There's more to Job Evaluation than meets the eye.

Contrary to predictions, there is no sign that large complex organisations have abandoned job evaluation. Indeed, its use continues to grow substantially. The Hay method alone is today used by more than half the companies in the Fortune Top 50 and a similar proportion of Europe’s largest companies to generate value from their paybill. In the public sector, the current introduction of the NHS’s own scheme to underpin the ‘Agenda for Change’ pay reform programme is possibly the world’s largest ever installation.

Nevertheless, experienced practitioners have been concerned for some time about the limited usage in most organisations of job evaluation and the data it produces. There is overwhelming evidence that job evaluation is too often used only for a limited range of purposes, and is not properly seen as having a key role in human resource management. Currently, it is chiefly used to underpin a grading structure, often relatively broad-banded; establish scores for internal and external pay benchmarking; give some reassurance to organisations and employees about equal pay; and provide some insight into organisation design and career paths.

Look again at job evaluation

Against this background, colleagues in Hay Group have looked again at job evaluation, particularly at senior, middle management and professional levels. We believe it can be made a much more transparent and user-friendly process with the potential to yield huge benefits to organisations, especially in the talent management area. We at Hay Group believe organisations can revise their approaches to job evaluation, especially at senior and middle management levels, to gain far greater value from them.

Development of our approach began from the fact that the Hay method looks at both job size and shape. Hay Guide Charts enable the accurate and robust judgement of job size, and the concept of job shape is used as a check on the validity of the judgments made. Our research suggests that for management, and even supervisory/professional positions, job shape can also be used much more extensively, and independently of the Guide Charts, to:

• assess job size; and
• integrate job evaluation and competency assessment.

There are two components to job shape:

• the level of work;
• the nature of work.

Level and nature of work

Other authorities, including Elliott Jaques in Requisite Organisation and other publications, have explored work levels by focusing on the timespan of discretion. We have drawn on job evaluation concepts to refine and develop this thinking. In assessing the level of work, evaluators are essentially concerned with the horizons against which a position is operating or the size of the canvass it is painting. Across most large enterprise management populations, we believe a maximum of five work levels can be discerned for senior managers, and two or three more for what are normally thought of as ‘middle managers’. Using the Hay Job Evaluation Method, these work levels are identified essentially through the problem-solving score. In other words, 57 per cent of problem solving denotes a higher level of work than does 50 per cent and a lower level than 66 per cent.

In relation to the nature of work, the Hay Job Evaluation Method is used to assess the extent to which jobs have accountability for the delivery of quantifiable business results or whether they are oriented towards planning and supporting change. Across management populations we can readily distinguish three kinds of roles:

• Business and operations: those with direct command of resources, expected to deliver operational and/or business results. Typically, jobs involved in sales, production, retail operations, customer service centres etc;
• Co-ordination and commercial: positions accountable for business and/or operational results, but have to achieve these through strategic or operational relationships with internal or external partners rather than by direct command and control of their ‘own’ resources;
• Planning and policy: primarily concerned with providing analysis, advice and support to business operations. These clearly contribute to business success (otherwise they would not exist) but their impact is more subtle and often longer term than the other roles identified. Typical examples are in financial planning, human resources, legal and business strategy.

Using the Hay Method, the nature of roles in these terms is reflected in the balance between the problem-solving and accountability factors.

Role type matrix developed

Taking work level and nature of work together, we have developed a role type matrix of up to 15 different job types which account for well over 90 per cent of the roles across senior management populations in all types of organisations. The matrix is shown in the box below and it can be extended to cover middle managers, supervisors and professionals. Each of the 15 role types can be defined in terms of the generic characteristics of the work undertaken and the behaviours required for effective performance. Beyond that, each cell will contain a range of specific job sizes. The matrix can therefore provide a framework for determining Hay job evaluation without reference to the guide charts, and for assessment and development purposes. Each cell can contain up to six steps of job size, although in most organisations the number will tend to be smaller (typically four).

                                         Nature of work

Job size can be determined by answering two questions. First, what type of role is being  evaluated and in which cell does it belong? Second, within its type, is it small, medium, large or very large? Taking a simple example, the business and operations/strategic implementation cell in a manufacturing firm may cover plant directors with accountability for small, medium, large and very large plant operations. For roles such as plant directors, it will normally be easy to answer the second question. But other cells may include more diversity.

The planning and policy/strategic implementation role type, for instance, may encompass financial controllers, HR directors, and quality directors from a range of different subsidiaries.  Here, the question as to whether a role within the cell is bigger or smaller boils down to assessing the significance – the scale and criticality – of the contribution required from the role. Such  assessment can be made by those familiar with the Hay Guide Charts by reference to the accountability chart or by using a custom-built questionnaire.

In our experience, evaluating jobs in this way has significant practical advantages in enabling line managers to participate properly and in a more informed way. In consequence, decisions about job size gain greater line ownership. This should be attractive to remuneration managers who wish to involve their ‘clients’ in the pay determination process and talk to them in terms of business issues.

Linking jobs and people through the matrix

The advantages of the matrix go much further than enriching the job evaluation process itself. The new approach is also capable of providing a framework against which talent can be managed in an informed way by bringing together the jobs in an organisation, what successful performance looks like in them, the competencies required to achieve this, and reward management. Indeed, in several companies, the technique is already being used to bring together the traditionally separate processes of job and people assessment, to the advantage of both.

All this can be done with confidence because we extended our research to test a fundamental hypothesis – that differently shaped jobs must demand differently shaped people. This has been rigorously examined by the McClelland Centre in Boston, where our consultants maintain a comprehensive database of behavioural event interviews conducted with senior managers across major world class organisations.

Four hundred high performers

Four hundred high performers were identified from the database, and their roles were assessed in terms of the level and nature of their work. This showed which cell of the matrix they belonged to and the analysis of the behavioural competencies associated with high performers revealed clear differences between the qualities associated with success. These differences were found consistently along both sides of the matrix. For example, critical competencies displayed in business and operations, such as ‘holding to account’ and ‘directiveness’, were in many cases substantially different from those found among outstanding performers in planning and policy roles, such as ‘influencing’ and ‘service orientation’ towards internal customers. Competencies associated with co-ordination and commercial roles were generally found to be more diverse and arguably more demanding than for the other groups. Looking at the other axis of the matrix, the data demonstrated that higher work levels consistently demand competencies at a higher level if outstanding success is to be achieved. This research has significant implications:

• we are now able to link Hay job evaluation, through the matrix, to incumbent competency requirements;
• leadership development and assessment programmes need to be based on a clear understanding of specific role requirements rather than on the implicit assumption that all leaders and managers need the same qualities to perform well;
• a framework is established that is understood throughout organisations as the basis for managing talent in the most effective way.