Glossary of common terms

Defined ranges of pay for specific roles or levels within an organisation.

The situation in which one person is treated less favourably on grounds of sex than another person is, has been or would be treated in a comparable situation.

A company’s EVP is made up of a number of elements that shape its ability to attract and retain talent. Building an equitable workplace is an essential element of creating a compelling EVP. Transparency integrated into a company’s reward strategy is a key driver of EVP.

The principle that individuals performing the same or substantially similar work (including work deemed of equal value – see below) should receive the same remuneration, regardless of gender. The focus of equal pay involves a job to job comparison, as distinct from pay equity which is a broader concept looking at systemic pay fairness across an organisation.

The basis on which a claim for equal pay may be made differs around the world. For example, in the UK, claims can be brought on a (i) like work, (ii) work rated as equivalent (i.e. under a job evaluation scheme – see below) and (iii) an equal value basis. Not all jurisdictions make this distinction in how claims can be advanced.

There is no EU level definition of work of equal value, though caselaw has extensively interpreted the concept. In general, it means work which (whilst different in nature) is determined to be of equal value in accordance with non -discriminatory, objective and gender-neutral criteria. Such criteria often include skills, effort, responsibility and working conditions, and (if appropriate) any other factors that are relevant to the specific job or position (including soft skills) and justified.

The question of whether two jobs are ultimately of equal value is one of fact to be determined by the relevant tribunal/court, often with support from an independent expert.

Factor comparison is a quantitative job evaluation method that evaluates jobs by comparing them against factors or criteria (such as skill, effort, responsibility, and working conditions). Factor comparison involves evaluating jobs on a factor-by-factor basis.

A method for determining equal value. This method breaks jobs down into factors but, instead of awarding points for each (see Points-based job evaluation system below), asks whether a comparator’s job places a greater, equal or lesser demand on the employee, with regard to each factor.

The situation in which an apparently neutral provision, criterion or practice would put persons of one sex at a particular disadvantage compared with persons of the other sex, unless that provision, criterion or practice is objectively justified on the basis of a legitimate aim, and the means of achieving that aim are appropriate and necessary.

A structured framework that defines the overall structure of jobs and careers within an organisation. It may outline job families, job levels, job titles and descriptions, role competencies and responsibilities, and career paths.

A database of all the job roles within an organisation, including information such as job titles, job descriptions, job families, job levels etc.

A qualitative method for evaluating and categorising individual jobs, systematically categorising positions into grades based on predefined criteria. Forms a part of the broader job architecture (see job architecture above). A non-analytical method of job evaluation.

Also referred to as job classification or job levelling. Determines the relative value of different jobs within an organisation, ensuring that jobs of equal value—those requiring similar skills, effort, responsibility, and working conditions — are compensated equally.

There are several different methods used by organisations to evaluate and classify jobs. They range from very structured processes based on quantitative data to more informal, less structured systems that use qualitative data. See also GEL above and points-based job evaluation system below.

Jobs are evaluated and assigned to grades/levels which can be linked to pay.

Otherwise known as ranking, one of the more simplified (non-analytical) approaches to job evaluation where positions are directly assigned or ‘slotted’ into predetermined grades or salary levels based on a quick comparison with benchmark positions.

Justification for unequal pay refers to the reasons or explanations an employer might give for paying different wages to employees who are doing similar or the same work. In many countries, unequal pay is only legal if the employer can prove that the difference is based on factor(s) other than gender, race, or other protected characteristics. In the UK, this is known as the “material factor” defence. The burden is on the employer to prove that the material factor relied on is the real reason for the difference in pay, that it is significant, and that it is not related to sex. If it relates to sex in any way (directly or indirectly) then the reason will need to be objectively justified.

Where equal pay is challenged in the courts, a detailed analysis will be undertaken, often involving the use of expert evidence. The question of whether two jobs are ultimately of equal value / the justification is made out is one of fact to be determined by the relevant tribunal/court.

Subject to strict conditions, legal privilege protects from disclosure confidential communications between a lawyer and their client.

The pay level at which half of the workers of an employer earn more and half of them earn less.

The difference between the median pay level of female and median pay level of male workers of an employer expressed as a percentage of the median pay level of male workers.

A method of job evaluation which includes job ranking, or job classification (e.g. job families / slotting).

Development of pay ranges ensuring they consider internal relativities and wider market benchmarking data.

The difference in average earnings between two groups, often based on gender, race or disability.

The process of evaluating the distribution and fairness of salaries within a defined pay band or salary range.

A process used to identify and address unjustified pay disparities among employees performing similar work.

Ensuring employees are paid fairly and equitably for performing similar work, regardless of gender, race, or other protected characteristics. The focus of pay equity is on systemic pay fairness across an organisation, whereas the focus of equal pay is on a job to job comparison between a woman and a man.

The process by which salary or wage increases, typically based on factors such as experience, performance, skill development, promotion and market adjustments.

A structured system that defines how much employees are paid based on factors like job role, experience, education, and performance.

The practice of openly sharing compensation information with employees and job candidates to promote fairness and reduce pay inequities.

A structured evaluation that helps organizations determine how prepared they are to implement transparent compensation practices in compliance with legal standards and aligned with internal equity goals.

A structured program designed to educate employees, managers, and leaders on the principles, benefits, and practices of transparent compensation.

An analytical method of job evaluation, a recommended* method of job evaluation. Points are awarded for different factors — such as experience, knowledge, initiative, physical effort, communication skills, etc — or for elements grouped under a factor heading. Factors (such as skill, effort, responsibility) are broken down into levels, with specific points allocated to each level that are then totalled into a score.

It should be noted that there a variety of ways in which a job can be divided into factors, and groups of factors, but there is also a range of approaches to determining an appropriate score for each factor. Some methods use the same number of levels (or available points) for each factor, others allow more levels for some factors, according to the nature of the job. An example of a points based job evaluation system is the Hay / Korn Ferry JE scheme.

*By guidance from the European Commission and the International Labour Office– see European Commission Report and ILO guidance.

Four equal groups of workers are divided into a quartile according to their pay levels, from the lowest to the highest.

Otherwise known as job slotting, one of the more simplified approaches to job evaluation where positions are directly assigned or ‘slotted’ into predetermined grades or salary levels based on a quick comparison with benchmark positions.

A statistical method used to determine whether differences in employee compensation can be explained by legitimate job-related factors (like experience or education), or if unexplained disparities exist (such as those based on gender or race), indicating potential pay inequity.

A structured plan that outlines how an organization will attract, motivate, and retain employees by offering a combination of financial and non-financial rewards aligned with its business goals and values.

See compensation bands above.