8 evaluation approaches compared: from summary ranking to high-analytical factor-based systems
EU criteria for job evaluation: skills, effort, responsibility, working conditions (Art. 4(4))
3 company scenarios: SME (100–500), large enterprise (500–5,000), global corporation (5,000+)
Cost range: from under USD 15,000 (summary, SME) to over USD 1,000,000 (analytical, global corporation)
The EU Pay Transparency Directive (2023/970) does not prescribe a specific job evaluation method. It does, however, require that pay-setting criteria be objective and gender-neutral, based on skills (qualifications), effort, responsibility and working conditions (Article 4(4)). Any method that relies solely on market pricing or historical pay data fails this test, because both can perpetuate existing discrimination. The choice of method depends on organisational size, existing pay infrastructure, budget, geographical footprint and the level of legal defensibility needed under the directive's reversed burden of proof.
This page compares the most widely used approaches globally, including established consulting methodologies and professional association frameworks from WorldatWork and SHRM.
Table 1: Job evaluation methods compared
| Method | Type | Complexity | Cost | Best suited for | Directive compliance |
|---|---|---|---|---|---|
| Analytical job evaluation (bespoke) | Analytical | High | Medium to high | Organisations needing custom criteria tailored to their industry | Very high — each factor scored individually, auditable |
| Summary (ranking/classification) | Summary | Low | Low | SMEs with fewer than 100 distinct roles | Medium — whole-job assessment without factor-level proof |
| Hay Method (Korn Ferry Hay) | Analytical | High | High | Large enterprises, multinationals, globally comparable | Very high — three factors (know-how, problem solving, accountability) |
| Mercer IPE | Analytical | Medium to high | High | Global corporations needing cross-border comparability | Very high — five factors, internationally standardised |
| Korn Ferry (beyond Hay) | Analytical | Medium to high | High | Complex matrix organisations | Very high — comprehensive factor matrix, benchmark data |
| gradar | Analytical (digital) | Medium | Medium | SMEs and mid-market, digital-first approach | High — factor-based, four EU criteria covered, SaaS platform |
| WorldatWork Total Rewards | Framework | Low to medium | Low (membership-based) | Compensation philosophy design, internal equity reviews | Indirect — conceptual model, not a scoring system |
| SHRM competency framework | Framework | Low to medium | Low (membership-based) | HR capability building, pay programme design | Indirect — guidance framework, not a job evaluation tool |
Analytical methods score each role across multiple factors and produce a defensible total. Under the directive's reversed burden of proof (Article 18), this factor-level documentation is invaluable: if a worker presents evidence of pay discrimination, the employer must prove objectivity. Summary methods, while faster, leave employers exposed because they cannot demonstrate criterion-by-criterion neutrality. WorldatWork and SHRM frameworks are useful for designing compensation strategy but are not evaluation systems — they must be paired with a scoring methodology to satisfy the directive.
Table 2: Implementation scenarios by company size
| Criterion | SME (100–500) | Large enterprise (500–5,000) | Global corporation (5,000+) |
|---|---|---|---|
| Recommended method | gradar or simplified analytical | Hay, Mercer IPE or Korn Ferry | Hay or Mercer IPE (globally unified) |
| Typical project duration | 3–6 months | 6–12 months | 12–18 months |
| External consulting needed? | Optional, platform-guided | Recommended | Essential for cross-border consistency |
| Cost estimate | USD 15,000–75,000 | USD 75,000–350,000 | USD 350,000–1,500,000+ |
| Reporting obligation (EU) | Every 3 years (100+ workers) | Annual (250+) or every 3 years (150–249) | Annual, potentially per country |
| Worker representative engagement | Works council where applicable | Works council + group-level council | European Works Council for EU-wide rollout |
For SMEs, a digital platform like gradar offers the most pragmatic path: evaluation follows the four EU criteria, results are documented and exportable, and costs remain predictable. Large enterprises and global corporations that already use Hay, Mercer or Korn Ferry typically need to audit and update their existing system for directive compliance rather than start from scratch. The key question is whether the existing methodology covers all four EU criteria and whether the factor weightings can withstand a gender-neutrality challenge.
Table 3: Directive obligation coverage by method
| Obligation (EU Directive 2023/970) | Analytical | Summary | Hay | Mercer IPE | Korn Ferry | gradar |
|---|---|---|---|---|---|---|
| Form comparator groups of equal value | Yes | Limited | Yes | Yes | Yes | Yes |
| Demonstrate gender-neutral criteria | Yes | Difficult | Yes | Yes | Yes | Yes |
| Derive salary bands | Yes | Possible | Yes | Yes | Yes | Yes |
| Generate reporting data (gap per comparator group) | Yes | Possible | Yes | Yes | Yes | Yes |
| Withstand reversed burden of proof | Strong | Weak | Strong | Strong | Strong | Medium to strong |
| Cross-border comparability | No (bespoke) | No | Yes | Yes | Yes | Limited |
The table illustrates why summary methods, while cheaper and faster, carry elevated risk under the directive. With the burden of proof reversed (Article 18), an employer relying on summary evaluation cannot produce the factor-level evidence needed to disprove discrimination. For any organisation with 150 or more workers — and therefore subject to reporting — an analytical approach is the defensible choice.
What the directive requires from the method — and what it does not
Article 4(4) defines four criteria: skills (qualifications), effort, responsibility and working conditions. The method must cover at least these four dimensions. It does not need to use a specific point scale or weighting — but it must be documented, reproducible and gender-neutral. Gender neutrality means that the weighting must not cause female-dominated roles to be systematically undervalued compared to male-dominated roles of equal overall value. In practice, weightings that over-emphasise physical demands while under-weighting care, communication or coordination responsibilities are the most common source of indirect bias.
Employers should also note that market pricing alone does not satisfy the directive. Market data reflects existing pay patterns, including discriminatory ones. The directive requires that pay criteria be objective in themselves, not merely reflective of external market rates. Market data may be used to calibrate salary bands after the internal evaluation, but it cannot replace the evaluation itself.
Frequently asked questions
Which job evaluation method is best for EU Pay Transparency Directive compliance?
The EU Pay Transparency Directive does not mandate a specific job evaluation method but requires objective, gender-neutral criteria covering skills, effort, responsibility and working conditions (Article 4(4)). Analytical methods such as Hay (Korn Ferry), Mercer IPE or Korn Ferry job evaluation satisfy this requirement most robustly because they score each criterion separately and produce an auditable trail. Summary methods are simpler but harder to defend under the directive's reversed burden of proof. For SMEs, digital platforms like gradar offer a cost-effective analytical approach. WorldatWork and SHRM frameworks provide useful conceptual models but are not evaluation systems in themselves.
What is the difference between analytical and summary job evaluation?
Analytical job evaluation breaks each role into individual factors (e.g. knowledge, responsibility, physical demands) and assigns points to each factor, producing a total score that can be objectively compared across roles. Summary (or non-analytical) evaluation ranks roles as a whole into grades without scoring individual factors. Analytical methods are more transparent and defensible in legal proceedings, which matters under the directive's reversed burden of proof (Article 18). Summary methods are faster and cheaper to implement but create higher litigation risk because employers cannot demonstrate factor-by-factor objectivity.
How do WorldatWork and SHRM frameworks relate to EU pay transparency requirements?
WorldatWork (Total Rewards framework) and SHRM (competency-based HR framework) are professional associations that publish guidance on compensation design, job architecture and pay equity. They are not job evaluation systems in the technical sense but provide conceptual models for building compensation structures. Under the EU directive, employers still need a specific evaluation methodology (Hay, Mercer, Korn Ferry, gradar or a bespoke analytical system) to score individual roles. WorldatWork and SHRM frameworks are valuable for designing the overarching compensation philosophy, training HR teams and structuring internal equity reviews, but they do not by themselves generate the comparator groups that the directive requires.