The Hay Job Evaluation System

Answer 1

The Hay Job Grading Scheme was developed in the early 1950's by E. N. Hay and Associates. It is a scheme which is based on the "points factor" approach. This is a common approach to job grading. The process has the following basic steps: A description of the job is made including such things as: expertise required, accountabilities, experience required, functions performed, financial impact of the job, freedom to decide and act, number of staff supervised, pre-eminence of the position, influence of the position within the company etc. The various aspects of the job given in the description are usually split into categories. For example, in the Hay system the categories are: ¨ Know How ¨ Problem Solving ¨ Accountability ¨ Working Conditions (This was included after the initial creation of the scheme in an attempt to enable the Hay system to be applied to blue collar occupations). Other systems may have different sets of categories. For example, the OCR system, uses the following categories: ¨ Knowledge, Skills and Experience ¨ Reasoning and Decision Making ¨ Communication and Influence ¨ Accountability and Responsibility The description of the job is done under the headings given by the job grading system's categories. This description of the job is then compared with a standard set of descriptors (i.e. a set of statements from the job grading manual which describe the aspects of a job) and the most appropriate descriptors, in each category, for that job are selected from the set. So, for the Hay system, a manual with descriptors in each of the above categories is used to grade the job. The job grader selects the descriptor which (in their view) most accurately describes that category of the job. (An example of a Hay descriptor under the category of "Know How" is: "Jobs requiring procedural or systematic proficiency, which may involve a facility in the use of specialized equipment.") Each descriptor has a score associated with it. For example, in the Hay system there is a point score for each of "Know How", "Problem Solving" and "Accountability". These factor points are then used to calculate a total "points factor" score for that job. This task is repeated for all jobs within the company. The tally score for each job is then interpreted as the importance of that job within the company relative to the other jobs within the company. If the system is related to pay, then a level of pay is associated with each tally score. Often, tally scores are grouped into a single pay level. For example, scores from 100 to 150 may all be paid $35,000. Using this process, the claim is that these systems provide a fair and equitable method of rating the relative importance of all jobs in a company, from the CEO to the part-time janitor. thus it purportedly gives equal pay for work of equal value within a company. In fact, the Hay system was originally designed specifically for the evaluation of managerial jobs. As stated by Hay: "We have seen that the Guide Chart Profile Method was designed for a specific purpose - evaluating managerial and technical jobs in order to get equitable salary standards." In the personnel journals of the time, Hay justified his system as a system that would "fight for better salaries for corporate executives" Right from its inception, the Hay system was designed with a bias toward managerial and executive levels. The Hay scheme has also tried to construct a comparison of pay levels between companies. This is done by including in the Hay scheme: The Hay manual has a set of "common descriptors" which are applied for all jobs in all companies. (Although there is the possibility of including "un-common descriptors" this makes the comparison of jobs difficult and so is avoided whenever possible.) The claim is that the use of these common descriptors means you are comparing "like with like" across an industry. Non use of specialized terms or definitions of terms in the generic descriptors. (For example, the Hay descriptor presented above in step 3 uses very general wording.) So, rather than use words such as "expert in communications theory" the more generic wording such as "determinative mastery of principles" are used. The use of employment market surveys of pay to construct a relationship between Hay Scores of similar jobs in different companies and their corresponding pay. For example, in the information technology industry, a Hay score of 600 may (on average) be approximately associated with a pay of $40,000. Using this approach, an employer may claim that a job with a Hay score of 600 and a salary of $50,000 is over paid. Although this methodology may sound quite reasonable there are, however, many problems with these schemes which are not immediately apparent. Some of these problems, in regard to the Hay System, are discussed below. 2. The 15% Rule The basis for the point allocation in the Hay Scheme is the so-called Weber's Law. This law is based on a range of "psychometric" experiments published in 1948. In these results experimenters noted that when the physical weight of two objects differed by more than 15%, people could distinguish between their weights just by lifting them. Hay xtrapolated this result to the ability to distinguish between human behaviors and based his points factor allocation tables upon this result. The validity of this extrapolation has been questioned. For example, is it valid to extrapolate this rule from weight to the ability to distinguish between job-related activities? 3. It is all in the Application There are two key problems with generic descriptors. Firstly, they are unavoidably vague and secondly, they are culturally biased. Because the descriptors are generic, they are vague. Therefore, the application of these descriptors to a job involves a high degree of subjectivity. This means the biases of the person (or group) implementing the scheme will result in a bias in the rating of jobs. Hay has attempted to address this issue, however, management control of the implementation of the scheme will most likely result in the scheme giving the results management wants whether or not the result is fair. Turning to the issue of cultural bias, as stated above, a "descriptor" is a sentence which is designed to describe an aspect of a job. Just as there is no such thing as a society without a culture, there is no such thing as a "value free" descriptor. Hence, generic descriptors intrinsically favor certain job types. The Hay system suffers at least three aspects of cultural bias. It is techno-centric and hierarchical as well as strongly based on 1950's USA corporate culture. 4. Technology verses the Human Factor Hay is "techno-centric". The Hay descriptor quoted above (in step 3 of the Introduction above) is an example. This descriptor refers to "a facility to use special equipment". A common criticism of Hay is that workers who operate or work with equipment and technology rate higher than those who work with people (eg. customers). This has a side effect of introducing a gender bias into the system, since male workers are more prevalent in technology related jobs and female workers tend to occupy "people related" jobs. The Hay Group is aware its methodology has been criticized on the grounds of gender bias. In an attempt to deal with this criticism it has produced a Code of Practice. However, there is no guarantee an employer using Hay will follow this code. ===