Classification and Compensation Unit, Division of Human Resources, West Virginia University

Point Factors and Job Evaluation

So what is a point factor method of job evaluation?

The job evaluation system used by all institutions under the WV Higher Education Policy Commission
(HEPC) is a point factor system that was implemented in 1994. It was developed by the Mercer company
and thus is often commonly referred to, though inaccurately, as the Mercer system. A point factor system
is intended to put structure to a job or job class's value or relative pay worth, from that particular
organization or employer's point of view. Point factor systems do not evaluate PEOPLE; they evaluate
POSITIONS.

Point factors are also called “compensable factors.” A compensable factor is any particular skill,
responsibility, effort or physical demand for which an employer is willing to pay an employee. Typically an
employer’s compensable factors encompass four major categories:

1. Skill
o Experience
o Education/Training
o Ability
2. Responsibility
o Supervisory
o Fiscal
3. Effort
o Mental
o Physical
4. Working conditions
o Location
o Hazards
o Physical demands
o Extremes in environment

Thus point factor systems are typically attuned to an employer's vision, mission and culture; and an
organization/employer must first know what they want to pay for in the work they will ask their employees
to perform, or what attributes they value most, so that they can set their compensation rates. Sounds
simple, but it can get complex. For example, in any point factor system, knowledge/education is usually a
heavily weighted factor. To those who employ workers in higher education services, education or training
would naturally be an important attribute to reward in a compensation system; and indeed HEPC chose
knowledge (education) as one of their compensable factors, or attributes they wanted to pay for, in the
HEPC Mercer system, and they gave it heavy weighting. HEPC chose a total of 13 point factors as the
basis for establishing the pay of their employees:

Knowledge (skill)
Experience (skill)
Complexity (effort)
Freedom of Action (responsibility)
Scope and Effect (responsibility)
Breadth of Responsibility (responsibility)
Intrasystems Contacts (effort)
External Contacts (effort)
Direct Supervision Exercised (responsibility)
Indirect Supervision Exercised (responsibility)
Physical Coordination (skill)
Working Conditions (working conditions)
Physical Demands (working conditions)
HEPC chose factors in all four categories of compensation categories, as is noted above. And while
HEPC’s system recognizes and assigns points for 13 factors, some employers use only 4, or 5, or 7.
There is no “correct” number. The compensable factors other employers choose will be based on the
total number of attributes they want to reward or pay for; and these will likely be quite closely tied to their
own particular type of work, or culture, or mission. So while HEPC heavily values and weights knowledge
(education and training), because education is their business, a correctional facility or prison might give
far more weight to their factor of physical demands and working conditions, because their staff will work
under potentially dangerous situations. A call center would likely choose and heavily weight external
contacts, because they want their employees to have good skills in customer and public service. And a
retail store will highly value and compensate for a manager’s skills, or the compensable factor of,
supervising a large staff.

An employer must also determine the relative weights of each point factor for the organization. For most
employers, factors are weighted according to their significance to the organization, and this allows the
pay system to be linked, as has been noted, to the organization’s strategy or mission. The HEPC system
weight percentages are:

Knowledge (skill) 13%

Experience (skill) 12%
Complexity (effort) 13%
Freedom of Action (responsibility) 12%
Scope and Effect (responsibility) 11%
Breadth of Responsibility (responsibility) 5%
Intrasystems Contacts (effort) 8%
External Contacts (effort) 7%
Direct Supervision Exercised (responsibility) 7%
Indirect Supervision Exercised (responsibility) 5%
Physical Coordination (skill) 4%
Working Conditions (working conditions)
Physical Demands (working conditions) 3% (these are totaled together in the evaluation system)

Having established compensable factors and their relative weights (value), the employer must then
determine the basis for awarding points. In the HEPC’s first factor, Knowledge, HEPC lists the various
levels of education and training and awards increasing points to them: Fewer points for jobs that require
a grade school or high school diploma, more points for a BS/BA, even more points for a Master's degree.
For the second factor, work experience, a job that requires no experience gets the fewest number of
points, and so on up to the highest number of years of work experience required, which will receive the
most "points." (See Appendix A for HEPC’s points and point ranges.) The points get established for each
factor, based on set parameters, levels or degrees. Each job is rated on each factor, (using a PIQ or,
preferably, a generic job description that describes the work of all similar jobs), and then all factor points
are added up to form a total point score for the job. Jobs are then grouped by total point score and
assigned to paygrades so that similarly rated jobs would be placed in the same paygrade, even if the jobs
are diverse in the types of work assigned or responsibility held. For example, a Program Assistant II, a
Trades Specialist I, a Web Assistant and a Financial Aid Assistant III are all in HEPC’s paygrade 13.

And how is the pay schedule and pay ranges established? The employer must tie this to their fiscal
strategy and budgets. Most point factor systems tie their paygrades to salary market data. Market data is
not a “one size fits all” consideration. Markets can be local, regional or national, depending upon the job
itself: higher education recruits nationally and internationally for faculty, but locally for Campus Service
Workers and Food Service Assistants; or it can be based on supply and demand: information technology
specialists and registered nurses may command higher salaries than other jobs if there are more jobs
than there are applicants; or it can be based on the cost of living in a certain area: the Washington, DC,
and northern Virginia area have historically recorded higher housing and other costs than other regions of
the United States.

The salary schedule in effect for higher education classified staff under the HEPC was created by the
Mercer consultants. It is in statute, and most of the rules governing how employees advance in paygrade
and step are also in State Code or in HEPC legislative rule.

Contact the HR Class and Comp team at classcomp-hr@mail.wvu.edu or at 304.293.5700, x. 6 if you

have further questions.