The Hay Job Evaluation Methodology is a proprietary methodology. You would need permission from the owner of this tool to use it. I document it here for human resource practitioners who for various reasons wanted to know how it works (education purposes).
General Principles about Job Evaluation
The general principles of job evaluation are:
- It is the job and not the job holder that is being evaluated.
- The job is evaluated at a job standard of fully acceptable performance.
- The job is evaluated as it is now, not what it was and not what it will be or what it should be.
- The job is evaluated with no considerations of its present pay, grade, how it is rank compared with other jobs. All these factors are ignored in the job evaluation.
The Step Difference
The points scale on the Hay Guide Charts are of a 15 percent geometric progression. A job is considered to be larger than another if there is a difference of more than 15 percent of the Hay Points between the 2 jobs.
Source: “Gauge for Programmer” presented by Valentin Anoprenko
“The numerical or points scale referred to above are geometric ones, because they are based on the ‘step difference concept’, defined as the minimum difference that well-informed and experienced judges can discern between jobs when compared in job element terms. The step difference is the essential building block of the method, and thus the basis of the job evaluation scale. It is based on the fact that the ability to discern a difference, is proportionate to the size of the 2 jobs which are being compared, and the step difference must, therefore, always be the same in percentage terms. The step difference which has produced the most consistent and sensible results is 15 percent; this is common to all applications of the Guide Chart Profile Method.” Source: Hay Group.
The Hay Group Guide Chart Profile method of job evaluation was developed in the early 1950s by Edward N. Hay and Dale Purves. 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.
Why Is It Called a Job Profile?
Jobs have shapes; hence dimensions. That is why jobs have profiles.
Why Do You Need a Job Profile?
It asks questions about your responsibilities, the skill and knowledge required to perform the job, the effort involved in performing key activities and the working environment, which will be used for job evaluation purposes.
The Underlying Principle
The following chart is self-explanatory.
This methodology is known as a points factor system.
Initially, the Hay Method is based on the idea that jobs can be assessed in terms of:
- The knowledge required to do the job.
- The analytical ability needed to solve common problems
- The responsibilities assigned.
- The working conditions associated with the job.
Later, it changed to 3 universal factors. It starts from the premise that all jobs exist to serve a purpose that is to create value in the organization. Hence, jobs are evaluated by analyzing what is the value that is created (accountability), how it is created (problem solving) and what the job requirements are that the job holder has to meet in order to deliver the value (know-how)
The additional factors are (a) physical strain or effort (b) working environment
Source: Hay Group
Sub-Factors Derived from the Three Factors
The Hay method evaluates a job by dividing it into three broad areas that are common to all jobs. It subdivides each area into several elements.
- Know-how : The knowledge, skills and aptitudes required to do the job.
- Depth and range of know-how (Job specific knowledge or technical and
specialized knowledge) : The depth and breadth of specialized knowledge required to perform the job.
- Planning and organizing (Managerial breath or managerial know-how) : The planning, organization, supervision, and coordination required by the job, and the extent to which it has to integrate different activities, resources, or parts of the organiz
- Communicating and influencing (Human relations skills) : How much and at what level the job is required to work with and through others.
- Problem Solving: The kind of thinking needed to solve the problems the job routinely faces.
- Thinking environment : Assesses the scope within the job to identify and
address the problems it typically faces. The thinking environment depends on the absence or presence of policy, procedure, supervision, or other guidance.
- Thinking challenge (Analytical challenge): Assesses the inherent nature of the problems which typically need to be dealt with, ranging from simple, repetitive problems to complex and novel situations.
- Accountability: The responsibilities assigned to the job are:
- Freedom to act: How much authority the job has to take decisions without
referral to others.
- Magnitude: The size of the area of the organization on which the job can have an impact.
- Type of impact (Job Impact):The strength of that impact.
How the Methodology Works
Source: “Gauge for Programmer” presented by Valentin Anoprenko
Hay Job Evaluation Guide Charts
Here is a glimpse of how the 3 Guide Charts look like. Only part of the table is shown.
Hay Know How Guide Chart
Hay Problem Solving Guide Chart
Hay Accountability Guide Chart
Hay Group Confessions
“Job evaluation is about the relative size of jobs. It establishes the relative importance of jobs to the organization and the relative difficulty of jobs to the job holders. It is a process which involves the exercise of judgement in identifying and assessing differences in value between jobs. It is not directly concerned with people, their performance, or pay – only with the size of jobs in relation to other jobs.
Jobs cannot be measured scientifically. Evaluations will always be judgements, just as most significant organizational decisions must be judgements. However, judgements can be disciplined within a systematic framework which facilitates consistency and fairness through treating all jobs on a common yardstick. It would not be equitable to measure one job according to one set of criteria and another by a totally different set. Job evaluation permits different jobs to be assessed in a consistent way by applying a common framework for judgement.” Source: Hay Group
“We have been viewing compensation as a matter of affixing a number or a range to a set of duties,” she said. “That is a nineteenth-century idea. We need to recognize that the unit of value in an organization is the person, not the job description.”
“Billions of dollars of wasted talent are sitting in corporations right now, because most of us haven’t figured out how to value the contributions of our employees.”
“When we create fixed job descriptions and assign fixed salary ranges to them, we say “This is the shape the employee must come in.” There is no variation. We aren’t that creative. If the job pays ten bucks an hour, we’re going to pay you ten bucks an hour whether you do the job the way our least-experienced, least-capable person does the job or the way our own CEO would do the job. We couldn’t care less what you bring to the job. The unit of value is the job description.” Source: We Pay for the Job Description Not the Person in It, written by Liz Ryan, published in Forbes 2 May 2014.