Job Evaluation: Foundations And Applications.
Job Evaluation:Foundations and applications.
The Korn Ferry Hay Group Guide Chart-Profile Method of JobEvaluationSM is the most widely accepted method worldwide, inuse by over half of the world’s largest employers and thousandsof organizations in every sector of the global economy.The Guide Chart method is well known for its use in establishingthe value of work in organizations. Korn Ferry Hay Group’sjob evaluation method also serves as the basis for many otherimportant human capital applications, such as clarifyingorganization structures, defining job interdependencies andaccountabilities; identifying capability requirements neededfor talent development, and setting competitive pay practices.Korn Ferry Hay Group’s job evaluationmethod serves as the basis for many otherimportant human capital applications.2What’s inside.03 Introduction.04 Korn Ferry Hay Group jobevaluation: foundations.05 Korn Ferry Hay Group jobevaluation: factors.08 The Korn Ferry Hay GroupGuide Charts.09 Organizational designand analysis.11 Talent development andsuccession planning.15Global leveling.16Pay structure design.17Streamlined approaches.18Job evaluation process.19Conclusion.19References.
Job Evaluation: Foundations and applications. IntroductionIn this challenging business environment,organizations realize that lax control of humanresource programs increase organizational risk,which are reflected in higher costs, inadequatetalent pipelines, mis-aligned reward programs,and reduced employee engagement. Organizationsare asking for effective and efficient programs thatmeet multiple needs and reduce costs. Korn FerryHay Group’s job evaluation methodology can helporganizations achieve these goals.Korn Ferry Hay Group’s approach is designed to maximize anorganization’s return on its human resources investment. Whilehistorically linked primarily to reward management, we evolved aset of methods that clarify organization structure design, facilitatemapping of job accountabilities to business objectives, and linkcharacteristic job evaluation patterns to behavioral competencies.All of these approaches are supported with rigorous methodologies,technology tools, and streamlined processes, which when appliedhave become the best practice standard used by the world’s mostadmired organizations.Organizations areasking for effectiveand efficientprograms that meetmultiple needs andreduce costs. KornFerry Hay Group’sjob evaluationmethodology canhelp organizationsachieve these goals.This paper provides an overview of the Korn Ferry Hay Group GuideChart-Profile Method of Job Evaluation, related applications, andstreamlined approaches that are based on the core methodology.3
Korn Ferry Hay Groupjob evaluation: foundations.Korn Ferry Hay Group pioneered the‘factor comparison’ job evaluationmethod and in the early 1950sconsolidated the method into theKorn Ferry Hay Group Guide Charts(Bellak, 1984). The Korn Ferry HayGroup Guide Charts are proprietaryinstruments that yield consistentand legally defensible evaluationsof the content of jobs. Korn FerryHay Group’s job evaluation approachis the world’s most widely utilized,accepted, and tested over time as afair and unbiased way to determinejob worth.Organizations use the Korn Ferry Hay Groupmethodology to evaluate jobs against a set ofcommon factors that measure inputs required(knowledge, skills, and capabilities), throughputs(processing of inputs to achieve results), andoutputs (end result expectations). We define these4three factors as ‘know-how,’ ‘problem-solving’ and‘accountability.’ During the evaluation process, ajob’s content is analyzed relative to each factor andassigned a numerical value. These factor values arethen totaled to determine the overall job ‘size.’ Thevarious job size relationships, as well as the factorproportions associated with each job, can be usefulin a number of organizational and human resourceplanning applications.Most Korn Ferry Hay Group clients use the fullpower of the core Guide Chart methodology toevaluate a core set of benchmark jobs. Thesebenchmark evaluations, which reflect both thebreadth of the organization’s functions and businessunits and the various levels in the organizationalhierarchy, form the foundational framework orbackbone of the job leveling structure.Some of our clients continue to use the full GuideChart methodology to evaluate all other positions.Others, depending on their specific needs andapplications of the job evaluation process, adoptone or more of a set of streamlined approachesStreamlined approaches are built on the foundationof the full Guide Charts, and are based on thebenchmark job structure.
Job Evaluation: Foundations and applications. Korn Ferry Hay Groupjob evaluation: factors.The input-throughput-output model isreflected in the Korn Ferry Hay Groupmethod as knowhow, problem solving,and accountability. Each factorincludes two-to-three subfactors.The output factor—accountability— is coveredfirst, since every job is designed to achievepredetermined results. This factor typicallyreceives the least attention and weight in manyother evaluation methodologies. In the Korn FerryHay Group methodology, accountability relatedconcepts are woven into all three factors, with themost direct linkage in the accountability factor. Theaccountability also grows in relative weight andimportant as job size increases, unlike some modelsthat keep accountability at a fixed weight.Accountability.Every job exists to add organizational valueby delivering some set of results (or outputs).Accountability measures the type and level of valuea job can add. In this sense, it is the job’s measuredeffect on an organization’s value chain. In the KornFerry Hay Group evaluation methodology, it hasthree dimensions (in order of importance):1. F reedom to act: The degree of organizationalempowerment to take action and the guidanceprovided to focus on decision-making.2. Nature of impact: The nature of the job’s impactand influence on organizational results. See thein-depth discussion ‘So, who is accountable?’ onthe following page.3. M agnitude (area of impact): The businessmeasure(s) the job is designed to positively impact(measured on an annual basis, typically in financialterms, to achieve consistency across jobs).Know-how.To achieve the accountabilities of a job requires‘know-how’ (or inputs), which is the sum total ofevery capability or skill, however acquired, neededfor fully competent job performance. Know-how hasthree dimensions:4. Practical/technical knowledge: Depth andbreadth of technical or specialized knowledgeand skills needed to achieve desired results.5. P lanning, organizing, and integrating(managerial) knowledge: The requirement toundertake managerial functions, such as planning,organizing, staffing, directing, and controllingresources. This knowledge is applied in anintegrated way to ensure organizational resultsare achieved.6. Communicating and influencing skills: The activerequirement for interpersonal skills that areneeded for successful interaction with individualsand groups, inside and outside the organization.5
So, who is accountable?A clear understanding of impact and its relation tooverall accountability is critical when designingand evaluating jobs.Consider the case of a major hotel chain CEO whoinsisted that the annual planning around ‘rack rates’for each property would be shared between themanagers of national sales and operations. Hereasoned that if he left it only to national sales, thenthe hotel managers would blame them if they didnot achieve their goals. Likewise, if he delegated itjust to the hotel managers, then national sales couldblame the hotel managers if they failed to attractaccounts to their properties.Just when it looked like he had agreement, thefinance director asserted that she had the mostcritical information on past trends plus impact onprofitability under different scenarios. She believedshe should share in—or maybe even drive—thedecision. The CEO, however, wisely decided thatthree people responsible for making decisionswould slow the process. In addition, having thefinance director make the decision would give thenational sales reps and hotel managers an excuse tohide behind if they did not make their numbers.Clearly, the finance director had to contribute to thedecision. The national sales people and hotelmanagers could not make decisions withoutrelevant financial information. By properly definingshared accountability between the sales leadershipand hotel management, and contributoryaccountability for the finance director, the CEOactually sped up decision-making and increasedaccountability for results. The ‘impact’ elementwhen evaluating accountability can be definedalong a continuum from lower to higher as follows:Remote. Informational, recording, or incidentalservices for use by others in relation to someimportant end result. Job activity may be complex,but impact on the overall organization scopemeasure used is relatively minor. These jobs areusually involved with collection, processing, andexplanation of information or data, typicallyrequired by others to make decisions impactingorganizational results. An example may be a payrollmanager or general accounting manager’s impacton overall company budgets.6Contributory. Interpretive, advisory, or facilitatingservices for use by others in taking action. This typeof impact is appropriate where jobs are accountablefor rendering significant ‘advice and counsel’ inaddition to information and/or analysis and whendecisions are likely to be made by virtue of thatcounsel. Such impacts are commonly found in staffor support functions that significantly influencedecisions relative to the magnitude of variousresources.Shared. Participating with peers, within or outsidethe organization, in decision making. This impact isused to describe horizontal, not vertical(hierarchical), working relationships. This type ofimpact, while direct, is not totally controlling relativeto the magnitude of the result. Shared impactstypically exist between peer jobs and/or functions,and suggest a degree of ‘partnership’ in, or ‘jointaccountability’ for, the total result. Organizationsdescribed as ‘matrixed’ typically fit this definition.For example, there may be shared accountabilitybetween engineering and manufacturing functionsfor a successful product (e.g. quality, productionefficiency). Sharing is also possible with ‘partners’outside the organization (e.g., between projectmanager and external contractors). Some linefunctions are designed for shared impact betweengeography and line of business, or function andeither line of business or geography. When thisimpact is selected, it is important to clarify specificrole contributions and to identify initiators as well astie-breakers for decision making.Primary. Controlling impact on end results, whereany contributing inputs are secondary. Such impactsare commonly found in operations and managerialpositions that have ‘line accountability’ for keyend-result areas, whether large or small.For example, a supervisor may have ‘primaryaccountability’ for the production or output (valueadded) of a unit within the context of availableresources (e.g., personnel resources and controllableexpenses); whereas the head of manufacturing mayhave a primary impact on total value added in themanufacture of products or on cost of goodsmanufactured. The key here is that the job exists tohave at a specified authority level, the controllingimpact upon certain end results of a givenmagnitude, and that accountability is not intendedto be shared with others.
Job Evaluation: Foundations and applications. Problem solvingThe value of know-how is in its application toachieve results. ‘Problem solving’ (or throughputs)refers to the use of know-how to identify, delineate,and resolve problems. We ‘think with what we know,’so problem solving is viewed as the utilization ofknow-how required to achieve results, and hastwo dimensions:7. T hinking environment (freedom to think): Thejob’s context and the degree to which problemsand solutions are organizationally guided anddefined through strategy, policy, precedents,procedures, and rules.8. T hinking challenge: The nature of addressableproblems and the degree to which thinking isrequired to arrive at solutions that add value.Problem solving measures the requirementto use know-how conceptually, analytically,and productively.Although the definitions of these job criteria haveevolved over the more than 60 years they havebeen used, the underlying principles of know-how,problem solving, and accountability have beentimeless as a general foundation for valuing work.While the design of jobs and the functionality ofjobs have evolved over time, the basic constructsthat define value have remained relatively constant.Our factors have also been widely accepted as abasis for setting fair and equitable pay practices,and are compliant with the US Equal Pay Act andCanadian provincial pay equity legislation.For more on this subject, see the in depth discussion‘Legal aspects of the Korn Ferry Hay Group Methodof Job Evaluation’ below.Legal aspects of the Korn Ferry Hay Group Guide Chart-Profile Method of Job Evaluation.The Korn Ferry Hay Group method effectively meetslegal and regulatory challenges. The Korn Ferry HayGroup Guide Chart- Profile Method of Job Evaluationis gender-neutral. It has been legally tested inmultiple environments and countries and has beenfound to be a biasfree methodology in every casewhere tested.Working conditions such as physical environment,hazards, manual effort, and mental concentrationcan be added to account for job-context factorsand are required in some locales, such as Ontarioand Quebec. Care must be taken in using theseadditional compensable factors to ensure they aregender neutral.Our factors have been widely accepted as a basisfor setting fair and equitable pay practices, and arecompliant with the US Equal Pay Act and Canadianprovincial pay equity legislation, which refers tojob-to-job comparisons based on ‘skill, effort, andresponsibility.’ Our method has been court-testedtime and again, and has proven to be legallydefensible since its inception.The Korn Ferry Hay Group Method is the jobevaluation method of choice for employers in largepart because the method has been tested and willserve them best if legal challenges arise. Forexample, the New Mexico State Supreme Court hasestablished a compensation plan for all judicialbranch employees in New Mexico, and hasmandated by Judicial Rule that all such jobs mustbe evaluated in accordance with the Korn Ferry HayGroup Guide Chart-Profile Method of JobEvaluation, so as to provide each employeeequitable compensation7
The Korn Ferry Hay GroupGuide Charts.The Guide Charts are Korn Ferry HayGroup’s proprietary instruments thatenable consistent work evaluations.Each of the factors—know-how,problem solving, and accountability—has its own Guide Chart that reflectsthe sub-elements identified above(see Figure 1).Each Guide Chart scale is expandable andcustomizable to account for the nature, complexityand size of the organization to which it is applied,and the scale descriptions can be modified whenappropriate. An important distinction is thatthe Korn Ferry Hay Group methodology can becalibrated to the value systems of each client withother organizations within Korn Ferry Hay Group’scompensation databases.This enables a wide range of benchmarkingactivities, potentially improving the accuracy ofmarket pricing and increasing confidence in jobevaluation results.We generally see differences in job size in termsof ratio differences rather than absolute unitdifferences, and the numbering pattern of theGuide Charts conforms to this principle, using a15 percent step-value progression by job-evaluationfactor to represent the ‘just noticeable’ differencebetween jobs.8Figure 1Illustrative guide charts.
Job Evaluation: Foundations and applications. Organizational designand analysis.Many people presume thatorganizational structures are theresult of systematic and methodicalplanning. In our experience, theyevolve over time and are oftenshaped by personalities, politics, andcompromise into complex mosaicsof operating and support functions,business units, and internal alliances.The unintended consequences of this evolutionare often overlaps and gaps in key accountabilitiesnecessary to meet core business objectives.Important decisions flounder and businessprocesses bog down, resulting in confusion andpotential turf wars.Korn Ferry Hay Group’s job analysis and jobevaluation process provides organizations witha common framework and language to moreeffectively design jobs within the structure thatbest supports business strategy. Strategic goals andobjectives are clarified and distributed into jobspecific accountabilities to ensure that there are nogaps or redundancies.Job evaluation also enables organizations toidentify and align key interrelationships acrosscritical business processes. Organization and jobdesign must be integrated, just as automobileengine must be designed to operate in harmonywith both efficiency and effectiveness. Improperlyintegrated designs may cause an engine to fail toachieve intended objectives. The same is true fororganizations.9
Step differences.The Korn Ferry Hay Group method utilizes stepvalues that increase in constant 15 percentprogressions. Steps can be used to analyzeorganizational hierarchy. In this context, we canconsider the consequences of changes that haveoccurred as organizations moved to leaner andflatter organization structures. Figure 2 comparesthe ‘traditional’ manufacturing hierarchy with aleaner, flatter structure typically found in similarbusinesses today.The steps of difference between the positionscan be clearly measured through use of the KornFerry Hay Group job evaluation methodology. Ina traditional structure, the distance between thework of a manager and subordinate is typically twosteps, providing for a meaningful and manageablepromotion between the levels.(See below ‘Succession planning and development.’)The distance between manager and subordinatein a lean structure may be four or more steps,making job content progression between the levelsdifficult, even for a top performing incumbent.Flatter structures often require career pathingopportunities that are horizontal (across streamsof work) rather than vertical (within the function).Since the recent economic downturn, a largenumber of jobs have been eliminated without acommensurate reduction in work, which meansthe content of many jobs may have increased.Plus, employees still with the organization assumeaccountabilities of remaining jobs, often withoutany rationalization or integration of existingaccountabilities. Adding too many and/or unrelatedaccountabilities often creates distractions andconfusion that limit job effectiveness.Figure 2Step differences between traditional and delayered structures.Job content steps/gradesTraditional/hierarchical structure1VP production23BandsVP productionEPlant managerDCell leaderCTeam leaderBOperatorADirector, production45Delayered structurePlant manager67Area r
Job Evaluation: Foundations and applications. Talent development andsuccession planning.Korn Ferry Hay Group’s experienceand research reveals a strong linkbetween the nature and shape of jobs,particularly manage-ment jobs, andthe competencies required to achieveoutstanding performance.Understanding the work’s scope significantlyincreases the ability to select and develop highperforming managers and executives. Conversely,it also enables job design that increases thelikelihood that jobholders will succeed. Twoelements of the Korn Ferry Hay Group method—jobsize and shape—are particularly useful in talentdevelopment applications.Job size and shape.Job size and shape are both important componentsof the Korn Ferry Hay Group Guide Chart- ProfileMethod of Job Evaluation. Job size is determinedby the total of the three factor point values(accountability, know-how, and problem solving),and this total point value is a starting point indetermining the job’s value to the organization.Job size is a characteristic in all point factor jobevaluation approaches. Job size is affected bythe overall magnitude of the position, as well asits tactical or strategic level of work as reflectedsignificantly in the problem solving evaluation.A key differentiating feature of the Korn Ferry HayGroup method is job shape, which is based on therelative proportions of points in accountability,know-how, and problem solving (see Figure 3).Job shape reflects the extent to which a job isprimarily concerned with achieving results (oftenlate in the value chain), or is focused on researchand analysis (often early in the value chain).Sales positions and business unit managerscommonly have a high degree of accountabilityrelative to problem solving, and are accountable forselling products already developed. Conversely, earlystage research positions are commonly associatedwith having a high degree of problem solving relativeto accountability to develop new products, services,and processes. Staff positions that are in support oforganization value chain activities (e.g. accounting,human resources, and legal) are relatively balancedbetween analysis and end results (i.e. problemsolving and accountability). Lower level positionsare dominated by know-how. Each of these differentkinds of roles has a different job shape.Figure 3Job shape depends on the proportion ofknow-how, problem solving andaccountability.ACKHPSManager,staff functionACKHPSManager,business unitACPSKHLower level job,e.g. receptionist11
Job/person alignment.Korn Ferry Hay Group research (Garonzik,Nethersell and Spreier, 2006) demonstrates astrong relationship between job shape, the strategicor tactical level of work, and required behavioralcompetencies. Using this research, we havedeveloped differentiating competency models foreach of 14 characteristic leadership roles.Armed with information about job shape ofa jobholder’s past and proposed new roles,organizations match individual capabilities to thedemands of the position. This reduces risk for boththe organization and employee—high potentialcandidates are not thrown into a role for which theyare not prepared.For example, the four business value chain positionsin Figure 4 have similar job sizes, but very differentshapes. The personal characteristics associatedwith success in these roles are also very different.Not surprisingly, most people who excel in salespositions do not necessarily excel as productdevelopment managers and vice versa—althoughboth jobs add significant organizational value.Our research (and our consulting experience)reveals that the successful controller of a businessunit has s a high probability of also being successfulin a similar, but larger business controller roleas the progression is within ‘staff’ support roles.Promotion into a role with similar job shape is aneasier adjustment than moving the same jobholderinto a line management position. In moving from asmaller to larger unit, the same basic competenciesare at work: the role is simply larger, not necessarilydifferent. But the lateral move from an advisoryrole that provides functional advice and guidanceto an action-oriented, target focused role requiresdeploying very different behaviors.These same considerations are important whenre-designing an organization’s structure. Considerthe role of country manager in a multinationalcorporation. Traditionally, country managers werejudged by profit-and-loss (P&L) responsibility,and enjoyed high degrees of autonomy andaccountability. However, many highly complexbusinesses have transformed that role into onefocused on adapting products for local markets andmanaging the political and regulatory landscape—with P&L now in the global president’s hands. Thecountry manager’s role has changed, and thesechanges are reflected in job shape. When suchtransformations occur, revisit job requirements andthe jobholder’s capabilities to determine whetherthe incumbent remains a good fit.Figure 4Jobs may have similar size and different shape (top) or similar shape and different size (bottom).Manager,product developmentManager,productionManager,product marketingManager,product salesCorporate controllerGroup controllerDivision controllerPlant controller12
Job Evaluation: Foundations and applications. Succession planningand development.Earlier, we explained the concept of step differenceas an aid to judgments about job-size relativities.When combined with organization structure analysisand job design, analysis of step differences betweenjobs within a hierarchy can also be used to assessthe extent to which a job prepares one for theadditional challenges of a larger role (see Figure 5).A one-step difference between boss andsubordinate roles means that there is a job thatprovides a good feeder situation for successionplanning purposes. However, such a job maypresent a bottleneck to decision making, so thesetypes of designs are often used when the personin the senior role is in a planned transition out ofthe position. A two-step difference means thatprogression from the subordinate position to themanager’s role is possible, but may be a stretch.Progression preparation greatly dissipates if thedifference between roles is three steps or more.‘Traditional’ line structures typically incorporate twostep differences between manager and subordinate,with opportunities for internal succession. In leanerstructures, vertical progression is less possible,and career development and succession planningshould look to lateral moves and moves ‘outside thechimney’ to secure future leadership development.Figure 5Job size illuminates development opportunities.KFHGGuide Chart bordinate4Organization ed13
Job design and analysis.When jobs are designed or changed, it is alsoimportant to determine whether or not a job is,in fact, ‘doable’ (see Figure 6). We often see jobschange when they are designed around the uniquecapabilities of a star performer with high potentialwho is seeking increased challenges.For example, to expect an individual in a midsized organization to function as vice presidentof corporate development setting new strategy,negotiating deals, and driving a growth agenda—while also managing a marketing department’sday-today operations, can lead to serious problems.Although there is an apparent link betweencorporate development and marketing, theshapes of these jobs—and thus the competenciesnecessary to achieve outstanding performance—arequite different, and the complexity of this role issubstantial. Either the person will burn out,or let one or both jobs suffer. If unchanged, thesejobs may be just too overwhelming or complex forthe newly promoted incumbent.Users of the Korn Ferry Hay Group job evaluationmethodology can use it to examine the relationshipbetween an organization’s job requirements and thejob position to ensure it is doable. The role demandsin problem solving and accountability need to becommensurate with the know-how brought to therole. If the demands are too overwhelming, failureis likely. The new person may lack the credibilityor experience required, and will likely becomeoverwhelmed, frustrated, or focused only on a subsetof the job accountabilities the incumbent can master.Conversely, if the demands are minor relative to theincumbent’s capabilities, there is a good chance thatthe incumbent will grow bored, demotivated, and/orpush for accountabilities in others’ domains and notadd value commensurate to their pay level.Figure 6Doable roles. Accountabilityand problem solvingHPoor performanceBad decisionsStressDepressionDiminished initiativeTerminationsimubm joOptybilitdoa BoredomDemotivationInternal competitionCynicismDead initiativeDeparturesLL14Know-howH
Job Evaluation: Foundations and applications. Global levelingKorn Ferry Hay Group identified a pronouncedtrend among multi-national organizations todevelop centralized reward decision-making andpolicy ( Korn Ferry Hay Group, 2010). Advances intechnology, particularly web-based systems, haveenabled this trend, and allow organizations to havea clearer line of sight over their reward-relatedprograms. This in turn facilitates the alignmentof local practices to global priorities, increasingthe return on investment and avoiding damaginginconsistencies.Because of its closerelationship to bothreward and talentmanagement, mostorganizations usejob evaluation as thebasis for globallyconsistent gradesor band.Because of its close relationship to both reward and talentmanagement, most organizations use job evaluation as the basisfor globally consistent grades or bands (Borrebach and Bowers,2008). Job evaluation is immune from the influence of local currencyfluctuations, and helps ensure internal equity across the organization.In countries like the UK and Canada antidiscrimination legislation,factor-based approaches are predominant.15
Pay structure design.Debate continues over the relative merits oftraditional grades and broad bands. In the former,all positions are similar enough in work contentto administer pay around a common midpoint ortarget salary. On the other hand, broad-bandedstructures cover too broad a span of pay to enableall jobs in the same band to be paid against thesame target. Bands may provide greater flexibilityand often focus management’s pay decisions moreon individual capability than job size. In times oflow year-over-year wage inflation, bands may allowbiases to enter into pay practices that are difficultto remove and which may reduce the organization’sability to control costs.Note that broad banding is likely t
job’s content is analyzed relative to each factor and assigned a numerical value. These factor values are then totaled to determine the overall job ‘size.’ The various job size relationships, as well as the factor proportions associated with each job, can be useful in a number of
POINT METHOD OF JOB EVALUATION -- 2 6 3 Bergmann, T. J., and Scarpello, V. G. (2001). Point schedule to method of job evaluation. In Compensation decision '. This is one making. New York, NY: Harcourt. f dollar . ' POINT METHOD OF JOB EVALUATION In the point method (also called point factor) of job evaluation, the organizationFile Size: 575KBPage Count: 12Explore further4 Different Types of Job Evaluation Methods - Workologyworkology.comPoint Method Job Evaluation Example Work - Chron.comwork.chron.comSAMPLE APPLICATION SCORING MATRIXwww.talent.wisc.eduSix Steps to Conducting a Job Analysis - OPM.govwww.opm.govJob Evaluation: Point Method - HR-Guidewww.hr-guide.comRecommended to you b
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