Using Job Evaluation in Your Organization

Point Factor Method

Jobs need to be placed in a job hierarchy based on their worth to the organization. To do this using the Point Factor Method, each job is rated using compensable factors and sub-factors that are assigned points based on weighting.

Designing a point factor plan can be time-consuming, but once developed, the plan can provide objectivity and excellent guidance to job evaluators to ensure a fair and equitable hierarchy of jobs that is legally defensible. Numerous point plans developed by consultants and associations exist for purchase in the marketplace, and sometimes you can modify existing plans to fit your organization.

The Korn Ferry Hay Guide Chart - Profile Method is a popular point factor job evaluation plan extensively used in the private and public sectors that evaluates jobs based on three or four worksheets:

• Know How: The depth of technical/specialized knowledge and breadth of managerial knowledge to perform a job
• Problem Solving: The original, self-starting thinking required to identify, define and resolve problems
• Accountability: The measured effect on end results.
• Working Conditions: Optional chart measuring working conditions such as physical environment, hazards, manual effort, and mental concentration

The Korn Ferry Hay job evaluation approach is the most widely accepted in the world enabling tens of thousands of organizations to create effective job evaluation plans.

Legal Aspects of the Korn Ferry Hay Guide Chart - Profile Method of Job Evaluation. The Korn Ferry Hay Method can be a useful tool in meeting a global employer's legal and regulatory challenges. The Korn Ferry Hay Guide Chart - Profile Method of Job Evaluation is gender neutral and has not been found to be discriminatory or unlawful in any reported legal decision. The factors used have also been widely accepted as a basis for setting fair and equitable pay practices and are compliant with the U.S. Equal Pay Act of 1963 and Canadian provincial pay equity legislation, which refers to job-to-job comparisons based on "skill, effort, and responsibility." The method has been court-tested many times and has proven to be legally defensible since its inception. Working conditions such as physical environment, hazards, manual effort, and mental concentration can also be added to account for job-context factors. However, many of these factors, unlike know-how, problem-solving, and accountability, can be potentially discriminatory, so there needs to be a compliant process to design and utilize supplementary factors alongside the Guide Charts. The Korn Ferry Hay Method is the job evaluation method of choice for many public and private employers, mainly because of the strong belief that it will serve them best if legal challenges arise.

Point Factor Plan Design

We will now go through the steps to build a point factor methodology job evaluation. This technique involves rating each job based on compensable factors. The scores given for each factor are added to obtain a point total for a job.

Choosing Compensable Factors

Useful compensable factors should possess certain characteristics.

1. They must be present in all jobs.

2. They need to be definable and measurable.

3. The factor must vary in degree, so it has different levels. A factor found in equal amounts in all jobs would be worthless as a basis of comparison.

4. If two or more factors are chosen, they should not overlap in meaning. If they do overlap, double weight may be given to one factor.

5. Compensable factors must be demonstrably derived from the work performed. The factors must be observable in the jobs. For this reason, responsibility is a hard factor to use. Compensable factors can be thought of as the job-related contributions of employees. Documentation of the work-relatedness of factors comes from job descriptions. Such documentation provides evidence against allegations of illegal pay discrimination. It also provides answers to employees, managers, and union leaders who raise questions about differences among jobs.

6. Compensable factors need to fit the organization. Organizations design jobs to meet their goals and to fit their technology, culture, and values.

The widely accepted basic compensable factors are:

• Skill/Qualifications
• Responsibility
• Effort
• Working Conditions

These 4 basic factors are commonly used but an organization can decide to use others. Typically, a job evaluation plan has 3 to 5 basic factors. These factors may be further subdivided into 10 to 16 sub-factors that fit the organization. The following are examples:

• Skill/Qualifications

  • Experience
  • Knowledge or Education Level
  • Ability

• Responsibility

  • Mental
  • Physical
  • Visual

• Effort

  • Budgeting
  • Safety
  • Supervisory/Management
  • Independent Work
  • Difficulty of Tasks
  • Interaction

• Working conditions

  • Physical Environment
  • Psychological Climate

Each factor and sub-factor must have a carefully written definition.

Each sub-factor is assigned levels, also known as degrees. There may be 2 to 9 levels, but 4 to 6 is typical. Levels must also have a carefully written definition. (See the reference section of this course for examples.)