Getting Salary Benchmarking Right: Why Analytical Job Evaluation Is the Foundation of Fair Pay

Feb 27, 2026

Market-aligned salaries, internal fairness and transparency can only be achieved if it is clear what is actually being compared. Analytical job evaluation provides the foundation for reliable salary benchmarking – and for sustainable compensation decisions.

The Challenge of Modern Salary Benchmarking

Salary benchmarks have become a standard tool in modern HR organizations. Yet many companies experience that market comparisons lead to inconsistent results: similar roles are paid differently, salary ranges appear arbitrary, and discussions about “fairness” intensify.

The issue often lies not with the benchmark itself, but with the lack of a structural foundation. Salaries can only be meaningfully compared when the value of a role within the organization is clearly defined. This is exactly where analytical job evaluation comes into play.

Why Salary Benchmarking Reaches Its Limits Without Job Evaluation

Many organizations benchmark salaries based on job titles, reporting lines or historically grown structures. However, these criteria are neither objective nor consistent.
Typical challenges include:
  • Identical job titles with very different requirements
  • Different titles for roles that are essentially equivalent
  • Local exceptions without a company-wide logic
As a result, salary benchmarks lose credibility, compensation decisions become difficult to explain, and long-term costs increase.

What Is Analytical Job Evaluation?

Analytical job evaluation is a standardized approach used to assess roles based on their actual requirements. The goal is to determine the relative value of each role within the organization – independently of the individual in the role, existing titles or reporting structures.
Key characteristics of analytical job evaluation include:
  • Assessment of a role’s relative value within the organization
  • Analysis of the concrete requirements of the role
  • Grouping of comparable roles into standardized levels or grades
  • A clear focus on the role itself, not the job holder
This creates transparency and comparability across functions and organizational units.

Which Criteria Are Used to Evaluate Roles?

Analytical job evaluation is based on objective and gender-neutral criteria that reflect the true demands of a role.
These typically include:
  • Qualifications and professional knowledge
  • Experience and complexity of problem-solving
  • Responsibility, both functional and organizational
  • Required competencies and collaboration skills
Using these criteria allows organizations to compare roles fairly, regardless of hierarchy, department or location.

From Job Evaluation to Salary Benchmarking

Only once internal job value is clearly defined does external salary benchmarking become truly meaningful. Instead of comparing job titles, organizations can link internal value to market data in a structured way.
A typical process includes:
  1. Evaluating roles using consistent criteria
  2. Assigning roles to grades with comparable value
  3. Matching these grades with external salary surveys
  4. Deriving market-aligned salary ranges
This shifts the focus from title-to-title comparisons to value-to-market pricing.

More Than a Pay Comparison: Strategic Value for HR and Management

A robust analytical job evaluation framework goes far beyond salary benchmarking. It provides the foundation for consistent compensation structures, transparent pay decisions and constructive discussions with leaders.
Additional benefits include:
  • Greater transparency and internal fairness
  • Improved control over compensation costs
  • Readiness for increasing regulatory requirements
  • Stronger trust and acceptance among employees
In a context of growing pay transparency expectations, a clear job architecture is becoming essential.

Conclusion: Benchmarking Needs Structure

Salary benchmarking is not an end in itself. Its real value emerges only when it is built on a clear, objective job architecture. Analytical job evaluation forms this foundation – making compensation comparable, explainable and strategically manageable.

If you want to understand how your company stacks up in the market, explore my salary benchmarking and compensation consulting approach.

I’ll help you make your compensation system fit for 2026 — strategic, competitive, and compliant.

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Source: gradar webinar “Job Architecture as the Foundation – The Path to Pay Transparency”

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