Hello friends,

Let me initiate a discussion on Hay's Method of Job Evaluation. Let me pour in what I have learnt in the past years..

Job Evaluation
*Ranking
Jobs are compared to each other based on the overall worth of the job to the organization. The 'worth' of a job is usually based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal), and working conditions.

*Classification
Jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. The classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used. Because of differences in duties, skills and knowledge, and other aspects of trades and labor jobs, job grading standards are developed mainly along occupational lines.

The standards do not attempt to describe every work assignment of each position in the occupation covered. The standards identify and describe those key characteristics of occupations which are significant for distinguishing different levels of work. They define these key characteristics in such a way as to provide a basis for assigning the appropriate grade level to all positions in the occupation to which the standards apply.

*Factor Comparison
A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are:
1. Skill
2. Responsibilities
3. Effort
4. Working Conditions

Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics.

1. equitable pay (not overpaid or underpaid)
2. range of the factors (for each factor, some jobs would be at the low end of the factor while others would be at the high end of the factor).
The jobs are then priced and the total pay for each job is divided into pay for each factor.

*Point Method
A set of compensable factors are identified as determining the worth of jobs. Typically the compensable factors include the major categories of:
1.Skill
2.Responsibilities
3.Effort
4.Working Conditions

These factors can then be further defined.
1.Skill
a. Experience
b.Education
c.Ability
2.Responsibilities
a.Fiscal
b.Supervisory
3.Effort
a.Mental
b.Physical
4.Working Conditions
a.Location
b.Hazards
c.Extremes in Environment

The point method is an extension of the factor comparison method. Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job. Jobs are then grouped by total point scores and assigned to age/salary grades so that similarly rated jobs would be placed in the same wage/salary grade.

Hope this helps to all. All the best...

Regards

Sumit