Session 1:

Job evaluation is a systematic method of determining a job’s relative worth within an organization. There are
five commonly used approaches

1. Ranking Method
This method ranks jobs in order based on each job’s perceived value in relation to the others, says Neelman.

 Does not consider market compensation rates.

 May work well for smaller companies. In a larger organization, it is more complex to use, but
sometimes it can still work if jobs are grouped by job families—professional level, etc.

2. Classification/Grading Method
With this approach, generic job characteristics are grouped to reflect levels of skill/responsibility at a number
of predetermined grade classifications, says Neelman.
This is another straightforward method that is not too time-consuming.

 Individual jobs are compared to groups of job characteristics, then matched to specific grade
classification.
 Can be a challenge because one size does not fit all, so jobs may be forcefit into a grade.
 The system is subject to grade inflation as jobs get pushed to the next higher level.

3. Point–Factor Method
This approach identifies job factors that add value and worth to a position. The job factors are separated into
groups (i.e., skill, responsibility, effort) and assigned a numerical or weighted point value. The points for
individual factors are added up to get a point value for the whole job.

 May not reflect market values of jobs.

 Generates a hierarchy but does not have an external component.

4. Factor Comparison Method

With this method, job factors are identified under primary groups (i.e., skill, effort, responsibilities, working
conditions) typically up to five groups. Each factor is assigned a dollar value (as opposed to point value).

 This is a complex system used only by a few organizations.

 It is hard to communicate to employees.
 There is an inherent degree of subjectivity.

5. Competitive Market Analysis Method

This approach looks at external data, says Neelman. Job evaluation forms the basis for market pricing. You
utilize job descriptions to compare jobs to like positions within the external marketplace. Pay data are
collected from published sources and the value of the position within the competitive market is determined.

 Considers the organization’s compensation philosophy. (Where do we want to position ourselves vis-
à-vis the market?)
 Examines internal value against market data.
 Requires an overlay to see how it fits with the internal hierarchy.

Goals of Market Pricing

Market pricing is used by many organizations, says Schmidt, to determine:

 The competitive value of individual positions

 The company’s overall positioning in the marketplace
 The company’s pay positioning against its compensation philosophy
 Whether pay programs achieve basic objectives of compensation
 Internal equity

Collecting Pay Data—Executives

Gathering pay data for executive positions is not the same as for lower positions. For publicly traded (for–
profit) companies, you gather executive pay data from proxy statements of peer companies. The statements
typically contain:

 Pay data on all compensation components (long-term component, stock options, etc.)
 A narrative that provides additional information on pay philosophy (compare to your company’s
positioning)
 The emphasis on various components of the compensation package and, sometimes, information on
variable pay plan designs.

For not–for–profit executive pay analysis, use Form 990 data, says Schmidt. You won’t get as extensive
information as from a proxy statement, so utilize published surveys as an additional source.

In all cases of executive pay, it’s important to note organization size, industry, and geography, Schmidt says.

Session 2:

http://www.yourarticlelibrary.com/hrm/jobs/top-4-methods-of-job-evaluation-explained-with-diagram/35338
There are four basic methods of job evaluation currently in use which are grouped into two categories:
1. Non-quantitative Methods:
(a) Ranking or Job Comparison

(b) Grading or Job Classification

2. Quantitative Methods:
(a) Point Rating

(b) Factor Comparison

The basic difference between these two methods lies in the sense that, under non-quantitative methods, a
job is compared as a whole with other jobs in the organisation, whereas in case of quantitative methods, the
key factors of a job are selected and, then, measured. The four methods of job evaluation are now discussed
one by one.

Ranking Method:
The ranking method is the simplest form of job evaluation. In this method, each job as a whole is compared
with other and this comparison of jobs goes on until all the jobs have been evaluated and ranked. All jobs are
ranked in the order of their importance from the simplest to the hardest or from the highest to the lowest.

The importance of order of job is judged in terms of duties, responsibilities and demands on the job holder.
The jobs are ranked according to “the whole job” rather than a number of compensable factors. The ranking
of jobs in a University, based on Ranking Method, may be like this:

Table 14.2: Ranking of University Jobs:

Ranking Order Pay Scale

 Professor/Registrar :

Reader/Dy. Registrar Rs. 16,40(M50-20,900-500-22,400

Lecturer/Asst. Registrar Rs. 12,000-420-18,300

Rs. 8,000-275-13,500

The application of the Ranking Method involves the following procedure:

1. Analyse and describe jobs, bringing out those aspects which are to be used for purpose of job comparison.

2. Identify bench-mark jobs (10 to 20 jobs, which include all major departments and functions). The jobs may
be the most and least important jobs, a job midway between the two extremes, and others at the higher or
lower intermediate points.

3. Rank all jobs in the organisation around the bench-mark jobs until all jobs are placed in their rank order of
importance.

4. Finally, divide all the ranked jobs into appropriate groups or classifications by considering the common
features of jobs such as similar duties, skills or training requirements. All the jobs within a particular group or
classification receive the same wage or range of rates.

Ranking method is appropriate for small-size organisations where jobs are simple and few. It is also suitable
for evaluating managerial jobs wherein job contents cannot be measured in quantitative terms. Ranking
method being simple one can be used in the initial stages of job evaluation in an organisation.

Merits:
Ranking method has the following merits:
1. It is the simplest method.

2. It is quite economical to put it into effect.

3. It is less time consuming and involves little paper work.

Demerits:
The method suffers from the following demerits:
1. The main demerit of the ranking method is that there are no definite standards of judgment and also there
is no way of measuring the differences between jobs.

2. It suffers from its sheer unmanageability when there are a large number of jobs.

Grading Method:
Grading method is also known as ‘classification method’. This method of job evaluation was made popular by
the U.S. Civil Service Commission. Under this method, job grades or classes are established by an authorised
body or committee appointed for this purpose. A job grade is defined as a group of different jobs of similar
difficulty or requiring similar skills to perform them. Job grades are determined on the basis of information
derived from job analysis.

The grades or classes are created by identifying some common denominator such as skills, knowledge and
responsibilities. The example of job grades may include, depending on the type of jobs the organisation
offers, skilled, unskilled, account clerk, clerk-cum-typist, steno typist, office superintendent, laboratory
assistant and so on.

Once the grades are established, each job is then placed into its appropriate grade or class depending on how
well its characteristics fit in a grade. In this way, a series of job grades is created. Then, different wage/salary
rate is fixed for each grade.

Merits:
The main merits of grading method of job evaluation are:
1. This method is easy to understand and simple to operate.

2. It is economical and, therefore, suitable for small organisations.

3. The grouping of jobs into classifications makes pay determination problems easy to administer.

4. This method is useful for Government jobs.

Demerits:
The demerits of this method include:
1. The method suffers from personal bias of the committee members.

2. It cannot deal with complex jobs which will not fit neatly into one grade.

3. This method is rarely used in an industry.

Points Rating:
This is the most widely used method of job evaluation. Under this method, jobs are broke down based on
various identifiable factors such as skill, effort, training, knowledge, hazards, responsibility, etc. Thereafter,
points are allocated to each of these factors.

Weights are given to factors depending on their importance to perform the job. Points so allocated to various
factors of a job are then summed. Then, the jobs with similar total of points are placed in similar pay grades.
The sum of points gives an index of the relative significance of the jobs that are rated.

The procedure involved in determining job points is as follows:

Determine the jobs to be evaluated. Jobs should cover all the major occupational and levels of responsibility
to be covered by the method.

Decide on the factors to be used in analysing and evaluating the jobs. The number of factors needs to be
restricted because too many factors result in an over-complex scheme with overlap and duplication between
factors.

Define the factors clearly in written. This is necessary to ensure that different job raters interpret a particular
factor in the same sense.

Determine degrees of each factor and assign point value to each degree.

Point values are assigned to different degrees on the basis of arithmetic progression.

Finally, money values are assigned to points. For this purpose, points are added to give the total value of a
job. Its value is then translated into money terms with a predetermined formula.
Merits:
The method has the following merits:
1. It is the most comprehensive and accurate method of job evaluation.

2. Prejudice and human judgment are minimised, i.e. the system cannot be easily manipulated.

3. Being the systematic method, workers of the organisation favour this method.

4. The scales developed in this method can be used for long time.

5. Jobs can be easily placed in distinct categories.

Demerits:
The drawbacks of the method are:
1. It is both time-consuming and expensive method.

2. It is difficult to understand for an average worker.

3. A lot of clerical work is involved in recording rating scales.

4. It is not suitable for managerial jobs wherein the work content is not measurable in quantitative terms.

Factor Comparison Method:

This method is a combination of both ranking and point methods in the sense that it rates jobs by comparing
them and makes analysis by breaking jobs into compensable factors. This system is usually used to evaluate
white collar, professional and managerial positions.

The mechanism for evaluating jobs under this method involves the following steps:
1. First of all, the key or benchmark jobs are selected as standards. The key jobs selected should have
standards contents, well accepted pay rates in the community, and should consist of a representative cross-
section of all jobs that are being evaluated-from the lowest to the highest paid job, from the most important
to the least important—and cover the full range of requirements of each factor, as agreed upon by a
Committee representing workers and management.

2. The factors common to all jobs are identified, selected and defined precisely. The common factors to all
jobs are usually five, viz., mental requirements, physical requirements, skill requirements, working conditions
and responsibility.

3. Once the key jobs are identified and also the common factors are chosen, the key jobs are, then, ranked in
terms of the selected common factors.

4. The next step is to determine a fair and equitable base rate (usually expressed on an hourly basis) and, then,
allocate this base rate among the five common factors as mentioned earlier. Following is a specimen of base
rate and its allocation scheme:

5. The
final step in factor comparison method is to compare and evaluate the remaining jobs in the organisation. To
illustrate, a ‘toolmaker’ job is to be evaluated. After comparison, it is found that its skill is similar to electrician
(5), mental requirements to welder (10) Physical requirements to again electrician (12), working conditions to
mechanist (24) and responsibility also to mechanist (3). Thus, the wage rate for the job of toolmaker will be
Rs. 54 (Rs.5 + Rs. 10 + Rs. 12 + Rs.24 + Rs.3).
Merits:
This method enjoys the following merits:
1. It is more objective method of job evaluation.

2. The method is flexible as there is no upper limit on the rating of a factor.

3. It is fairly easy method to explain to employees.

4. The use of limited number of factors (usually five) ensures less chances of overlapping and over-weighting
of factors.

5. It facilitates determining the relative worth of different jobs.

Demerits:
The method, however, suffers from the following drawbacks:
1. It is expensive and time-consuming method.

2. Using the same five factors for evaluating jobs may not always be appropriate because jobs differ across
and within organisations.

3. It is difficult to understand and operate.

Now, all the four methods are summarised as follows:

 Session 3:

Job Evaluation Methods

Definition: The Job Evaluation is the process of assessing the relative worth of the jobs in an organization.
The jobs are evaluated on the basis of its content and the complexity involved in its operations and thus,
positioned according to its importance.

The purpose of the job evaluation is to have a satisfactory wage differential.

Job Evaluation Methods

There are non-analytical and analytical job evaluation methods that are employed by the organizations to
realize the worth of a set of jobs.

Non-analytical Job Evaluation Methods

1. Ranking Method: This is the simplest and an inexpensive job evaluation method, wherein the jobs are ranked
from he highest to the lowest on the basis of their importance in the organization. In this method, the overall
job is compared with the other set of jobs and then is given a rank on the basis of its content and complexity in
performing it.

Here the job is not broken into the factors, an overall analysis of the job is done. The main advantage of the
ranking method is, it is very easy to understand and is least expensive. But however it is not free from the
limitations, it is subjective in nature due to which employees may feel offended, and also, it may not be
fruitful in the case of big organizations.

2. Job Grading Method: Also known as Job-Classification Method. Under this method the job grades or classes
are predetermined and then each job is assigned to these and is evaluated accordingly.

For Example Class, I, comprise of the managerial level people under which sub-classification is done on the
basis of the job roles such as office manager, department managers, departmental supervisor, etc.
 The advantage of this method is that it is less subjective as compared to the raking method and is acceptable
to the employees. And also, the entire job is compared against the other jobs and is not broken into factors.
The major limitation of this method is that the jobs may differ with respect to their content and the
complexity and by placing all under one category the results may be overestimated or underestimated.

Analytical Job Evaluation Methods

1. Factor-Comparison Method: Under this method, the job is evaluated, and the ranks are given on the basis of
a series of factors Viz. Mental effort, physical effort, skills required supervisory responsibilities, working
conditions, and other relevant factors. These factors are assumed to be constant for each set of jobs. Thus,
each job is compared against each other on this basis and is ranked accordingly.The advantage of this method
is that it is consistent and less subjective, thus appreciable by all. But however it is the most complex and an
expensive method.
2. Point-Ranking Method: Under this method, each job’s key factor is identified and then the subfactors are
determined. These sub-factors are then assigned the points by its importance.

For example, the key factor to perform a job is skills, and then it can be further classified into sub-factors such
as training required, communication skills, social skills, persuasion skills, etc.

The point ranking method is less subjective and is an error free as the rater sees the job from all the
perspectives. But however it is a complex method and is time-consuming since the points and wage scale has
to be decided for each factor and the sub factors.

The important thing to note is, the job evaluation is considered only with the analysis of a job and not
with the job holders.

Session 4:
 https://peoplecentre.wordpress.com/2016/10/02/hay-job-evaluation-methodology-the-short-
profile/

Hay Job Evaluation Methodology: The Short Profile

OCTOBER 2, 2016

Purpose of Short Profile

In the Hay job evaluation methodology, the short profile is used as quality assurance (quality control) checks.
It is also called the Profile Check. It helps job evaluators review as to whether they have develop the right
“configuration”, “relative contribution”, or profile for the job being evaluated.

Job “Shape” or Short Profile shows the relationship between Problem Solving points and Accountability
points. The short profile is used to check the accountability and decision making evaluation.

The profile itself is not an indicator of the level of the job. There are high level jobs in scientific research that
have a minus 3 profile while there are low level management jobs have a plus 3 profile.

What is a Job Profile?

Jobs have shape as well as size. The profile of a job refers to the shape of the job. It is important in 3 ways:

 It is an independent check on the judgements made about job size.

 It describes the nature of the contribution expected from a job.
 It helps to establish a ‘best fit’ between people and jobs.
Job Shape VS Job Size
The evaluation score of a position gives an indication of its size, relative to other jobs. It answers the question,
“How big is this job?”
However, the relationship between the scores for the Problem Solving / Thinking and the Accountability /
Decision Making factors is indicative of the shape of the job and answers the questions, “What sort of job is
this?” “Is it characterized by thinking (Problem Solving) or action (Accountability), or is the balance about
equal?”
Source: Executive Group Position Evaluation Plan, Treasury Board of Canada Secretariat

4 Factors in Hay JE Methodology

In the methodology, the 3 Know-How, Problem Solving and Accountability are all linked together. Working
Conditions is more “contextual” in nature. The full points would look something like this:

Know-How

Problem Solving

Accountability

Total Points (Contents)

Working Conditions (Context)

Full Points (Combined)

Just as a recap, here are the descriptions of the 4 factors.

The knowledge, skill, however acquired, needed for acceptable job

Know How performance.

Problem Solving The thinking required in the job.

The relative degree to which the job when performed competently,

Accountability can affect the results of the organization, or a unit within the organization.

Working Conditions The context in which the job is performed.

How Does the Short Profile Work?

“Short profile” assesses the relationship between Accountability (AC) and Problem Solving (PS); with
considerations given to Know-How.

PS and AC also have a relationship that provides information about the general nature of jobs that when
examined either validates the evaluation or challenges the results.

Jobs with significantly more Accountability points relative to Problem Solving are usually very end results-
focused, action or line jobs. When Problem Solving is greater than Accountability, jobs are typically more
research-oriented, staff or administrative-oriented.

Jobs with essentially the same AC and PS points tend to have an administrative/action orientation.

Source: Hay Measurement, Hay Group

The profile is determined by identifying the step difference between PA and AC. The step difference is
determined by locating the PS points on the step value guide and counting up or down until you have located
the AC points. The number of steps taken in this procedur establishes the step difference. The direction (up +,
down – ) defines the nature of the difference. You can see the job profiles of the job examples in the 2
illustrations below.
Source: Quality Assurance Checks:Short Profiles, HayGroup

Source: Time Rahul, R&D & Compliance, Karma Management Consultants

Source:Role of Job Evaluation in Salary Administration:Case Study of a Large Company in Hong Kong, written
by Tsui Lap Fung, The university of Hong Kong

Up, Down and Level Profiles

 An action or results oriented job (PS<ACC) is primarily oriented toward generating end results.
Problem Solving takes a secondary position in this position. Therefore, the points given to Accountability
/ Decision Making will be higher than those for Problem Solving / Thinking. This relationship is known as
an Up, or “A,” Profile.
 A balanced or level job (PC=ACC) is one in which the Accountability / Decision Making and
Problem Solving / Thinking points are the same. The position will be staff-oriented and have
responsibility for managerial or supervisory functions. This is known as a Level, or “0,” Profile.
 A thinking or research oriented job (PS>ACC) exists to apply Know-How in the analysis,
investigation and identification of situations. The Problem Solving / Thinking points will be greater than
those for Accountability / Decision Making. This is known as a Down, or “P,” Profile.
If we turn the earlier “Relationships between Factors AC to PS” diagram 90 degree anti-clockwise, we will
obtain the following chart.

Source: Quality Assurance Checks:Short Profiles, HayGroup

Here is the explanation of the above chart. While there are no hard-and-fast rules, particular types of jobs do
tend to have predictable profiles:

A4 Examples of this profile are unusual but can occur where the Accountability
for results is high but the Problem Solving or Know-How content of the job is
relatively low.

A2 A3 These profiles are found in line management jobs which have a clear and
well defined responsibility for achieving results, such as regional director for
operations.
A1 Accountability / Decision Making points exceed Problem Solving / Thinking
points by one step. Jobs with A1 profiles are often hybrid jobs with significant
people management responsibilities (such as human resources managers), line
Up management positions, or jobs which receive a significant degree of direction
Profiles from functional units, such as project managers or regional directors of
administrative services.
L Problem Solving / Thinking points equal Accountability / Decision Making
points. Jobs with these profiles will tend to involve providing support services in
Level staff functions or supervisory positions such as financial analysts or heads of
Profiles functional specialties.

P2 P1 Problem Solving / Thinking points exceed Accountability / Decision Making

points by two steps or one step, respectively. Applied research or policy
development jobs will tend to have these profiles.

P4 P3 Problem Solving / Thinking points exceed Accountability / Decision Making

Down points by four or three steps, respectively. Jobs with these profiles will tend to be
Profiles concerned with basic or pure research, with little orientation to, or regard for,
development aspects. P4 Jobs will rarely be found outside a university.
Up, Down and Level profiling allows the validity of evaluations to be checked against typical job profiles.
Discrepancies, if found, may indicate an incorrect evaluation. However, they might also indicate an
inappropriately structured job. Therefore, it is important to avoid letting profiles drive the evaluation process.

Source: Executive Group Position Evaluation Plan, Treasury Board of Canada Secretariat

Method of Calculation
Here is the method for checking the accountability / decision making evaluation.

Step 1:Determine the step difference between PS and AC, using the Hay step-values table

 Find the Problem Solving (PS) points on Step Value table.

 Count up or down until you reach the Accountability (AC) points.
The following is the step value table. The difference between each value is 1 stop. 1 stop equals 15%

STEPS

3200

2800

2432

2112
1840

1600

1400

1216

1056

920

800

700

608

528

460

400

350

304

264

230

200

175

152

132

115

100

87

76

66

57

50

43

38

33

29
 25

22

19

16

14

12

10

Step 2: If AC > PS, then A profile. If PS> AC, then P profile. If PS=AC then Level profile. The short profile
number is determined by the amount of step difference.

 If you count up two levels, the job is said to be +2 or A2 or “up 2.” If you count down one level,
the job is said to be -1 or P1 or “down 1.” If the points are equal, the job is said to be = or level.
Step 3: The percentage profile can be read off an intersection of problem solving % and step difference.

Characteristic Hay Profiles (Percentage of KH-PS-AC) Table

Here is how the characteristic Hay Profile table looks like:

Source: Job Evaluation Manual, Financial Management Board Secretariat, Northwest Territories.

The following is the short profile table without the scores. A4, A3,A2, A1 corresponds to 4UP, 3 UP, 2 UP, 1UP
respectively. P1, P2, P3, P4 corresponds to 1 DOWN,2 DOWN, 3 DOWN, 4 DOWN.

TO FIND PROFILE: IN COLUMN BELOW THAT CORRESPONDS TO STEP DIFFERENCE BETWEEN AC

& PS POINTS, READ PROFILE OPPOSITE % PS

%PS ACTION PREDOMINATES AC-PS PROBLEM SOLVING PREDOMINATES

A4 A3 A2 A1 LEVEL P1 P2 P3 P4

87%

76%

66%

57%

50%

43%

38%
 33%

29%

25%

22%

19%

16%

14%

12%

10%

A4 A3 A2 A1 LEVEL

8
7 2 2 4 3 2 4 3 2 3 3 3 3 3 3 3
% 9 6 5 2 7 1 3 9 8 5 0 5 6 2 2

7
6 3 2 4 3 2 4 3 2 3 3 2 3 4 3 3
% 2 5 3 4 6 0 6 8 6 8 9 3 0 0 0

6
6 3 2 4 3 2 3 4 2 3 4 2 3 4 2 2
% 6 3 1 8 4 8 0 6 4 2 7 1 4 8 8

5
7 3 2 3 4 2 3 4 2 3 4 2 2 4 2 2
% 9 2 9 1 3 6 3 5 2 5 6 9 6 7 7

5
0 4 2 3 4 2 3 4 2 3 4 2 2 5 2 2
% 2 1 7 4 2 4 6 3 1 8 4 8 0 5 5

4
3 4 2 3 4 2 3 4 2 2 5 2 2 5 2 2
% 5 0 5 7 1 2 9 2 9 2 2 6 4 3 3

3
8 4 1 3 5 1 3 5 2 2 5 2 2 5 2 2
% 9 9 2 1 9 0 3 0 7 5 1 4 6 2 2

3
3 5 1 3 5 1 2 5 1 2 5 1 2 6 2 2
% 3 7 0 5 8 7 6 9 5 9 9 2 0 0 0

If we look closer at part of the short profile table (now with the scores) , this is how the Action Predominates
and Level looks like
If we look closer at part of the same table (now with the scores), here is how the Problem Solving
Predominates looks like.

P1 P2 P3

87% 38 33 29 40 34 26 41 36

76% 42 31 27 43 32 25 44 34

66% 45 29 26 46 31 23 47 32

57% 48 28 24 49 29 22 51 30

50% 52 26 22 53 27 20 55 27

43% 55 24 21 56 25 19 58 25

38% 59 22 19 60 23 17 62 23

33% 62 20 18 63 21 16 65 21

Example
Source: Job Evaluation Manual July 2001, Financial Management Board Secretariat, Northwest Territories.

Let us use the above example to demonstrate how we derive the short profile.
The score for problem solving is 29.

The problem solving percentage is 25%

The score for accountability is 33.

From the step value table, we found that AC is 1 step up from PS.

So the job is a +1 or A1 or up1

Next look at the intersection of column A1 and the PS percentage 25%, we find the 3 possible answers for the
profile 65, 16, 19.

Normally, the middle number would be selected.