Human Resource Reward Management

1. Reward Management
•Factor Comparison Method
•Point Method
•The Hay Job Evaluation System
JOB EVALUATION

2. Factor Comparison
Method
• A scientific method designed to rank job roles
based on a breakdown of factors rather than the
role as a whole.
• The ultimate goal of factor comparison is to assign
the relative parts of each job role a financial value.
Reward Management: Factor Comparison Method

3. Factor Comparison
Method
• Breaks down a job
into a small
number of key
factors, such as
skills, effort,
knowledge,
responsibilities,
and working
conditions.
Reward Management: Factor Comparison Method

4. G AG A
M EM E

5. Effort

6. Communication Skill

7. Responsibility

8. Leadership Skill

9. Working Condition

10. Example
Reward Management: Factor Comparison Method

11. ADVANTAGES:
• The value of job is
expressed in monetary
terms.
• Can be applied to a
wide range of jobs.
• Can be applied to newly
created jobs.
Reward Management: Factor Comparison Method
DISADVANTAGES:
• Difficult to understand,
explain and operate.
• Its use of the same criteria to
asses all jobs is
questionable as jobs differ
across and within
organizations.
• Time consuming and costly.

12. Point Method
• The point method is an extension of the factor
comparison method.
• Points are assigned to each factor after
prioritizing each factor in order of importance.
Reward Management: Point Method

13. The procedure may be explained thus:
1. Select key jobs. Identify the factors common to all
the identified jobs such as skill, effort, responsibility,
among others.
2. Divide each major factor into number of subfactors.
Each subfactor is defined and expressed clearly in
the order of importance, preferably along a scale.
Reward Management: Point Method

14. The most frequent factors
employed in point systems
are:
1.Skill
2.Responsibility/
Accountability
3.Effort
Reward Management: Point Method

15. JOB FACTORS Percentage Weights Equivalent Points
I. SKILL 30 300
A. Technical Skills
B. Interpersonal Skills
C. Managerial Skills
5
10
15
50
10
150
II. EFFORT 20 200
A. Mental Effort
B. Work Pressure
15
5
150
50
III. RESPONSIBILITY 50 500
A. Impact on Operations
B. Responsibility over People
C. Responsibility over Company Assets
25
15
10
250
150
100
TOTAL 100% 1,000 pts
Reward Management: Point Method

16. ADVANTAGES:
• Forces raters to look into all key factors
and sub-factors of a job.
• Point values are assigned to all factors in
a systematic way eliminating bias at every
stage.
• The methodology contributes to a
minimum of rating errors.
DISADVANTAGES:
• It is complex
• Time consuming
Reward Management: Point Method

17. The Hay Job Evaluation
System
• It is the most sophisticated method of
evaluating jobs jobs based in the point factor
approach.
• It evaluates a JOB, not people who are
working on that specific job.
• It is not based on performance, education,
skills or current salary.
Reward Management: The Hay Job Evaluation System

18. A Hay job evaluation is
comprised of:
• the knowledge required to do
the job whether practical or
intellectual (Know HowKnow How)
• the kind of thinking required to solve the
problems which the job commonly faces
(Problem SolvingProblem Solving)
• the responsibilities assigned
(AccountabilityAccountability)
• the work environment in which the job is

19. • ‘Know How’ is defined as the "sum total of every
kind of knowledge and skill, however, acquired,
needed for acceptable job performance."
• ‘Problem Solving’ is "the amount and nature of the
thinking required in the job in the form of analyzing,
reasoning, evaluating, creating, using judgment,
forming hypotheses, drawing inferences, arriving at
conclusions, etc."
• ‘Accountability’ is "the answerability for action and
its consequences. The measured effect of the job on
end results in the organization."
• ‘Working Conditions’ assess the environment in
which the job is performed.

20. Thank You
Ana Olmedo
REWARD MANAGEMENT
>Factor Comparison Method >Point Method >The Hay