HAY Method

7/29/2019 HAY Method

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Overview of the Four Compensable Factors

1. Know-How

This Guide Chart measures the total knowledge, skills and competencies required in a job torealize its accountabilities and to perform the job in an acceptable manner. It consists of three

dimensions:

Cognitive: Practical procedures and knowledge, specialized techniques, andlearned skills; Managerial: The real or conceptual planning, coordinating, directing, and controllingof activities and resources associated with an organizational unit or function; and, Human Relation: Active, practicing, person-to-person skills in the area of humanrelationships.

Cognitive Know-How

Level Explanation

A. Basic -

Unskilled

Work of this kind is extremely simple, short cycle in nature, and typically

involves manual effort. Familiarity with simple work routines; work

indoctrination.

B. Elementary

Semi-skilled

Capable of carrying out uninvolved, standard procedures AND/OR using

equipment or machines which are simple to operate.

C. Vocational -

Skilled

Experienced in applying methods or procedures, which generally are well

defined and straightforward, but with occasional deviations. Skill in the use

of specialized equipment may be needed.D. Advanced

Vocational -

Specialized

Accomplished in implementing practical procedures or systems, which are

moderately complex AND/OR specialized skills, which require some

technical knowledge (usually non-theoretical) to apply.

E. Professional

Conceptual

thinking and

working

A sound understanding of and skill in several activities which involve a

variety of practices and precedents OR a basic understanding of the theory

and principles in a scientific or similar discipline.

F. Seasoned

Professional Technical

Specialist

Extensive knowledge and skill gained through broad or deep experiences

in a field (or fields) which requires a command of EITHER involved, diverse

practices and precedents OR scientific theory and principles OR both.

G. Professional

Mastery - Highly

Specialized

Mastery of theories, principles, and complex techniques OR the diverse,

cumulative equivalent gained through broad seasoning AND/OR special

development.

H. Exceptional

Mastery Unique

Externally recognized mastery of concepts and principles, theories and

their applications within a scientific/ specific field and groundbreaking work


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Authority within this field.

Managerial Know How

This is know-how required to integrate and harmonize diversified functions involved inmanagerial situations (operating, supporting and administering). It is practiced directly in "line"

assignments, consultatively in "staff" assignments or both ways. This factor reflects theknowledge and skill required for integrating and harmonizing activities, resources and functionsinvolving some combination of planning, organizing, integrating, coordinating, evaluating,staffing and/or controlling. Managerial Know How is reflected on the guide charts as the values"T" (task, which is essentially none), "I" (minimal), "II" (diverse), "III" (broad), and IV" (total).

Managerial Know How is a continuum like all other factors in the ranking process. Evaluatorsmust always compare what levels apply to a job being evaluated relative to otherpositions in the organization. For example, Directors and Maintenance supervisors both planbut there is a significant difference in difficulty, scope and time frames. The organizationalstructure in which a job exists must be considered so that the job above the one beingevaluated and its impact is considered. The next layer above the job being evaluated is there

because the job being evaluated cannot "do it all" on its own. The level above brings addedvalue from the standpoint of planning, organizing and coordinating activities. Layers ofmanagement cannot be ignored with respect to their impact on the positions below both inmanagerial know how and freedom to act.

Explanations for the levels follow.

Level Explanation

0.

Task

Performance of a task(s) highly specific as to objective and content, and not

involving the leadership of others.

I.

Activity

Performance or direction of activities, which are similar as to content and objectives

with appropriate awareness of other activities.

II.

Related

Direction of an important unit with varied activities and objectives OR guidance of an

important sub-function(s) or several important elements across several units.

III.

Diverse

Direction of a major unit with noticeable functional diversity OR guidance of a

function(s) which significantly affects all or most of the organization.

IV.

FC

Functionally complete - Management of all units and functions within the

organization.

V.

Complex

Managerial Integration of all activities in a very large complex organization, almost

certainly with international dimensions


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Human Relations Skills

Human Relations Skills are the active, face to face skills needed by a job holder for variousrelationships with other people within and outside of the organization. Human Relations Skills

range from "1" (basic), to "2" (important), to "3" (critical). It must be kept in mind that "1" is not a"0". It is assumed that all jobs require a minimum of common politeness. At the oppositeextreme, a job that requires the ability to motivate, convince or sell others to gain results is a "3".Human Relations skills are not synonymous with being a nice person and they are notnecessarily interchangeable. Level descriptions follow.

Level Explanation

1. Basic This is the base level of interpersonal skill utilized by most individuals in thecourse of performing the job.

Maintaining courteous and effective working relationships with others to requestor transmit information, ask questions or get clarification.

2. Important This level of interpersonal skill is required in jobs in which understanding andinfluencing people are important requirements in the job.

Skills of persuasiveness or assertiveness as well as sensitivity to the otherperson's point of view are often required to influence behavior, change anopinion, or turn a situation around. The requirement for public contact does notnecessarily demand this level of human relations skills, particularly if thepurpose is to provide or solicit information.

In addition, positions which assign work and/or monitor and review work ofother employees (generally supervising AUPE positions), usually require atleast this level of skill.

3. Critical The highest level of interpersonal skill is usually required by positions in whichalternative or combined skills in understanding and motivating people areimportant in the highest degree.

Jobs which require negotiating skills are often found at this level, butconsideration has to be given to the power bases being utilized.

For example, In negotiations between buyers and sellers of products, services,concepts, or ideas, less Human Relations skill may be required by the "buyer"who has the latitude to say "no" than by the seller who must turn the "no" to"yes". This level of skill is usually required for positions accountable for thedevelopment, motivation, assessment and reward of other employees.


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2. Problem Solving

This Guide Chart measures the thinking required in the job by considering two dimensions:

The environment in which the thinking takes place; and,

The challenge presented by the thinking to be done.

Problem Solving is the amount and nature of the thinking required in the job for analyzing,reasoning, evaluating, creating, exercising judgement, forming hypotheses, drawing inferences,arriving at conclusions and the like. To the extent that thinking is limited or reduced by jobdemands or structure, covered by precedent, simplified by definition, or assisted by others, thenproblem solving is diminished and results are obtained by the automatic application of skillsrather than by the application of the thinking processes to knowledge.

Problem Solving measures the extent by which Know-How is employed or required. "You thinkwith what you know." Therefore Problem Solving is treated as a percentage of Know-How.

The evaluation of Problem Solving should be made without reference to the job's

freedom to make decisions or take action; these are measured on the AccountabilityChart.

Thinking Environment Freedom to Think

Level Explanation

A. Strict RoutineThinking within very detailed and precisely defined rules and instructions

and/ orwith continually presents assistance.

B. RoutineThinking within detailed standard practices and instructions AND/OR with

immediately available assistance or examples.

C. Semi-Routine

Thinking within well-defined, somewhat diversified procedures. There are

many precedents covering most situations AND/OR readily available

assistance.

D. StandardizedThinking within clear but substantially diversified procedures. There are

precedents covering many situations AND/OR access to assistance.

E. Clearly Defined

Thinking within a well-defined frame of reference and toward specific

objectives. This is done in situations characterized by functional

practices and precedents.

F. Broadly DefinedThinking within a general frame of reference toward functional objectives.This is done in situations characterized by nebulous, intangible or

unstructured aspects

G. Generally

Defined

Thinking within concepts, principles and broad guidelines towards the

organizations objectives or functional goals. This is done in an

environment that is nebulous, intangible, or unstructured.

H. Abstractly Thinking within business philosophy AND/OR natural laws AND/OR


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Defined principles governing human affairs.

Thinking Challenge

Level Explanation

1. Repetitive Identical situations requiring resolution by simple choice of known things.

2. PatternedSimilar situations requiring search for solutions within area of known

things.

3. VariedDiffering situations requiring search for solutions within area of known

things

4. AdaptiveVariable situations requiring analytical, interpretative, evaluative, and/or

constructive thinking.

5. Unchartered

Novel or nonrecurring path-finding situations requiring the development of

new concepts and imaginative approaches.


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3. AccountabilityThis Guide Chart measures the relative degree to which the job, performed competently, can

affect the end results of the organization or of a unit within the organization. Accountability is

related to the opportunity which a job has to bring about some results and the importance of

those results to the organization. Tied closely to the amount of opportunity is the degree to

which the person in the job must answer for (is accountable for) the results.

It reflects the level of decision-making and influence of the job through consideration, in the

following order of importance, of: Freedom to Act: The nature of the controls that limit or extend the decision-making orinfluence of the job;

Job Impact on End Results: The immediacy of the influence of the job on a unit orfunction of the organization; and,

Magnitude: The magnitude of the unit or function most clearly affected by the job.

Freedom To ActFreedom to act measures the nature of the controls that limit or extend the decision-making or

influence of the job. It is measured by the existence or absence of personal or procedural

control and guidance (supervision and guidance). Limitations on freedom to act are largely

organizational (relating to both organizational placement and control as well as the nature of the

activity in terms of end results and can differ between seemingly equivalent jobs in differentdepartments). Freedom to act in a job is constrained to the degree that it is more circumscribed

or limited by external factors or is defined by others and/or is limited by organization or

functional policies.

Level Explanation

A.Prescribed

These jobs are subject to explicit, detailed instructions AND/OR constantpersonal or procedural supervision.

B.

Controlled

These jobs are subject to direct and detailed instructions AND/OR very close

supervision.

C.Standardized

These jobs are subject to instruction and established work routines AND/ORclose supervision.

D.GenerallyRegulated

These jobs are subject, wholly or in part, to standardized practices andprocedures, general work instructions and supervision or progress and results.

E.Directed

These jobs are subject, wholly or in part, to practices and procedures coveredby precedents or well-defined policies, and supervisory review.

F.GenerallyDirected

These jobs, by their nature and size, are subject to broad practices andprocedures covered by functional precedents and policies, achievement of acircumscribed operational activity, and to managerial direction.

G.Guided

These jobs, by their nature or size, are broadly subject to functional policies andgoals and to managerial direction of a general nature.

H. Subject to the guidance of broad organization policies, community or legislative

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StrategicallyGuided

limits, and the mandate of the organization.

MAGNITUDE

Magnitude represents the size of the unit or function most clearly affected by the job. Everyposition in every organization has a role to play in helping to achieve the objectives of theorganization; however the importance of this role is better understood in the context of adepartment, or a faculty.

The underlying notion in order to score the magnitude component is to recognize that Impactand Magnitude judgments must be made in tandem. There are some organizations that usedollars (budget) as a useful quantitative measure of size; however, the University of Lethbridgescores the Magnitude component by fitting Magnitude and Impact together.

Instead of using static dollars as a quantitative measure of size, the task is to (1) identify themagnitude of the area most clearly impacted by the job (i.e. across the University for severalunrelated functions, or within one unit, etc.), and (2) measure the jobs impact at that point.

The question to be answered is: Does the positions magnitude impact within one unit, or doesit impact across the University for one function, or perhaps across the University for severalunrelated functions? This would differentiate the Magnitude scoring.

Another check is to look at the Problem Solving scoring. Positions where accountability tends tobe greater than problem solving (i.e. owner of a business) would have a higher accountabilityscore. The assumption is that a position is balanced (i.e. problem solving = accountability),unless actions or activities in the position prove otherwise.

Level Explanation

Indeterminate Cannot be determined quantitatively or variable

Very Small 37500 - 375000

Small 375000 - 3.75m

Medium 3.75m - 37.5m

Large 37500 - 375000

Very Large 37500 - 375000

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IMPACT

Impact: The degree to which the job affects or brings about the results expected of the unit orfunction being considered. This is the influence of the job on a unit.

Level Explanation

WHEN MAGNITUDE CANNOT BE DETERMINED

A MinimalPerformance of simple and repetitive activities, with no direct relationship to other jobs.

B LimitedOperation or maintenance of simple/ancillary equipment/machines. Performance ofroutine activities, such as storing / providing information, for use by others.

C ImportantOperation or maintenance of major / complex plant or equipment.Performance/supervision of activities which require technical insight and proficiencyand/or administrative activities where knowledge, analysis and interpretation is ofimportance; there is an impact on the end results of others

D CriticalControl of a major process unit. Performance of specialised advisory, diagnostic and/oroperational services.

WHEN MAGNITUDE CAN BE DETERMINED

R RemoteOne of several/many positions, which contribute to the end results expected of the unitor functions OR informational, recording, or other facilitating services for use by othersin achieving results.

C ContributoryOne of few positions which contribute significantly to the end results expected of theunit or function OR interpretive, advisory, or other important supporting services for useby others in achieving results.

S Shared

Equal and joint control, with one other position, of the activities and resources whichproduce the results OR control of what are clearly most (but not all) of the variableswhich are significant in determining results.

P PrimeControlling impact - the position has effective control over the significant activities andresources which produce the results and is the sole position (at this level of Freedom to

Act) which must answer for the results.

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STEPS TO DETERMINING HAY SCORE FOR A JOB

Considering an arbitrary profile ^

1. Determine the Technical Know-How level Note the row A

to H

2. Determine Breadth of Management Know-How Note the

column 0 to 5

3. Determine the human relations skills within the

corresponding matrix found through the intersection of the

above row and column 1 to 3

4. Find the overall know-how score It will be the final

correspondence of all the three dimensions on the table,

which will show 3 values placed vertically. They are:

Middle score the indicative score

Upper score and lower score used to fine tune the

score using judgment

5. The job will now have a know-how level notation e.g. D III 2

(Technical, Management, Human Relations) and also a know-

how score ranging from 230 - 264 - 304

6. Determine the Freedom to Think level Note the row A to

H

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7. Determine the Thinking Challenge level Note the column

1 to 5

8. Note the percentage values mentioned in the cell

represented by the correspondence of the row and the

column

9. Multiply the know-how score with the percentage noted

above. One may fine tune this value using the range of the

values represented by the two percentage points

10. The job will now have a problem solving level notation e.g. F

5 (Freedom, Challenge) and also a problem solving score304*76% = 231

11. Determine the Freedom to Act level Note the row A to H

12. Determine the Magnitude of Impact Note the column

Indeterminate or 1 to 5

13. If Indeterminate, then determine nature of impact* A to D

14. If magnitude 1 to 5, then determine nature of impact* R

or C or S or P

15. Find the overall Accountability score It will be the finalcorrespondence of all the three dimensions on the table,

which will show 3 values placed vertically. They are:

Middle score the indicative score

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Upper score and lower score used to fine tune the

score using judgment

16. The job will now have an Accountability level notation e.g. E

4 P (Freedom, Magnitude, Nature) and also a know-how

score ranging from 304 - 350 - 400

17. Thus the job will finally indicate the following scores:

(consider highest)

Know-How (KH) => 304

Problem Solving (PS) => 231

Accountability (Ac) => 400

TOTAL => 935 (may be considered out of a max

possible of 5280.8)

18.The following steps deal with profile and factor weighting:Check how many 15% steps** the PS and AC scores differ by(use Hay step difference table) 4 steps

19. This makes the profile an A4 profile

20. Now, find the PS score as percentage of total 25%

21. In the table on Short Profile determine the correspondence

between an A4 profile and 25% PS score Note the three

values 59 - 15 - 26

22. Now that represents our final percentage points for

each of the universal factors: Know-How weightage => 59%

Problem Solving weightage = > 15%

Accountability weightage => 26%

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23. Now the evaluator has to consider if the profile

matches his approximate appropriation. If not, the job should

be reevaluated for the factors.

24. Generally, it is postulated that: (see sheet 6)

PS profiles are associated with research oriented jobs

AC profiles are associated with line jobs

Footnotes

^ Doing an actual evaluation requires considerable amount of training through/ by

the Hay Group Professionals In fact the system is upgraded from time to time and

requires retraining from time to time This is how the Hay Group makes its revenue

model foolproof by ensuring that training for use of the system becomes binding

* Determine the human relations skills within the corresponding matrix found

through the intersection of the above row and column 1 to 3

** 15% is due to Webers Law 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

QUESTIONS TO PONDER

1. Why only A1 to A4 and P1 to P4 other than level level?

Above that it needs to be reevaluated

2. How KH is accounted for in Short Profile?

PS which is considered, is already a percentage factor of KH

3. Steinberg argues that the classical Guide Chart system isinappropriate for measuring non-managerial positions because of five

problematic assumptions embedded in the system:

1. Managers are high-level employees who perform the mostcomplex and responsible jobs in an organization;

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2. Non-managers are low-level employees engaged in simple workof limited complexity with limited responsibilities

3. Complexity is considered uni-dimensionally as organizationalcomplexity

4. Only managers think, whereas non-managers do5. Responsibility is defined as formal or ultimate responsibility and

not as practical or actual responsibility

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