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Leo, could you kindly inform on when to perform a job classification in a workplace, as an HR Manager? Secondly, could you please elaborate  on the job classification process?

Question:   Leo, could you kindly inform on when to perform a job classification in a workplace, as an HR Manager? Secondly, could you please elaborate  on the job classification process?

Job classification is a system for objectively and accurately defining and evaluating the duties, responsibilities, tasks, and authority level of a job. The job classification, done correctly, is a thorough description of the job responsibilities of a position without regard to the knowledge, skills, experience, and education of the individuals currently performing the job.
Job classification is most frequently, formally performed in large companies, civil service and government employment, nonprofit agencies, and colleges and universities. The approach used in these organizations is formal and structured with pay or salary grades attached to the results of the job classification.
Informal forms of job classification are used even in smaller and mid-sized companies and agencies to generate a sense of fairness across equivalent employee jobs. This form of job classification can be as simple as grouping similar positions in a broadband.
The Hay System of Job Classification
One popular, commercial job classification system is the Hay Classification system. The Hay job classification system assigns points to evaluate job components to determine the relative value of a particular job to other jobs.
The Hay method measures three components in all jobs: the knowledge required, problem solving required, and level of accountability. The Hay method compares the relative value of comparable jobs to maintain parity across an organization.
For purposes of larger organizations with many departments and locations, union represented jobs, and organizations with hierarchical, rigid pay or salary grades, and needed internal equity, a system such as Hay, is appropriate.
Working with Hay job classification, an evaluator uses a job evaluation instrument or questionnaire, that is filled out by the department requesting the job or evaluation. Trained to appropriately assign points, the evaluator assigns points to determine where to place a job in the job classification system. The placement of the job determines the pay or salary grade within the organization's compensation system.
Find out more about why an organization might want to consider using a job classification system to evaluate jobs.
Why might an organization adopt a system of job evaluations for job classification? Job evaluations can help you create an equitable compensation system through appropriate job classification.
Reasons for Job Evaluation
Job evaluations are performed for these reasons.
•   To determine what positions and job responsibilities are similar for purposes of
•   pay,
•   promotions,
•   lateral moves,
•   transfers,
•   assignments and assigned work, and other internal parity issues.

•   To determine appropriate pay or salary grades and decide other compensation issues.

•   To help with the development of job descriptions, job specifications, performance standards, competencies, and the performance appraisal system.

•   To assist with employee career paths, career planning or career pathing and succession planning.

•   To assist the employee recruiting process by having in place job responsibilities that assist in the development of job postings, the assessment of applicant qualifications, suitable compensation and salary negotiation, and other factors related to recruiting employees.
When Does Job Evaluation and Classification Occur?
Especially in larger organizations, job evaluation and classification is a moving target. New technology, taking on additional responsibilities, downsizing and layoffs, new programs, new procedures, increased authority, and team leader or supervisory responsibilities can cause the job classification of an employee to change. In fact, the role of some Human Resources staff consists primarily of job evaluation and job classification.
In job classification, a job analysis and evaluation occurs when a new position is created. The job classification is evaluated each time a significant change occurs in a job. The job classification re-evaluation is generally requested by an employee through his or her supervisor.
In a job evaluation that results in decisions about a job classification, factors such as decision making authority, the scope and range of the responsibilities performed, the level of the duties performed, and the relationship of the position to other jobs in the organization are considered and compared.
The most common request for job classification re-evaluation that I have experienced occurs when an employee has taken on new responsibilities or more work. The employee is often disappointed to learn that more work does not equate to a change in scope, range, decision making authority, or higher level responsibilities. Thus, the job evaluation results in a job classification that remains the same.



You can use job evaluations to:
•   Clarify job descriptions so that employees understand the expectations of their roles and the relationship of their roles to other jobs within the organization.
•   Attract desirable job candidates.
•   Retain high-potential employees.

What is job evaluation?
Job evaluation is a systematic process that you can use to determine the relative level, importance, complexity, and value of each job in your organization. With a successful job evaluation system, you can compare each job to other jobs within your organization.
It is best to perform job evaluation after work analysis. Job evaluation, in conjunction with work analysis, helps you develop a job description that is broad, descriptive, and flexible so that you can adapt the description to your organization's changing needs.
Assess employee contribution
Job evaluation helps you establish and qualify differences in employee contribution across jobs. These differences provide a foundation for employee compensation decisions. The job evaluation process measures the elements of a job and produces an overall score. In each case, you evaluate the job, not the employee who performs the job.
Assess job content and value
Typically, job evaluation assesses both the content of a job and the value of a job for your organization.
•   Job content refers to the type of work performed and the skills and knowledge necessary to perform the work.
•   Job value refers to the job's degree of contribution in meeting your organization's goals and the degree of difficulty in filling the job.
Factors in job evaluation
Job evaluators often assess jobs based on these factors:
•   Training level or qualifications requirements
•   Knowledge and skills requirements
•   Complexity of tasks
•   Interaction with various levels of the organization
•   Problem-solving and independent judgment
•   Accountability and responsibility
•   Decision-making authority
•   Degree of supervision required
•   Cross-training requirements
•   Working conditions
•   Degree of difficulty in filling job

Steps in job evaluation
The standard steps in job evaluation include:
Introduce the concept of job evaluation.
Obtain management approval for the evaluation.
Train the job evaluation selection team.
Review and select the job evaluation method.
Gather information on all internal jobs.
Use information to fully expand job descriptions.
Use the selected job evaluation method to rank jobs hierarchically or in groups.
Link the ranked jobs with your compensation system or develop a new system.
Implement the job evaluation and compensation systems.
Periodically review your job evaluation system and the resulting compensation decisions.

Analyze job evaluation methods
Before implementing job evaluation in your organization, select the most appropriate job evaluation method. Hundreds of job evaluation systems exist. Research the job evaluation methods and resources available online.  4  job evaluation systems are most commonly used:
•   Ranking
•   Classification
•   Point evaluation
•   Factor comparison

Ranking jobs is the easiest, fastest, and least expensive approach to job evaluation. It is also most effective in smaller organizations with few job classifications. To rank positions, order jobs from highest to lowest based on their relative value to your organization.
The process of job ranking typically assigns more value to jobs that require managerial or technical competencies. More value is also assigned to jobs that supervise, exercise decision-making authority, or rely on independent judgment. For example, a job-ranking system might rank the job of CEO as the most valued job within the organization and the job of product assembler as the least valued.
•   Advantages Simplicity is the main advantage in using a ranking system. It is also easy to communicate the results to employees, and it is easy to understand.
•   Disadvantages Ranking jobs is subjective. Jobs are evaluated, and their value and complexity are often assessed on the basis of opinion. Also, when creating a new job, existing jobs must be reranked to accommodate the the new position.
1.Ranking Method  APPROACH
Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are arranged from highest to lowest, in order of their value or merit to the organization. Jobs also can be arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; and the job at the top of the list has the highest value and obviously the job at the bottom of the list will have the lowest value.
Jobs are usually ranked in each department and then the department rankings are combined to develop an organizational ranking. The following table is a hypothetical illustration of ranking of jobs.
Table: Array of Jobs according to the Ranking Method
Rank Monthly salaries
1. Accountant Rs 3,000
2. Accounts clerk Rs 1,800
3. Purchase assistant Rs 1,700
4. Machine-operator Rs 1,400
5. Typist Rs 900
6. Office boy Rs 600
The variation in payment of salaries depends on the variation of the nature of the job performed by the employees. The ranking method is simple to understand and practice and it is best suited for a small organization. Its simplicity, however, works to its disadvantage in big organizations because rankings are difficult to develop in a large, complex organization. Moreover, this kind of ranking is highly subjective in nature and may offend many employees. Therefore, a more scientific and fruitful way of job evaluation is called for.
The general purpose of job classification is to create and maintain pay grades for comparable work across your organization.
To conduct a job classification: First, write descriptions for a category of jobs; next, develop standards for each job category by describing the key characteristics of those jobs in the category; finally, match all jobs to the categories based on the similarity of tasks, the decision-making exercised, and the job's contribution to the organization's overall goals.
Universities, government employers and agencies, and other large organizations with limited resources typically use job classification systems. These types of organizations have many types of jobs at diverse locations and must maintain equitable and fair standards across all work settings.
•   Advantage Job classification is simple once you establish your categories. You can assign new jobs and jobs with changing responsibilities within the existing system.
•   Disadvantages Job classification is subjective, so jobs mightfall into several categories. Decisions rely on the judgment of the job evaluator. Job evaluators must evaluate jobs carefully because similar titles might describe different jobs from different work sites.
2.Classification Method  APPROACH
According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades. Separate classes may include office, clerical, managerial, personnel, etc. Following is a brief description of such a classification in an office.
(a) Class I - Executives: Further classification under this category may be Office manager, Deputy office manager, Office superintendent, Departmental supervisor, etc.
(b) Class II - Skilled workers: Under this category may come the Purchasing assistant, Cashier, Receipts clerk, etc.
(c) Class III - Semiskilled workers: Under this category may come Stenotypists, Machine-operators, Switchboard operators, etc.
(d) Class IV - Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.
The job classification method is less subjective when compared to the earlier ranking method. The system is very easy to understand and acceptable to almost all employees without hesitation. One strong point in favor of the method is that it takes into account all the factors that a job comprises. This system can be effectively used for a variety of jobs.
The weaknesses of the job classification method are:
•   Even when the requirements of different jobs differ, they may be combined into a single category, depending on the status a job carries.
•   It is difficult to write all-inclusive descriptions of a grade.
•   The method oversimplifies sharp differences between different jobs and different grades.
•   When individual job descriptions and grade descriptions do not match well, the evaluators have the tendency to classify the job using their subjective judgments.
3.Point evaluation
Point evaluation is the most widely used job evaluation method. In a point evaluation system, you express the value of a particular job in monetary terms. You first identify compensable factors that a group of jobs possess. Based on these factors, you assign points that numerically represent the description and range of the job.
Examples of compensable factors are skills required, level of decision-making authority, number of reporting staff members, and working conditions.
•   Advantage This method is often viewed as less biased than other methods because the job evaluator assigns each job's total points before the compensable factors become part of the equation.
•   Disadvantages Subjective decisions about compensable factors and the associated points assigned might be dominate. The job evaluator must be aware of biases and ensure that they are not represented in points assigned to jobs that are traditionally held by minority and female employees.
3.Point method  APPROACH
This method is widely used currently. Here, jobs are expressed in terms of key factors. Points are assigned to each factor after prioritizing each factor in the order of importance. The points are summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades. The procedure involved may be explained thus:
(a) Select key jobs. Identify the factors common to all the identified jobs such as skill, effort, responsibility, etc.
(b) Divide each major factor into a number of sub factors. Each sub factor is defined and expressed clearly in the order of importance, preferably along a scale.
The most frequent factors employed in point systems are:
I. Skill (key factor): Education and training required, Breadth/depth of experience required, Social skills required, Problem-solving skills, Degree of discretion/use of judgment, Creative thinking;
II. Responsibility/Accountability: Breadth of responsibility, Specialized responsibility, Complexity of the work, Degree of freedom to act, Number and nature of subordinate staff, Extent of accountability for equipment/plant, Extent of accountability for product/materials;
III. Effort: Mental demands of a job, Physical demands of a job, Degree of potential stress.
The educational requirements (sub factor) under the skill (key factor) may be expressed thus in the order of importance.
Degree Define
1. Able to carry out simple calculations; High School educated
2. Does all the clerical operations; computer literate; graduate
3 Handles mail, develops contacts, takes initiative and does work independently; post graduate
Assign point values to degrees after fixing a relative value for each key factor.
Point Values to Factors along a Scale
Point values for Degrees Total
Factor 1 -2- 3- 4- 5
Skill 10- 20- 30 -40 -50 = 150
Physical effort 8 -16 -24 -32- 40 =120
Mental effort 5 -10 -15 -20 -25 =75
Responsibility 7 -14 -21 -28 -35 =105
Working conditions 6- 12 -18- 24- 30= 90
Maximum total points of all factors depending on their importance to job = 540

4 Find the maximum number of points assigned to each job (after adding up the point values of all sub-factors of such a job). This would help in finding the relative worth of a job. For instance, the maximum points assigned to an officer’s job in a bank come to 540. The manager’s job, after adding up key factors + sub factors’ points, may be getting a point value of, say 650 from the job evaluation committee. This job is now priced at a higher level.
5 Once the worth of a job in terms of total points is expressed, the points are converted into money values keeping in view the hourly/daily wage rates. A wage survey, usually, is undertaken to collect wage rates of certain key jobs in the organization. Let’s explain this:
Conversion of Job Grade Points into Money Value
Point range Daily wage rate (Rs) Job grades of key bank officials
500-600 300-400 1 Officer
600-700 400-500 2 Accountant
700-800 500-600 3 Manager I Scale
800-900 600-700 4 Manager II Scale
900-1,000 700-800 5 Manager III Scale
Merits and Demerits
The point method is a superior and widely used method of evaluating jobs. It forces raters to look into all keys factors and sub-factors of a job. Point values are assigned to all factors in a systematic way, eliminating bias at every stage. It is reliable because raters using similar criteria would get more or less similar answers. “The methodology underlying the approach contributes to a minimum of rating error” . It accounts for differences in wage rates for various jobs on the strength of job factors. Jobs may change over time, but the rating scales established under the point method remain unaffected.
On the negative side, the point method is complex. Preparing a manual for various jobs, fixing values for key and sub-factors, establishing wage rates for different grades, etc., is a time consuming process. According to Decenzo and Robbins, “the key criteria must be carefully and clearly identified, degrees of factors have to be agreed upon in terms that mean the same to all rates, the weight of each criterion has to be established and point values must be assigned to degrees”. This may be too taxing, especially while evaluating managerial jobs where the nature of work (varied, complex, novel) is such that it cannot be expressed in quantifiable numbers.
4.Factor comparison
Job evaluators rank jobs that have similar responsibilities and tasks according to points assigned to compensable factors. The evaluators then analyze jobs in the external labor market to establish the market rate for such factors. Jobs across the organization are then compared to the benchmark jobs according to the market rate of each job's compensable factors to determine job salaries.
•   Advantage This method results in customized job-ranking.
•   Disadvantage Compensable factor comparison is a time-consuming and subjective process.
4.Factor Comparison Method  APPROACH
A more systematic and scientific method of job evaluation is the factor comparison method. Though it is the most complex method of all, it is consistent and appreciable. Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors. These factors include mental effort, physical effort, skill needed, supervisory responsibility, working conditions and other relevant factors (for instance, know-how, problem solving abilities, accountability, etc.). Pay will be assigned in this method by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs may be divided among the factors weighed by importance (the most important factor, for instance, mental effort, receives the highest weight). In other words, wages are assigned to the job in comparison to its ranking on each job factor.
The steps involved in factor comparison method may be briefly stated thus:
•   Select key jobs (say 15 to 20), representing wage/salary levels across the organization. The selected jobs must represent as many departments as possible.
•   Find the factors in terms of which the jobs are evaluated (such as skill, mental effort, responsibility, physical effort, working conditions, etc.).
•   Rank the selected jobs under each factor (by each and every member of the job evaluation committee) independently.
•   Assign money value to each factor and determine the wage rates for each key job.
•   The wage rate for a job is apportioned along the identified factors.
•   All other jobs are compared with the list of key jobs and wage rates are determined.
An example of how the factor comparison method works is given below:
Merits and Demerits of Factor Comparison Method
•   Analytical and objective.
•   Reliable and valid as each job is compared with all other jobs in terms of key factors.
•   Money values are assigned in a fair way based on an agreed rank order fixed by the job evaluation committee.
    *Flexible as there is no upper limitation on the rating of a factor

•   Difficult to understand, explain and operate.
•   Its use of the same criteria to assess all jobs is questionable as jobs differ across and within organizations.    
    *Time consuming and costly.

In job evaluation,  we  re-visit,  the  job analysis
technically  speaking, and  review the job description/

It  is an exercise in job comparison and defining  the
relative  worth of   jobs .

The aim of job evaluation is to provide a systematic and consistent approach to defining the relative worth of jobs within a workplace, single plant or multiple site organisation. It is a process whereby jobs are placed in a rank order according to overall demands placed upon the job holder. It therefore provides a basis for a fair and orderly grading structure.

Only the job is evaluated, not the person doing it. It is a technique of job analysis, assessment and comparison and it is concerned with the demands of the job, such as the experience and the responsibility required to carry out the job. It is not concerned with the total volume of work, the number of people required to do it, the scheduling of work, or the ability of the job holder.

The  system assesses each job by examining three main elements of job content which are common to all jobs to one extent or another:
1. Know How – the levels of knowledge, skill and experience (gained through job experience, education and training) which are required to perform the job successfully

2. Problem Solving – the complexity of thinking required to perform the job when applying Know How

3. Accountability – the impact the job has on the organisation and the constraints the job holder has on acting independently
The three main elements are broken down further into sub elements:
4. Working  conditions.

* Know how
* Depth and Range of Know How
* Planning and Organising
* Communicating and Influencing
* Problem Solving
* Thinking Environment
* Thinking Challenge
* Accountability
* Freedom to Act
* Nature of Impact
* Area of Impact

A trained evaluation panel evaluates jobs against each of the elements using detailed job descriptions. The outcome of the evaluation assigns a profile and points score which shows the total size of the job. The points score enables jobs to be placed in a rank order with other jobs IN  THE  WORKPLACE.

The  System is an evaluation method that is widely used . Training in the use of the system takes several days, followed by several months organizational experience to become proficient in its evaluation style. All jobs are evaluated not only by the interpretation of the factor descriptions but within the context of all other jobs in the organization.
 Knowledge, Problem Solving, Accountability and Working Conditions. The system works on an integration of all the factors. A job is evaluated by looking at the knowledge required to do the job (whether practical or intellectual), the kind of thinking required to solve the problems which the job commonly faces, the responsibilities (accountabilities) assigned, and the work environment in which the work is performed.
In each of the following factors there are a series of descriptions and variables with points assigned to each.
‘Know How’ is defined as the "sum total of every kind of knowledge and skill, however, acquired, needed for acceptable job performance."
There are three dimensions in know how:
Practical procedures, specialized techniques and knowledge within occupational fields, commercial functions, and professional and scientific disciplines.
Planning, organizing, coordinating, integrating, staffing, directing and or controlling the activities and resources associated with the function of the unit, position, section, etc.
Face to face skills needed for various relationships with other people.
‘Problem Solving’ is "the amount and nature of the thinking required in the job in the form of analyzing, reasoning, evaluating, creating, using judgment, forming hypotheses, drawing inferences, arriving at conclusions, etc."
There are two dimensions in problem solving:
The environment in which the thinking takes place.
The challenge of the thinking to be done; the novelty and complexity of the thinking required.
Problem Solving is always expressed as a percentage of Know How since it directly relates to how one uses the knowledge which he or she must have in the job to solve the problems which are encountered as part of that job.
‘Accountability’ is "the answerability for action and its consequences. The measured effect of the job on end results in the organization."
There are three dimensions in accountability:
"Freedom to Act" which is the extent of personal, procedural or systematic guidance and control on the job.
"Job Impact on End Results" which is the degree to which the job affects or brings about the results expected of the unit or function being considered.
"Magnitude" is the size of the function or unit measured in the most appropriate fashion.
‘Working Conditions’ assess the environment in which the job is performed.
Working Conditions are made up of four dimensions:
"Physical Effort" - jobs, which may require levels of physical activity, which may produce physical, stress or fatigue.
"Physical Environment" - jobs which may include exposure to unavoidable physical and environmental factors which increase the risk of accident, ill health or discomfort to the employee.
"Sensory Attention" - jobs which may require concentrated levels of sensory attention (i.e. seeing, hearing, smelling, tasting, touching) during the work process.
"Mental Stress" - refers to exposure to factors inherent in the work process or environment, which increase the risk of such things as tension or anxiety.
Each of these four dimensions is measured according to duration, intensity and frequency.
All of these factors are evaluated in each job evaluation and the cumulative total is a total point factor for the position. Because jobs have so many different variables it is possible that a job without a high score in Know How but with severe Working Conditions could result in the same number of points with a job that has the opposite components.
For example, an insurance clerk and a bus driver have few job responsibilities that are similar, but might be evaluated in total at the same point level.

     Intermediate Insurance Clerk   School Bus Driver
Know How      100   87
Problem Solving      19   16
Accountability       25   22
Working Conditions:         
  Physical Effort   2   9
  Physical Environment   1   7
  Sensory Attention   6   9
  Mental Stress   2   5
Total Points      155   155
Although these jobs have little in common and differ in the Hay Points for individual factors their total points are the same and therefore the jobs are considered to be of equal value.
Obviously the trained evaluator must consider the ratings awarded to a Senior Insurance Clerk and Junior Insurance Clerk to maintain the integrity of the rating within job families when evaluating the Intermediate Insurance Clerk.
While these jobs have been evaluated individually important concepts are consistency of application and the establishment of benchmark positions. All positions within an organization are evaluated in comparison to the benchmarks using a consistently applied evaluation tool.



 * It can be beneficial when the existing grading structure is in need of review

   * It can help establish or maintain the credibility and acceptability of a grading system

   * Job evaluation facilitates the accommodation of new or revised jobs into the grading structure

* It can be used by organisations as a basis for job matching and external pay comparisons

Job evaluation  helps  many other aspects  in the organization,  but  reward  management
is  the  major  areas.

The purpose of this manual is to serve as a reference guide for the Hay Job Evaluation Methodology used to evaluate AUPE positions at the University of Lethbridge. This manual is not intended to be a training manual to prepare individuals to be job evaluators or to be a definitive resource on job evaluation methodology.
As the organization continually changes, the information in this manual may become outdated or new information may be added.  Information in this manual will be updated as necessary.
For additional information, users of this guide may contact Human Resources at the University of Lethbridge at (403) 329-2274.
Job Evaluation System
Job evaluation is the analysis and evaluation of work for the purpose of determining the relative value of jobs within an organization. Job evaluation may also provide valuable information for organizational analysis and for human resource planning and management strategies such as succession planning, performance management, compensation, etc.
For a job evaluation system to be effective, care must be taken in ensuring the system is as objective as possible. It is important that each job be evaluated on the basis of current, regular and on-going work conditions and job content. It is also essential that the focus of the evaluation process be on the purpose, scope and responsibilities of work assigned to the position, and not an incumbent's personal qualities or performance.  In other words the focus is on the position and not the individual(s) in the position.
As jobs are very often affected in some way by organizational change, maintaining the job evaluation system requires that departments periodically review their organization design and structure to determine if significant changes have occurred. Any change in an organization's structure may alter the content of a job, which may result in an adjustment in the evaluation of the job.   Ideally the position description should be updated every time there is a substantial change to a position’s purpose, scope, and/or responsibilities.
Joint Committees
The Job Evaluation Committee (JEC) shall meet to jointly evaluate AUPE positions.  Membership on this committee is confined to management (Human Resources) and union (AUPE) ranks.  Ideally, the JEC will be a representation from a cross-section of job classes to every extent possible.  The JEC will evaluate all AUPE jobs in the workplace, as well as maintain the integrity of the Hay Plan. Job evaluation decisions shall be unanimous and deemed final and binding upon the Parties, subject to appeal procedures.  

Job Evaluation Procedures
The following general procedures will be used to evaluate jobs:
i.   All incumbents will complete the Job Evaluation Questionnaire (either individually or as a group if they choose).  The Incumbent, Manager and Dean/Director will sign the Questionnaire, and submit to Human Resources.  
ii.   Where further documentation is required, the JEC will determine how that information will be obtained.  This may include having members of the JEC interview the incumbent and manager.  Any additional information will be gathered in such a manner as to minimize any disruption to the workplace.  
iii.   The JEC will evaluate the position using information from the completed questionnaire and any additional interviews (if necessary).  The JEC will evaluate positions based on comparisons with other AUPE evaluated positions.  
Overview of the Hay Method
Job Evaluation methods provide a systematic approach and framework to sort positions in an equitable manner.  The Hay method works because it is a dynamic process that organizations adapt and apply in ways that meet their needs.  It is based on the notion that jobs can be measured on the basis of their relative contribution to the overall objectives of the organization.  By considering core aspects of content and context that are common to all jobs, it provides a clear, understandable and systematic basis for defining and comparing the requirements for all kinds of jobs at all levels.  
The Hay Method is based on the idea that jobs can be assessed in terms of;
•   the knowledge required to do the job;
•   the thinking needed to solve the problems commonly faced;
•   the responsibilities assigned, and;
•   the working conditions associated with the job.  

These four factors are often referred to as “compensable factors”.

The Hay approach ranks jobs by level of accountability they carry in setting and achieving organizational goals and objectives.  The focus of the job evaluation process using the Hay Method is on the nature and the requirements of the job itself, not on the skills, educational background, personal characteristics, or the current salary of the person holding the job.

Equal Pay Legislation    Hay Method Compensable Factors
Skill    •   Know-How
Effort    •   Problem Solving
Responsibility    •   Accountability
Working Conditions    •   Physical Effort, Environmental Factors, Sensory Attention, Mental Stress
The four compensable factors (Know-How, Problem Solving, Accountability, and Working Conditions) are measured using a series of charts referred to as the “Hay Guide Charts”. Each of the four compensable factors has a Guide Chart outlining the dimensions of each of the factors and their respective point levels. Each job is given a ranking in accordance with the four factors in relation to other jobs in the organization, resulting in a total point level.
Working from documentation which describes the content of the job (the Job Evaluation Questionnaire) and the environment in which it is performed, plus the definitions and qualitative measures provided (by the Hay plan), each job is given a ranking on the four factors in relation to other jobs in the organization.  
Key job functions and major responsibilities of the job are compared to the definitions of degree levels in order to determine the most appropriate level.  The corresponding points for that level are then assigned to the job and are combined for all factors to derive a total score.
Hay Guide Charts provide the standard tools used to systematically evaluate all UofL jobs.  Guide Charts were tailored by Hay to suit the University of Lethbridge organization and the jobs to be evaluated.  
Overview of the Four Compensable Factors

1. Know-How
This Guide Chart measures the total knowledge, skills and competencies required in a job to realize its accountabilities and to perform the job in an acceptable manner. It consists of three dimensions:
•   COGNITIVE:   Practical procedures and knowledge, specialized techniques, and learned skills;
•   MANAGERIAL:    The real or conceptual planning, coordinating, directing, and controlling of activities and resources associated with an organizational unit or function; and,
•   HUMAN RELATION: Active, practicing, person-to-person skills in the area of human relationships.
Cognitive Know-How
Level    Explanation
A. Basic    Work of this kind is extremely simple, short cycle in nature, and typically involves manual effort.  Familiarity with simple work routines; work indoctrination.
B. Elementary    Capable of carrying out uninvolved, standard procedures AND/OR using equipment or machines which are simple to operate.
C. Intermediate Skill And/Or Knowledge    Experienced in applying methods or procedures, which generally are well defined and straightforward, but with occasional deviations. Skill in the use of specialized equipment may be needed.
D. Extended Skill And/Or Knowledge    Accomplished in implementing practical procedures or systems, which are moderately complex AND/OR specialized skills, which require some technical knowledge (usually non-theoretical) to apply.
E. Diverse or Specialized    A sound understanding of and skill in several activities which involve a variety of practices and precedents OR a basic understanding of the theory and principles in a scientific or similar discipline.
F. Seasoned, Diverse or Specialized   Extensive knowledge and skill gained through broad or deep experiences in a field (or fields) which requires a command of EITHER involved, diverse practices and precedents OR scientific theory and principles OR both.
G. Broad or Specialized Mastery    Mastery of theories, principles, and complex techniques OR the diverse, cumulative equivalent gained through broad seasoning AND/OR special development.
Managerial Know How
This is know-how required to integrate and harmonize diversified functions involved in managerial situations (operating, supporting and administering). It is practiced directly in "line" assignments, consultatively in "staff" assignments or both ways. This factor reflects the knowledge and skill required for integrating and harmonizing activities, resources and functions involving some combination of planning, organizing, integrating, coordinating, evaluating, staffing and/or controlling. Managerial Know How is reflected on the guide charts as the values "T" (task, which is essentially “none”), "I" (minimal), "II" (diverse), "III" (broad), and “IV" (total).
Managerial Know How is a continuum like all other factors in the ranking process. Evaluators must always compare what levels apply to a job being evaluated relative to other positions in the organization. For example, Directors and Maintenance supervisors both plan but there is a significant difference in difficulty, scope and time frames. The organizational structure in which a job exists must be considered so that the job above the one being evaluated and its impact is considered. The next layer above the job being evaluated is there because the job being evaluated cannot "do it all" on its own. The level above brings added value from the standpoint of planning, organizing and coordinating activities. Layers of management cannot be ignored with respect to their impact on the positions below both in managerial know how and freedom to act.
Explanations for the levels follow.
Level    Explanation
T.   Performance of a task(s) highly specific as to objective and content, and not involving the leadership of others.
I.   Performance or direction of activities, which are similar as to content and objectives with appropriate awareness of other activities.
II.   Direction of an important unit with varied activities and objectives OR guidance of an important subfunction(s) or several important elements across several units.
III.   Direction of a major unit with noticeable functional diversity OR guidance of a function(s) which significantly affects all or most of the organization.
IV.   Management of all units and functions within the organization.
Human Relations Skills
Human Relations Skills are the active, face to face skills needed by a job holder for various relationships with other people within and outside of the organization. Human Relations Skills range from "1" (basic), to "2" (important), to "3" (critical). It must be kept in mind that "1" is not a "0". It is assumed that all jobs require a minimum of common politeness. At the opposite extreme, a job that requires the ability to motivate, convince or sell others to gain results is a "3". Human Relations skills are not synonymous with being a nice person and they are not necessarily interchangeable. Level descriptions follow.
Level    Explanation
1. Basic    This is the base level of interpersonal skill utilized by most individuals in the course of performing the job.
Maintaining courteous and effective working relationships with others to request or transmit information, ask questions or get clarification.
2. Important    This level of interpersonal skill is required in jobs in which understanding and influencing people are important requirements in the job.
Skills of persuasiveness or assertiveness as well as sensitivity to the other person's point of view are often required to influence behavior, change an opinion, or turn a situation around. The requirement for public contact does not necessarily demand this level of human relations skills, particularly if the purpose is to provide or solicit information.
In addition, positions which assign work and/or monitor and review work of other employees (generally supervising AUPE positions), usually require at least this level of skill.
3. Critical    The highest level of interpersonal skill is usually required by positions in which alternative or combined skills in understanding and motivating people are important in the highest degree.
Jobs which require negotiating skills are often found at this level, but consideration has to be given to the power bases being utilized.
For example, In negotiations between buyers and sellers of products, services, concepts, or ideas, less Human Relations skill may be required by the "buyer" who has the latitude to say "no" than by the seller who must turn the "no" to "yes". This level of skill is usually required for positions accountable for the development, motivation, assessment and reward of other employees.
   Know-How points are derived from the matching of the three dimensions described above. For example, a Cognitive scoring of “D”, combined with a Managerial scoring of “I” and Human Relation skills of “3” provides a total Know-How ranking.  Often the notation used to display the Know-How factor is written as, “DI3”.

2. Problem Solving

This Guide Chart measures the thinking required in the job by considering two dimensions:
•   The environment in which the thinking takes place; and,
•   The challenge presented by the thinking to be done.
Problem Solving is the amount and nature of the thinking required in the job for analyzing, reasoning, evaluating, creating, exercising judgement, forming hypotheses, drawing inferences, arriving at conclusions and the like. To the extent that thinking is limited or reduced by job demands or structure, covered by precedent, simplified by definition, or assisted by others, then problem solving is diminished and results are obtained by the automatic application of skills rather than by the application of the thinking processes to knowledge.
Problem Solving measures the extent by which Know-How is employed or required. "You think with what you know." Therefore Problem Solving is treated as a percentage of Know-How.
The evaluation of Problem Solving should be made without reference to the job's freedom to make decisions or take action; these are measured on the Accountability Chart.
Thinking Environment
Level    Explanation
A. Highly Structured    Thinking within very detailed and precisely defined rules and instructions AND/OR with continually present assistance.
B. Routine    Thinking within detailed standard practices and instructions AND/OR with immediately available assistance or examples.
C. Semi-Routine    Thinking within well-defined, somewhat diversified procedures.  There are many precedents covering most situations AND/OR readily available assistance.  
D. Standardized    Thinking within clear but substantially diversified procedures.  There are precedents covering many situations AND/OR access to assistance.  
E. Clearly Defined     Thinking within a well-defined frame of reference and toward specific objectives.  This is done in situations characterized by functional practices and precedents.
F. Generally Defined   Thinking within a general frame of reference toward functional objectives.  This is done in situations characterized by nebulous, intangible or unstructured aspects
G. Broadly Defined    Thinking within concepts, principles and broad guidelines towards the organization’s objectives or functional goals.  This is done in an environment that is nebulous, intangible, or unstructured.  
H. Abstract    Thinking within business philosophy AND/OR natural laws AND/OR principles governing human affairs.
Thinking Challenge
Level    Explanation
1. Repetitive    Identical situations requiring resolution by simple choice of known things.
2. Patterned    Similar situations requiring search for solutions within area of known things.
3. Varied    Differing situations requiring search for solutions within area of known things
4. Adaptive    Variable situations requiring analytical, interpretative, evaluative, and/or constructive thinking.
5. Unchartered   Novel or nonrecurring path-finding situations requiring the development of new concepts and imaginative approaches.
   Problem Solving points are derived from the matching of the two dimensions described above.  For example, a Thinking Environment scoring of “D”, combined with a Thinking Challenge scoring of “3” provides a percentage.  To find Problem Solving points, match the Know-How total score and the Problem Solving %.  This provides the total Problem Solving ranking.
3. Accountability
This Guide Chart measures the relative degree to which the job, performed competently, can affect the end results of the organization or of a unit within the organization. Accountability is related to the opportunity which a job has to bring about some results and the importance of those results to the organization. Tied closely to the amount of opportunity is the degree to which the person in the job must answer for (is accountable for) the results.
It reflects the level of decision-making and influence of the job through consideration, in the following order of importance, of:
•   FREEDOM TO ACT - the nature of the controls that limit or extend the decision-making or influence of the job;
•   JOB IMPACT ON END RESULTS  - the immediacy of the influence of the job on a unit or function of the organization; and,
•   MAGNITUDE - the magnitude of the unit or function most clearly affected by the job.
Freedom To Act
Freedom to act measures the nature of the controls that limit or extend the decision-making or influence of the job. It is measured by the existence or absence of personal or procedural control and guidance (supervision and guidance). Limitations on freedom to act are largely organizational (relating to both organizational placement and control as well as the nature of the activity in terms of end results and can differ between seemingly equivalent jobs in different departments). Freedom to act in a job is constrained to the degree that it is more circumscribed or limited by external factors or is defined by others and/or is limited by organization or functional policies. The Freedom to Act can be evaluated in a range from R to G. Quantitatively it is the most important dimension of accountability.
Level    Explanation
R   These jobs are subject to explicit, detailed instructions AND/OR constant personal or procedural supervision.
A   These jobs are subject to direct and detailed instructions AND/OR very close supervision.
B   These jobs are subject to instruction and established work routines AND/OR close supervision.
C   These jobs are subject, wholly or in part, to standardized practices and procedures, general work instructions and supervision or progress and results.
D   These jobs are subject, wholly or in part, to practices and procedures covered by precedents or well-defined policies, and supervisory review.
E   These jobs, by their nature and size, are subject to broad practices and procedures covered by functional precedents and policies, achievement of a circumscribed operational activity, and to managerial direction.
F   These jobs, by their nature or size, are broadly subject to functional policies and goals and to managerial direction of a general nature.
G   Subject to the guidance of broad organization policies, community or legislative limits, and the mandate of the organization.

Magnitude represents the size of the unit or function most clearly affected by the job. Every position in every organization has a role to play in helping to achieve the objectives of the organization; however the importance of this role is better understood in the context of a department, or a faculty.

The underlying notion in order to score the magnitude component is to recognize that Impact and Magnitude judgments must be made in tandem.  There are some organizations that use dollars (budget) as a useful quantitative measure of size; however, the University of Lethbridge scores the Magnitude component by fitting Magnitude and Impact together.  
Instead of using static dollars as a quantitative measure of size, the task is to (1) identify the magnitude of the area most clearly impacted by the job (i.e. across the University for several unrelated functions, or within one unit, etc.), and (2) measure the job’s impact at that point.
The question to be answered is:  Does the position’s magnitude impact within one unit, or does it impact across the University for one function, or perhaps across the University for several unrelated functions?  This would differentiate the Magnitude scoring.
Another check is to look at the Problem Solving scoring.  Positions where accountability tends to be greater than problem solving (i.e. owner of a business) would have a higher accountability score.  The assumption is that a position is balanced (i.e. problem solving = accountability), unless actions or activities in the position prove otherwise.    
  Results usually affect an individual or are usually non-quantifiable in terms of department budget responsibility, revenues and expenditure authority.
(Very Small)    Results are internally focused and affect a unit of the department or may be externally focused and affect a limited segment of clients outside the department.
(Very Small)    Results typically affect an entire department and may have some impact on other departments and/or are externally focused affecting a large clientele within a program or functional area.

(Medium)    Results achieved primarily affect other departments, the University as a whole and significant client groups external to University operations. Work performed may affect provincial or territorial clientele within a variety of programs or functional areas.

Impact: The degree to which the job affects or brings about the results expected of the unit or function being considered.  This is the influence of the job on a unit.

Level    Explanation
A    Ancillary
One of several/many positions, which contribute to the end results expected of the unit or functions OR informational, recording, or other facilitating services for use by others in achieving results.
C    Contributory

One of few positions which contribute significantly to the end results expected of the unit or function OR interpretive, advisory, or other important supporting services for use by others in achieving results.
S    Shared

Equal and joint control, with one other position, of the activities and resources which produce the results OR control of what are clearly most (but not all) of the variables which are significant in determining results.
P    Primary

Controlling impact - the position has effective control over the significant activities and resources which produce the results and is the sole position (at this level of Freedom to Act) which must answer for the results.
   Accountability points are derived from the matching of the three dimensions described above. For example, a Freedom to Act scoring of “D”, combined with a Magnitude scoring of “1” and an Impact scoring of “C” provides a total Accountability ranking of D1C.

Working Conditions

This Guide Chart measures the conditions under which the job is performed by considering:
•   Physical Effort, which measures the degree of physical fatigue that results from the combination of intensity, duration, and frequency of any kind of physical activity required in the job.
•   Physical Environment, which measures the physical discomfort or the risk of accident or ill health which results from the combination of intensity, duration, and frequency of exposure, in the job, to unavoidable physical and environmental factors.
•   Sensory Attention, which measures the intensity, duration, and frequency of the demand, in the job, for concentration using one or more of the five senses.
•   Mental Stress, which measures the degree of such things as tension or anxiety which result from the combination of intensity, duration, and frequency of exposure to factors, inherent in the work process or environment, which would typically cause stress to someone reasonably suited to the job.
By focusing on the important aspects of the content of each job, the end results which each is expected to achieve, and the conditions under which the work is performed, the Hay Method provides a vehicle for systematically assessing the relationships among the various positions and determining their relative value.


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Leo Lingham


human resource management, human resource planning, strategic planning in resource, management development, training, business coaching, management training, coaching, counseling, recruitment, selection, performance management.


18 years of managerial working exercise which covers business planning , strategic planning, marketing, sales management,
management service, organization development


24 years of management consulting which includes business planning, corporate planning, strategic planning, business development, product management, human resource management/ development,training,
business coaching, etc

Principal---BESTBUSICON Pty Ltd



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