Overview of the Four Compensable Factors 1.

Know-How
This Guide Chart measures the total knowledge, skills and competencies required in a job to realize its accountabilities and to perform the job in an acceptable manner. It consists of three dimensions: Cognitive: Practical procedures and knowledge, specialized techniques, and learned skills; Managerial: The real or conceptual planning, coordinating, directing, and controlling of activities and resources associated with an organizational unit or function; and, Human Relation: Active, practicing, person-to-person skills in the area of human relationships.

Cognitive Know-How
Level
A. Basic Unskilled B. Elementary Semi-skilled C. Vocational Skilled D. Advanced Vocational Specialized E. Professional Conceptual thinking and working F. Seasoned Professional Technical Specialist G. Professional Mastery - Highly Specialized H. Exceptional Mastery Unique

Explanation
Work of this kind is extremely simple, short cycle in nature, and typically involves manual effort. Familiarity with simple work routines; work indoctrination. Capable of carrying out uninvolved, standard procedures AND/OR using equipment or machines which are simple to operate. 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. 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. 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. 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. Mastery of theories, principles, and complex techniques OR the diverse, cumulative equivalent gained through broad seasoning AND/OR special development. Externally recognized mastery of concepts and principles, theories and their applications within a scientific/ specific field and groundbreaking work

Authority

within this field.

Managerial Know How

This is know-how required to integrate and harmonize diversified functions involved in managerial situations (operating, supporting and administering). It is practiced directly in "line" assignments, consultatively in "staff" assignments or both ways. This factor reflects the knowledge and skill required for integrating and harmonizing activities, resources and functions involving 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. Evaluators must always compare what levels apply to a job being evaluated relative to other positions in the organization. For example, Directors and Maintenance supervisors both plan but there is a significant difference in difficulty, scope and time frames. The organizational structure in which a job exists must be considered so that the job above the one being evaluated 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 added value from the standpoint of planning, organizing and coordinating activities. Layers of management cannot be ignored with respect to their impact on the positions below both in managerial know how and freedom to act. Explanations for the levels follow.

Level
0. Task I. Activity II. Related III. Diverse IV. FC V. Complex

Explanation
Performance of a task(s) highly specific as to objective and content, and not involving the leadership of others. Performance or direction of activities, which are similar as to content and objectives with appropriate awareness of other activities. 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. Direction of a major unit with noticeable functional diversity OR guidance of a function(s) which significantly affects all or most of the organization. Functionally complete - Management of all units and functions within the organization. Managerial Integration of all activities in a very large complex organization, almost certainly with international dimensions

Human Relations Skills

Human Relations Skills are the active, face to face skills needed by a job holder for various relationships 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 opposite extreme, 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 not necessarily interchangeable. Level descriptions follow.

Level
1. Basic

Explanation
This is the base level of interpersonal skill utilized by most individuals in the course of performing the job. Maintaining courteous and effective working relationships with others to request or transmit information, ask questions or get clarification.

2. Important

This level of interpersonal skill is required in jobs in which understanding and influencing people are important requirements in the job. Skills of persuasiveness or assertiveness as well as sensitivity to the other person's point of view are often required to influence behavior, change an opinion, or turn a situation around. The requirement for public contact does not necessarily demand this level of human relations skills, particularly if the purpose is to provide or solicit information. In addition, positions which assign work and/or monitor and review work of other employees (generally supervising AUPE positions), usually require at least this level of skill.

3. Critical

The highest level of interpersonal skill is usually required by positions in which alternative or combined skills in understanding and motivating people are important in the highest degree. Jobs which require negotiating skills are often found at this level, but consideration 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 the development, motivation, assessment and reward of other employees.

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 job demands or structure, covered by precedent, simplified by definition, or assisted by others, then problem solving is diminished and results are obtained by the automatic application of skills rather than by the application of the thinking processes to knowledge. Problem Solving measures the extent by which Know-How is employed or required. "You think with 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 Accountability Chart.

Thinking Environment Freedom to Think

Level
A. Strict Routine B. Routine

Explanation
Thinking within very detailed and precisely defined rules and instructions and/ or with continually presents assistance. Thinking within detailed standard practices and instructions AND/OR with immediately available assistance or examples. Thinking within well-defined, somewhat diversified procedures. There are many precedents covering most situations AND/OR readily available assistance. Thinking within clear but substantially diversified procedures. There are precedents covering many situations AND/OR access to assistance. Thinking within a well-defined frame of reference and toward specific objectives. This is done in situations characterized by functional practices and precedents. Thinking within a general frame of reference toward functional objectives. This is done in situations characterized by nebulous, intangible or unstructured aspects 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. Thinking within business philosophy AND/OR natural laws AND/OR

C. Semi-Routine

D. Standardized

E. Clearly Defined

F. Broadly Defined

G. Generally Defined H. Abstractly

Defined

principles governing human affairs.

Thinking Challenge
Level
1. Repetitive 2. Patterned 3. Varied 4. Adaptive 5. Unchartered

Explanation
Identical situations requiring resolution by simple choice of known things. Similar situations requiring search for solutions within area of known things. Differing situations requiring search for solutions within area of known things Variable situations requiring analytical, interpretative, evaluative, and/or constructive thinking. Novel or nonrecurring path-finding situations requiring the development of new concepts and imaginative approaches.

3. Accountability
This 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 or influence of the job; Job Impact on End Results: The immediacy of the influence of the job on a unit or function of the organization; and, Magnitude: The magnitude of the unit or function most clearly affected by the job.

Freedom To Act
Freedom 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 different departments). 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
A. Prescribed B. Controlled C. Standardized D. Generally Regulated E. Directed F. Generally Directed G. Guided H.

Explanation
These jobs are subject to explicit, detailed instructions AND/OR constant personal or procedural supervision. These jobs are subject to direct and detailed instructions AND/OR very close supervision. These jobs are subject to instruction and established work routines AND/OR close supervision. These jobs are subject, wholly or in part, to standardized practices and procedures, general work instructions and supervision or progress and results. These jobs are subject, wholly or in part, to practices and procedures covered by precedents or well-defined policies, and supervisory review. These jobs, by their nature and size, are subject to broad practices and procedures covered by functional precedents and policies, achievement of a circumscribed operational activity, and to managerial direction. These jobs, by their nature or size, are broadly subject to functional policies and goals and to managerial direction of a general nature. Subject to the guidance of broad organization policies, community or legislative

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Strategically Guided

limits, and the mandate of the organization.

MAGNITUDE
Magnitude represents the size of the unit or function most clearly affected by the job. Every position in every organization has a role to play in helping to achieve the objectives of the organization; however the importance of this role is better understood in the context of a department, or a faculty. The underlying notion in order to score the magnitude component is to recognize that Impact and Magnitude judgments must be made in tandem. There are some organizations that use dollars (budget) as a useful quantitative measure of size; however, the University of Lethbridge scores 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 the magnitude of the area most clearly impacted by the job (i.e. across the University for several unrelated 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 does it impact across the University for one function, or perhaps across the University for several unrelated functions? This would differentiate the Magnitude scoring. Another check is to look at the Problem Solving scoring. Positions where accountability tends to be greater than problem solving (i.e. owner of a business) would have a higher accountability score. The assumption is that a position is balanced (i.e. problem solving = accountability), unless actions or activities in the position prove otherwise.

Level
Indeterminate Very Small Small Medium Large Very Large

Explanation
Cannot be determined quantitatively or variable 37500 - 375000 375000 - 3.75m 3.75m - 37.5m 37500 - 375000 37500 - 375000

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

Level

Explanation
WHEN MAGNITUDE CANNOT BE DETERMINED

A B

Minimal Performance of simple and repetitive activities, with no direct relationship to other jobs. Limited Operation or maintenance of simple/ancillary equipment/machines. Performance of routine activities, such as storing / providing information, for use by others. Important Operation or maintenance of major / complex plant or equipment. Performance/supervision of activities which require technical insight and proficiency and/or administrative activities where knowledge, analysis and interpretation is of importance; there is an impact on the end results of others Critical Control of a major process unit. Performance of specialised advisory, diagnostic and/or operational services. WHEN MAGNITUDE CAN BE DETERMINED

Remote One of several/many positions, which contribute to the end results expected of the unit or functions OR informational, recording, or other facilitating services for use by others in achieving results. Contributory One of few positions which contribute significantly to the end results expected of the unit or function OR interpretive, advisory, or other important supporting services for use by others in achieving results. Shared Equal and joint control, with one other position, of the activities and resources which produce the results OR control of what are clearly most (but not all) of the variables which are significant in determining results. Prime Controlling impact - the position has effective control over the significant activities and resources which produce the results and is the sole position (at this level of Freedom to Act) which must answer for the results. Page 3

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 Determine Breadth of Management Know-How Note the column 0 to 5 Determine the human relations skills within the corresponding matrix found through the intersection of the above row and column 1 to 3 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 The job will now have a know-how level notation e.g. D III 2 (Technical, Management, Human Relations) and also a knowhow score ranging from 230 - 264 - 304

2.

3.

4.

5.

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 Note the percentage values mentioned in the cell represented by the correspondence of the row and the column 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 The job will now have a problem solving level notation e.g. F 5 (Freedom, Challenge) and also a problem solving score 304*76% = 231

8.

9.

10.

11.

Determine the Freedom to Act level Note the row A to H Determine the Magnitude of Impact Note the column Indeterminate or 1 to 5 If Indeterminate, then determine nature of impact* A to D If magnitude 1 to 5, then determine nature of impact* R or C or S or P Find the overall Accountability 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

12.

13.

14.

15.

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 Upper score and lower score used to fine tune the score using judgment 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

16.

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 This makes the profile an A4 profile Now, find the PS score as percentage of total 25% In the table on Short Profile determine the correspondence between an A4 profile and 25% PS score Note the three values 59 - 15 - 26

19. 20. 21.

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 is inappropriate for measuring non-managerial positions because of five problematic assumptions embedded in the system: 1. Managers are high-level employees who perform the most complex and responsible jobs in an organization;

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2. Non-managers are low-level employees engaged in simple work of limited complexity with limited responsibilities 3. Complexity is considered uni-dimensionally as organizational complexity 4. Only managers think, whereas non-managers do 5. Responsibility is defined as formal or ultimate responsibility and not as practical or actual responsibility

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