Compversation #22 – How Do You Weigh the Value of a Job?

Equal pay for equal work and work of equal value!

It’s the founding principle of pay equity. Almost a cliché that guarantees, amongst other things, gender equality. But it’s nothing new — the International Labour Organisation (ILO) enshrined it in the Equal Remuneration Convention of 1951, and many countries have since integrated it into national law.

Yet, more than 70 years later, pay inequality persists as an ongoing challenge for HR teams as they grapple with the issue of legal liability for employers. In particular, with the upcoming transposition of the new European Directive into law, the question of job equivalence will become increasingly complex. For example, how can we correctly assess the value of a job? What defines a group of roles of equal value? 

And although Directive 2023/970 focuses on pay transparency, it inevitably shines a light on other HR processes. 

You see, pay isn’t an isolated HR silo; it’s the result of all the others. Therefore, pay transparency has a ripple effect on everything else. 

This mini-series of newsletters explores this phenomenon further, showing how performance, skills, and even potential assessments might be affected by transparency. For the final issue of the series, we’ll look at the cornerstone of pay equity: job classification.

A significant entry cost 

It’s hard to achieve internal pay equity without a formal job classification system. Job evaluation and categorisation form the foundation for most structured pay frameworks. Job categorisation, coupled with each company’s pay policy, normally serves as the foundation for constructing a salary framework. 

This doesn’t necessarily mean all employees within the same job category will receive the exact same pay. Other criteria may help position them within their pay range, as long as it’s objective, measurable, and non-discriminatory. At least, that’s what the European Directive requires to come into force by June 2026.

However, in practice, I’ve found that a number of companies, particularly smaller ones, do not rely on a robust job evaluation methodology that could serve as the foundation for a European-level pay framework.

The problem is that the European Directive applies to all companies with 100+ employees. In some countries (like France, or Sweden), it’s likely that mandatory reporting and other obligations will extend to those with 50+ employees. This leaves companies that don’t have a solid methodology in a particularly vulnerable position. 

Much like setting up a skills framework, it’s easy for job evaluation to quickly turn into a red tape nightmare. This is especially true for smaller companies without the means to tackle such projects alone. Larger organisations often call on specialised consulting firms that apply their own scoring methods (the Hay method is one of the best-known) to assign points to each role based on various criteria, then categorise them according to their total score.

But how will companies without the means to hire these consultants prepare for pay transparency?

The Directive states, in Article 4, paragraph 2, that Member States must provide tools or analytical methods to support and guide the evaluation and comparison of the value of work according to the criteria set out in that article. What will national law provide? What will these tools and methods look like?

That’s a question I find fascinating. If you’re thinking about it too, I’d love to talk.

What the European Directive changes 

Does this mean that companies with an existing job evaluation methodology are ready for the era of transparency?

Not necessarily. The Directive gives the system a real shake-up. In particular, Article 4 — “Same work and work of equal value” specifies the criteria that companies must take into account when defining their job categories.

These criteria must be objective, non-gender-biased, and include:

• Skills
• Effort
• Responsibilities
• Working conditions

During one of the last webinar organised by Figures, I had the opportunity to discuss this with Ludovic Wolff, Director of Rewards & Employee Share Plan at Alixio. Ludovic helps companies prepare for the implementation of the new transparency laws. He believes it’s important to examine existing job classification systems and see how the Directive’s criteria are reflected in them — and to check the chosen methodology aligns with the Directive’s requirements.

He adds, however, that while these criteria are mandatory for all companies, they can be weighted freely according to each company’s pay policy. Additional criteria can also be added, provided they’re objective and gender-neutral.

To avoid large and unjustified discrepancies, companies may need to go beyond their current classification systems to avoid lumping too many jobs into a single broad category. Using the Directive’s criteria could lead to greater granularity. In short, no pay gap should remain unjustified.

Pulling the thread, again and again

The Directive also gives employees the right to know how their pay compares to their colleagues doing the same or equivalent work. Many employers will respond by comparing an employee’s pay to others at the same job grade.

The first direct consequence: companies will need to communicate employees’ job levels or grades to them.

That’s not trivial! Personally, I never knew my job grade during my early years in large companies. Like the vast majority of employees, in fact. Opacity in the area of pay is often the norm. That’s about to change, and fast.

And that’s not all. Employees won’t have to stop there; they’ll be able to ask why they were placed in a certain category. Why, for instance, would a Communications Director be at the same level as an Engineering Manager?

It’s not only employees who will be asking these questions.

In the recent decree from the Fédération Wallonie-Bruxelles, which transposes the Directive into Belgian law, all employers must have their job classification methodology validated by employee representatives. I’d wager that a similar requirement will appear in the transposition of the Directive across other countries, too. For some companies, that might feel like opening Pandora’s box.

One might even ask whether job evaluation systems themselves recreate gender bias: do we tend to overvalue highly technical roles, for example? Such roles are more often held by men, for social and educational reasons that go far beyond company walls. A recent study shows, for example, that girls begin to disengage from scientific subjects as early as their first year of primary school.

Does this overvaluation of technical skills contribute to structural pay inequality between men and women? If jobs requiring technical skills are overvalued, and therefore classified higher, the associated salary bands will automatically be higher than those for less technical roles.

Can companies act, at their level, to correct this bias? In any case, it’s not a question they’ll be able to ignore. For example, in 2010, a court ruling in France confirmed pay equality between an HR Director and a Finance Director.

In 2024, the European Directive explicitly states that “relevant non-technical skills shall not be undervalued” (Article 4, paragraph 4). It’s a clear attempt to offset the horizontal occupational segregation that can push women into less technical fields.

But if we move towards internal equity that erases pay differences between more and less technical jobs, how do we reconcile that with the reality of a market that still makes such distinctions?

Let’s return to the example mentioned earlier: according to Figures’ data, an HR Manager earns less than a Finance Manager. What will companies choose to do? Reflect the market reality, even if it’s biased, or realign pay internally for roles deemed equivalent in value?

That’s what I find particularly fascinating about pay: every question we ask leads us to keep pulling the thread. Soon, we’ll face questions that go beyond our HR roles or even our companies, and start touching society as a whole.

Personally, I’m deeply interested in this issue of horizontal occupational segregation and the valuation of feminised jobs.

I’d love to dedicate a whole newsletter to it. Let me know if you’d be interested, and if you’d like to discuss it directly, my inbox is always open!

To continue the conversation

A selection of materials to deepen the reflection. Feel free to send me articles you’ve found interesting!

Pay Transparency and the Role of Gender-Neutral Job Evaluation and Job Classification in the Public Services — European Public Service Union & European Trade Union Institute

This comprehensive study explains how gender-neutral job evaluation systems can identify and correct structural bias in job classification. This is a core step towards ensuring equal pay for work of equal value.

Promoting Pay Equity: Job Evaluation Models and Impacts — International Labour Organisation (ILO)

A global analysis of how job evaluation methods are used to determine when different roles deliver equal value, featuring case studies of national equal pay initiatives and practical frameworks for employers.

Job Analysis and Job Classification for Addressing Pay Inequality in Organisations — Cambridge University Press

A research-based look at how organisations can modernise their job analysis and classification systems to make pay decisions more transparent, defensible, and aligned with evolving equality laws.