National laws implementing the EU Pay Transparency Directive are taking effect across the EU, and employers must make sure there are no unjustified pay gaps in their own organisation. Employers must be able to identify who in the organisation does work of equal value. That requires grouping employees into comparable groups based on the demands of the work – not just comparing job titles.
In this article:
- Work of equal value doesn’t just mean the same work
- Work of equal value is based on job grading
- Which objective criteria are allowed for assessing job demands?
- Is your organisation’s job evaluation up to date?
- Job evaluation is a continuous process
- Don’t do the grading manually
Also read what every employer should know about the EU Pay Transparency Directive!
Work of equal value doesn’t just mean the same work
When the Pay Transparency Directive talks about work of equal value, it does not only mean the same work. This is not just about titles or job names, but about what kind of work is of equal value when assessed against objective criteria.
Two jobs can be completely different and still be of equal value when assessed against objective criteria. For example, an accountant and an IT support specialist do different work, but their jobs can be at the same level in terms of workload, working conditions and responsibility.
So, as a starting point, there must be no unjustified pay gaps within the same organisation, even across departments, when people do work of equal value. Work of equal value is typically defined through job grading, unless the organisation has a justified reason to assess job demands using some other definition – for example, based on work location.
Work of equal value is based on job grading
Work of equal value is typically defined by job grade, assessed against objective criteria such as level of responsibility and workload. Sometimes it can be justified for an organisation to define work of equal value using groups refined on some other basis. For example, it may be justified to separate employees working in different locations or business areas if their conditions clearly differ. It is important that the definition itself is genuinely well justified and that it is clear why the organisation chose this grouping.
Which objective criteria are allowed?
The directive requires pay and the assessment of job demands to be based on objective, gender-neutral criteria. It is not entirely straightforward, though, which criteria are truly neutral and acceptable under the directive. Many HR departments and employers are currently working out which criteria are the right, directive-compliant ones to use. What if the organisation’s criteria indirectly favour men? Roles typically held by men may clearly recognise the physical strain of the work, while roles dominated by women may not recognise mental strain in the same way. These criteria now need attention, and organisations need clear assessment models that place jobs in groups of the same level when viewed objectively.
Typical, clear and accepted objective criteria include workload (physical and mental), responsibility and working conditions, as well as, where needed, other objective and gender-neutral factors relevant to the job in question.
Objective criteria accepted under the Pay Transparency Directive include, for example:
- Level of responsibility
- Skills
- Working conditions
- Workload (physical and mental)
Is your organisation’s job evaluation up to date?
The Pay Transparency Directive gives employers a welcome push to review the criteria used to define job demands in their organisation. If your job evaluation is out of date, the task can feel daunting. Cleaning up existing data and cross-comparing different job grades can be a huge job. How do you report accurately to the authorities when needed if your starting point is a mess?
Job evaluation is a continuous process
Defining work of equal value is not a one-off project but a continuous process, and that is how it should be approached. The Pay Transparency Directive is the starting signal for getting things in order, and it lays a good foundation for work that is updated continuously. When the company hires people into new roles or roles change, the job evaluation needs updating too.
Don’t do the grading manually
In a large organisation with a huge number of different jobs, comparing job demands is a big task. Neither a person nor an Excel spreadsheet can sensibly handle comparing, say, 150 different jobs against each other. Fortunately, you don’t have to do it manually – and you shouldn’t. Especially for large organisations, finding the right tools to support the work is essential.
Evenpay is a software solution designed to support compensation and sound pay structures over the long term. It gives employers good tools to meet the obligations of the Pay Transparency Directive and at the same time creates an excellent foundation for managing and developing the company’s pay culture over time. You can set up clear frameworks for evaluating and grading jobs that are easy to update and develop over time. Evenpay also works for international organisations and can be tailored so that the system automatically takes into account each country’s legislation and the country-specific details of the Pay Transparency Directive. Automating processes makes even a big task easier, especially in large organisations.
We have partnered with several local and European providers who also offer project and consulting support for building job grading and job architecture. So don’t hesitate to ask for help with this work too.
Want to hear more about Evenpay? Book a free 30-minute demo and we’ll go through together how Evenpay could serve your organisation!
