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 an

Hay Group’s job evaluation approach is the world’s most widely utilized, accepted, and tested over time as a fair and unbiased way to determine job worth. Organizations use the Korn Ferry Hay Group methodology to evaluate jobs against a set of . common factors that measure inputs required (knowledge, skills, and capabilities), throughputs (processing of inputs to achieve results), and .