR JE Points

DEGREE LEVEL

FACTOR 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!


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