Job Evaluation (Point-Factor Method)

Theory & origin

Point-factor job evaluation was formalized in the 1920s through the 1940s and later commercialized by firms like Hay (now Korn Ferry) and Mercer. It sizes the job, not the person, by scoring defined compensable factors, weighting them, and banding the totals into grades. That turns a political argument about pay into a defensible, repeatable method. Its authority rests entirely on the quality of the factor definitions and the discipline of the calibration committee.

Key components

The parts of the model and what each one means, in plain terms.

Compensable factors

The things the organization values and pays for, typically knowledge and skills, problem solving, accountability, interaction, and working conditions. Vendor methods like Hay/Korn Ferry and Mercer IPE each have their own proprietary factor sets.

Factor weights

How much each factor contributes to overall job size, for example knowledge at 30%. The weights encode what the organization pays for, disguised as arithmetic.

Degrees

Each factor gets 4 to 6 defined levels with written anchors, so two evaluators rate the same job the same way.

Evaluation committee

A trained, cross-functional group that rates benchmark job descriptions (the role as designed, not the current incumbent's performance) against the anchors.

Grades

Point totals grouped into bands, and bands mapped to salary ranges through market pricing. The banding decisions drive both cost and fairness.

How a consultant runs it

1. 01 Select or license a factor set and agree on weights with leadership. The weights encode what the organization actually pays for, which is a values decision in disguise.
2. 02 Write behavioral degree anchors so two evaluators score the same job the same way.
3. 03 Convene a trained, cross-functional committee and evaluate benchmark job descriptions, the role as designed, not the current person in it.
4. 04 Band the point totals into grades and market-price the grades into salary ranges.
5. 05 Guard the method against manager lobbying, and calibrate across job families so you do not re-import the inequity you set out to fix.

Worked example

Common pitfalls

1. 01 Evaluating the incumbent instead of the job description
2. 02 Letting managers lobby the committee. Governance is the whole method.
3. 03 Skipping calibration across job families, which recreates the inequity you started with

Sample deliverable

One real engagement, start to finish. Watch the numbers travel from raw input, onto the chart, into the finished artifact.