Job Level Classification (2025): Frameworks & Best Practices

Within the competitive labour market, organisations are constantly under increasing pressure to create fair, transparent, and scalable structures for career growth. Without a clear framework, businesses risk inconsistent promotions, pay inequities, and disengaged employees who struggle to see their future within the company. 

Job level classification offers a solution by providing a structured approach to defining roles, responsibilities, and progression opportunities across the organisation. When designed effectively, it becomes the foundation for equitable pay, talent mobility, and long-term workforce planning, ensuring that both employees and employers can thrive as the business evolves.

In this article, we will discuss what job level classification is and best practices, so keep on reading! 

What is job level classification?

Job level classification is the structured process of grouping roles within an organisation into defined levels based on their scope, responsibilities, and required competencies. A well-designed classification framework brings consistency to career progression, improves pay equity, and provides employees with clarity on how they can grow within the company.

The benefits include:

• Fairness and transparency – employees understand how promotions and pay decisions are made.
• Improved talent mobility – leaders can compare roles across departments.
• Stronger workforce planning – HR can align organisational design with long-term strategy.

In short, job level classification ensures people practices are consistent, equitable, and scalable as businesses grow.

Job level classification vs job levelling vs job architecture

These three terms are often used interchangeably, but they have distinct meanings:

Term	Definition	Focus	Output
Job level classification	Assigning jobs into levels (e.g. entry, mid, senior, director) based on scope and complexity.	Fair progression & pay structures	Job levels and titles
Job levelling	Establishing the criteria and competencies that distinguish one level from another.	Role expectations & capabilities	Levelling framework/matrix
Job architecture	The overarching structure that links job families, career streams, levels, and pay bands.	Organisational design & workforce planning	Career framework and job catalogue

In practice, classification slots jobs into levels, levelling defines what each level means, and architecture connects it all into a coherent system.

Career streams & levels (IC vs manager)

Most organisations use two main career streams:

• Individual contributor (IC): Focuses on expertise, problem-solving, and delivering value without direct people management.
• Manager/Leadership: Focuses on guiding teams, allocating resources, and driving strategy.

A typical framework looks like this:

IC pathway           Manager pathway

—---------------------------------------------------

IC1 – Entry          M1 – Team Lead

IC2 – Mid            M2 – Manager

IC3 – Senior         M3 – Senior Manager

IC4 – Principal      M4 – Director

IC5 – Distinguished  M5 – Executive

This dual structure ensures employees can grow without being forced into management, which supports retention and career satisfaction.

Common job levels & sample titles

While frameworks vary, most organisations align around five to seven levels:

1. Entry/Junior (IC1 / Analyst / Assistant) – learning role, limited scope.
2. Mid-level (IC2 / Specialist / Associate Manager) – independent contributor, growing responsibilities.
3. Senior (IC3 / Senior Specialist / Manager) – advanced expertise, team guidance.
4. Lead/Principal (IC4 / Lead Engineer / Director) – cross-functional influence, strategic ownership.
5. Executive (IC5 / VP / C-Suite) – enterprise-wide accountability.

Clear title alignment reduces title inflation and helps employees understand where they sit within the hierarchy.

How to build your job levelling matrix

Creating a robust levelling framework requires structured steps:

1. Define guiding principles – fairness, transparency, and consistency.
2. Identify job families – group related roles (e.g. finance, engineering, sales).
3. Set career streams – IC vs management.
4. Define level criteria – scope, complexity, impact, skills, and behaviours.
5. Create a levelling matrix – a table mapping competencies and responsibilities to each level.
6. Test with pilot roles – validate against real job descriptions.
7. Communicate and train – ensure managers and employees understand the framework.

A sample levelling matrix might show how “problem-solving” evolves from “requires close supervision” at the entry level to “drives organisational change” at the executive level.

Compensation alignment & pay transparency

Job classification must be closely aligned with compensation structures in order to ensure fairness and consistency across the organisation. Each level should have a defined salary range, allowing employees within the same level to be paid within a transparent and equitable band. 

To avoid abrupt jumps in pay between levels, it is advisable to have some degree of overlap between adjacent salary ranges, creating a smoother progression path and reducing internal inequities. 

Organisations should also carry out regular equity checks to confirm that compensation remains fair across gender, location, and other demographic factors. Introducing pay transparency, whether through publishing salary ranges or clarifying pay practices, strengthens trust and helps reduce turnover by showing employees that progression and pay decisions are based on clear, objective criteria.

According to a WorldatWork survey (2025), about 82% of U.S. organisations are either communicating, planning to communicate, or considering communicating individual pay ranges with employees. Meanwhile, 79% are doing the same with external candidates.

Executive levelling considerations

When levelling executives, organisations need to apply distinct criteria compared to individual contributors or middle managers. The breadth of responsibility becomes a primary consideration, including the number of functions, business units, or regions that an executive oversees. 

The scope of impact is another key factor, measured through revenue accountability, strategic influence, or the ability to shape market outcomes. Decision-making authority also carries significant weight, particularly in terms of the extent to which executives are empowered to shape organisational direction independently. Many organisations use weighting frameworks, with business impact often accounting for around half of the assessment, followed by leadership responsibilities and functional expertise. 

Unlike other roles, executive levelling is typically subject to review by the Board or a Remuneration Committee, ensuring that decisions align with shareholder expectations and overall corporate governance standards.

Governance & refresh cadence

A job classification system cannot remain static; it must evolve alongside the organisation. To maintain accuracy and relevance, organisations should conduct annual audits to assess whether roles continue to align with their designated levels. 

Specific triggers, such as mergers, the launch of new business lines, or periods of rapid growth, should also prompt a refresh of the framework. Oversight is best managed through councils or committees that bring together HR, business leaders, and finance representatives to govern updates and exceptions collectively. 

“Organisations can proactively categorise jobs so that pay decisions that are made about men and women are both legally defensible and fair.”  — Deborah Rupp, Scott Morris, ResearchGate article

Regular reviews also act as a safeguard against level creep, the gradual inflation of titles and classifications without any corresponding increase in scope or responsibility. By maintaining a structured cadence of review and governance, organisations ensure that their levelling system remains credible, equitable, and fit for purpose.

Best practices checklist

Building and maintaining a job level classification system requires careful planning and ongoing discipline. Use this expanded checklist to guide your framework design and governance:

• Gather broad stakeholder input – Involve HR, senior leadership, line managers, and employees early in the process to ensure buy-in and reduce resistance to change. A transparent consultation phase builds trust and creates shared ownership.
• Ensure cross-functional consistency – Apply the same levelling principles across all departments, even if job families differ. This avoids silos, minimises perceptions of unfairness, and enables smoother mobility between teams.
• Develop clear, behavioural descriptors – Go beyond abstract competencies by describing observable behaviours for each level. For example, “provides input into decisions” at mid-level vs. “sets strategic direction” at executive level. This makes the framework practical and measurable.
• Avoid title and level inflation – Anchor levels to job scope, business impact, and decision-making authority rather than tenure, retention tactics, or employee pressure. Inflated titles erode credibility and create pay equity risks.
• Align with compensation frameworks – Ensure that job levels link directly to pay bands or grades. Salary ranges should overlap slightly between levels to enable smooth progression without sudden pay jumps.
• Integrate with performance management – Levels should inform promotion criteria, development plans, and performance review rubrics. This ensures the framework becomes part of daily talent management, not just an HR document.
• Communicate clearly and often – Provide employees with plain-language guides, FAQs, and examples of how levelling works. Managers should be trained to explain levels confidently and consistently.
• Refresh regularly – Schedule periodic audits and establish triggers (e.g. new markets, M&A, or rapid growth) that prompt framework reviews. This prevents drift and ensures relevance as the business evolves.
• Create governance structures – Establish a levelling council or committee, including HR, finance, and business leaders. This group oversees exceptions, approves changes, and safeguards against inconsistent application.
• Benchmark externally – Compare your levelling and pay practices against industry standards to remain competitive and attractive to talent. Use surveys, market data, and peer networks to validate your framework.
• Document and centralise – Store job levels, criteria, and descriptors in an accessible, single source of truth. This reduces confusion, accelerates hiring, and improves decision-making.

FAQs

How many job levels should you have?
Most organisations use 5–7 levels. Fewer can oversimplify; more can create unnecessary bureaucracy.

What’s the difference between grade, band, and level?

• Level = role’s seniority (e.g. IC3).
• Band = salary grouping tied to levels.
• Grade = HR/payroll categorisation that may span multiple levels.

Can small teams adopt job architecture?
Yes. Even start-ups benefit from lightweight levelling frameworks to ensure consistency and prevent pay inequities as they scale.

How do levels support retention and career experience?
Employees stay longer when they see a clear growth path. Levels make progression transparent and prevent the frustration of opaque promotion decisions.