How to identify and address pay inconsistencies through job evaluation, market benchmarking and job architecture
The EU Pay Transparency Directive is changing how organisations both within and outside of the EU think and talk about pay. EU Member States were required to bring the Directive into national law by June 2026. While the exact rules vary between countries, the overall direction is clear: employers are expected to be more open about how pay is decided.
The Directive includes requirements around:
- Sharing salary information with candidates during recruitment.
- Not asking candidates about their salary history.
- Giving employees greater access to information about pay.
- Reporting on gender pay gaps for certain organisations.
- Taking action where pay differences cannot be objectively explained.
As pay becomes more transparent, expectations are changing too. Employees and candidates, both within the EU and further afield, increasingly want to understand not just “What does this role pay?” but “Why does it pay that amount?”
This means organisations need to be able to explain how salaries have been set, why differences exist and whether people doing work of equal value are being treated fairly and consistently. Importantly, these expectations are not limited to the EU.
Why is this relevant to the UK when we are no longer in the EU?
Although UK employers are not directly bound by the EU Pay Transparency Directive, its influence is likely to extend beyond the EU. UK businesses with European operations or employees may need to meet local requirements, while greater transparency could also shape candidate and employee expectations more widely. Adopting similar principles, such as clearer salary ranges, consistent pay-setting criteria and regular analysis of pay gaps, can help organisations strengthen trust, support fair and defensible reward decisions, attract talent and prepare for the possibility of further UK regulation. The Directive therefore provides a useful benchmark for good practice, even where compliance is not mandatory.
The UK Government is already encouraging employers to be clearer about how decisions on pay and progression are made. This includes reviewing how jobs are classified, sharing how decisions about pay bands are made and providing clearer criteria for salary reviews and promotions.
Taking the opportunity to review job evaluation, salary benchmarking and job architecture now can help employers identify inconsistencies before greater transparency brings them to the attention of employees and candidates.
What happens when pay becomes visible?
Inconsistencies that may previously have gone unnoticed can quickly become more visible.
For example, greater pay transparency may uncover:
- Employees doing comparable work on significantly different salaries.
- Similar roles sitting within different grades.
- Salary bands that have not kept pace with the external market.
- Historical pay decisions that are difficult to justify today.
- Job titles that do not accurately reflect responsibilities or seniority.
- New recruits being paid more than longer-serving employees.
- Inconsistencies between departments, locations or countries.
A useful question for employers to consider is:
If every employee could see the salary range and grade for every role tomorrow, how confident would you be explaining the differences?
Why do pay inconsistencies develop in the first place?
Pay inconsistencies can emerge gradually as organisations grow, restructure, recruit and respond to changing market conditions.
They can result from:
- Counteroffers and retention decisions.
- Promotions and organisational restructuring.
- Changes in the external market.
- Acquisitions or rapid business growth.
- Inconsistent approaches to job evaluation.
- Different recruitment practices between teams.
- A lack of clear salary and grading structures.
For example, an organisation may need to offer a higher salary to attract someone with a particularly scarce skillset. Elsewhere, a long-standing employee’s role may have grown considerably without their grade or salary being reviewed.
This is why a pay difference isn’t automatically a pay problem. The important question is whether an organisation can objectively explain why that difference exists. Job evaluation, market benchmarking and job architecture each provide a different way of answering that question.
Job Evaluation: Understanding the Value of the Role
Job evaluation is a systematic process used to understand the relative value of different roles within an organisation. It focuses on the role’s duties, responsibilities and requirements, rather than the performance or characteristics of the individual carrying out the role.
Job evaluations typically consider factors such as:
- Knowledge and skills: The training, expertise and technical ability required.
- Responsibility: The level of decision-making, supervision and accountability involved.
- Effort: The mental, physical or emotional demands of the role.
- Working conditions: The environment and any particular demands or hazards associated with the work.
By applying the same evaluation methodology across roles, employers can compare jobs more objectively and identify where inconsistencies may exist. For example, two roles with very different job titles may be found to have a similar level of responsibility and organisational value yet sit within different grades or salary ranges. Equally, a role may have evolved significantly over time without its grade being reviewed. Someone who joined an organisation several years ago may now have responsibilities that are very different from those included in their original job description.
Job evaluation can bring these discrepancies to light by looking beyond job titles, individuals and historical pay decisions to assess what the role actually requires. It gives employers an evidence-based starting point for asking an important question: Are roles of comparable value being treated consistently within our organisation?
Market Benchmarking: Understanding What the Market Pays
While job evaluation helps employers understand how roles compare internally, market benchmarking looks outside the organisation to understand what similar roles are being paid elsewhere.
Market benchmarking involves comparing salaries against reliable market data for comparable roles. This helps employers understand whether their pay is competitive and, importantly, identify where inconsistencies may have developed.
For example, benchmarking may highlight:
- Roles being paid significantly above or below the market rate.
- Salary bands that have not kept pace with changes in the market.
- New employees being recruited at higher salaries than existing employees doing similar work.
- Certain departments or roles where salaries have increased more quickly than others.
- Similar roles being benchmarked differently across departments, locations or countries.
However, salary benchmarking isn’t as simple as comparing job titles. Two people with the same title can have very different levels of responsibility and job scope. Location, sector, organisation size and demand for particular skills can also influence what the market pays. This is why using relevant and reliable data is so important, employers need to make sure they are comparing like-for-like roles and understand the reasons behind any differences they uncover.
Market benchmarking also doesn’t mean organisations should automatically pay whatever the market average suggests. Instead, it provides evidence to help employers decide where they want to position themselves against the market and whether existing salaries and salary ranges continue to make sense.
When combined with job evaluation, employers can start to build a much clearer picture of pay.
Job evaluation asks: Are roles being valued consistently within our organisation?
Market benchmarking asks: Does what we’re paying make sense against the external market?
Together, they can help employers identify where pay differences are justified, and where they may need a closer look.
Job Architecture: Bringing Everything Together
Job evaluation and market benchmarking provide valuable information about individual roles and salaries, but organisations also need a clear structure that connects those roles to one another.
Job architecture provides a framework for organising roles according to factors such as job families, levels, grades and career paths. It creates a consistent structure that shows where different jobs sit within an organisation and how they relate to one another. For example, an organisation might group roles into job families such as Finance, HR, Sales, Marketing and Technology. Within each family, roles can then be organised by level, from entry-level positions through to management and senior leadership.
It can also help identify inconsistencies by showing where roles do not fit logically within the wider structure. For example, a role may be sitting at a higher level than other jobs with comparable responsibilities, or two similar roles may have been assigned to completely different grades simply because they sit within different departments.
Job architecture can therefore help organisations:
- Create consistent job families and levels.
- Clarify the difference between roles at different levels of seniority.
- Align grades and salary ranges more consistently.
- Identify duplicate, overlapping or unclear job titles.
- Establish clearer career and progression pathways.
- Apply job evaluation more consistently across the organisation.
- Make market benchmarking easier by creating clearer role definitions.
- Give employees and managers a better understanding of how roles and pay fit together.
When employees can clearly see how roles are structured and what distinguishes one level from another, they can better understand their potential career path. Managers have a clearer framework for discussing progression, and HR teams have a more consistent basis for recruitment, workforce planning and succession.
From Identifying Inconsistencies to Addressing Them
Identifying pay inconsistencies is only half the challenge. Once an issue has been found, employers need to understand why it exists and decide what, if anything, needs to change.
A useful process is:
1. Diagnose Review current roles, grades, salaries, job descriptions and structures to understand the starting point.
2. Evaluate Establish the relative size and responsibilities of roles using a consistent job evaluation methodology.
3. Benchmark Compare salaries against reliable external market data to understand how current pay compares.
4. Identify Highlight anomalies, unexplained differences and areas where the organisation may be exposed to greater risk.
5. Understand Look at the reasons behind each difference. Is it supported by the role, market conditions or another objective factor, or is it the result of a historical or inconsistent decision?
6. Prioritise Not every issue can or needs to be addressed immediately. Determine which inconsistencies present the greatest risk or require the most urgent attention.
7. Remediate Develop a realistic plan for correcting pay, grading or structural inconsistencies. Depending on the issue, this may need to happen gradually rather than through an immediate change.
8. Communicate Give managers the information and confidence they need to explain how pay and progression decisions are made.
9. Monitor Continue to review salaries, market movements, roles and internal relativities. Pay structures need to evolve alongside the organisation.
The aim isn’t necessarily to remove every difference in pay. There may be legitimate reasons why employees or roles are paid differently.
The aim is to ensure those differences can be understood, supported by evidence and objectively explained.
Henley Insights Group: How we can help
Preparing for greater pay transparency can highlight questions that organisations have not previously needed to answer.
- How do we know if our job grades and salary bands are fair and consistent?
- How can job evaluation help us identify pay inconsistencies?
- Are our salary ranges competitive with the current market?
- How can salary benchmarking help us set fair and competitive pay ranges?
- How do we identify and explain pay differences between similar roles?
- Does our job architecture provide clear and consistent job families, levels and career paths?
At Henley Research, we work with organisations to answer these questions and build a stronger foundation for fair and transparent reward decisions.
Our support includes:
- Job evaluation to establish the relative value of roles and identify potential inconsistencies.
- Salary and market benchmarking using relevant market data to understand external competitiveness.
- Pay and grading structures that provide a clearer and more consistent framework for reward decisions.
- Job architecture to create logical job families, levels, career paths and role structures.
- Pay analysis to help identify and understand inconsistencies across roles, teams and locations.
- Reward frameworks that give organisations a clearer basis for making and explaining pay decisions.
If your organisation is reviewing its approach to pay transparency, we can help you identify where inconsistencies exist and develop a practical approach to addressing them. To find out more, please get in touch with Emma Caiger: emma.caiger@henleyinsightsgroup.com