What is job classification?

Job classification determines which job category and salary band an employee belongs to. Classification is typically based on the value of the role rather than on the employee’s personal characteristics.

The purpose of a job classification system is to enable organisations to define the position of individual roles within the corporate structure according to consistent criteria. This creates the basis for consistent and justifiable compensation decisions.

Why is job classification important?

In a pay-transparent system, classification principles are predefined, documented and applied consistently to all employees. This is particularly important in reducing the risk of discrimination.

A well-designed classification system helps ensure that compensation decisions are not based on individual negotiations or informal considerations, but on objective and consistently applied criteria.

How does it relate to pay transparency?

One of the key requirements of a pay-transparent system is that organisations clearly define which roles belong to which categories and salary bands. Without this, comparability and justifiable compensation decisions are difficult to ensure.

Job classification is therefore closely linked to job structure, salary bands and objective compensation criteria.

Official definition

Job classification determines which job category and salary band an employee belongs to, typically based on the value of the role.

Frequently asked questions

What does job classification mean in practice?
It determines which job category and salary band an employee belongs to.

What is job classification based on?
Typically on the value of the role, the level of responsibility and the position’s role within the organisation.

Why is a documented classification system important?
Because it supports consistent compensation practices and may reduce the risk of discrimination.

Back to the glossary