March 2018

A great global job leveling program is the foundation for creating a compelling, fair and marketoriented approach to managing your talent for optimal business results.
Organizational structure and design affects every aspect of a business, including talent mobility, compensation
programs and even the speed of innovation. Building or refining job leveling structures to meet the growing andchanging demands of your business will result in better communication with your employees, more clearly definedcareer paths, and salary structures with greater market alignment and internal equity.
Radford’s globally consistent approach to job leveling provides companies with the flexibility they need to meetthe many nuances of workforce, rewards and regulatory practices in regional markets, while also providing afoundational structure to scale for growth and maintain a globally connected rewards system.
There are several compelling reasons why companies should take time now to evaluate their global job levelingstructures, including:Hyper-growth leads to workforce expansion and diversification: When your headcount grows fast, it
quickly becomes imperative for companies to not only understand how each new job they add fits into
existing systems, but also to assess the similarities and differences between job roles and underlying skill
sets as the business changes.



Rapid industry convergence: Companies are constantly crossing into adjacent industries. What wasonce considered purely an automotive company, for example, is often also a software company today. As
such, non-traditional technology companies that are hiring employees with new types of technical skills
are revisiting their job architecture and leveling structures to ensure they are categorizing new jobs andtargeting the talent market in a way that reflects the hiring and growth priorities of the organization.

Internal pay equity: Creating fair and transparent job leveling structures ensures salary structures reflectmarket pay and allow a company to spot pay inequities that might have remained hidden. With eachpassing year, legislative and societal pressure is mounting to make pay fairness for all a priority.

Rising M&A activity: Many companies revisit their leveling structures following a major transaction as away to integrate workforces; however, a growing number of companies are seeing the benefits of having
an effective leveling structure in place to prepare for M&A before a deal is signed.

Figure 1 illustrates how job leveling systems can address a number of common business concerns:
Figure 1

How a Global Job Leveling System Addresses Common Business Concerns
Business Concerns

Job Leveling Solutions

Business Results

Poor transparency regarding
job requirements and career
progressionInconsistent approach to pay
decisions for new hires,promotions and annual
increases

Clear communication of job
requirements, promotional
opportunities and development
requirementsStructure that provides
guidelines to ensure equal pay
for equal or substantiallysimilar workConsistent, unbiased andmarket-oriented compensation
decisions to attract and retain
talent

Uncertainty about appropriate
pay differentiation, particularly
for similar roles withcomparable skillsCreate job descriptions foreach job family with career
matrices defining progression
at each job level— both withthe job family and laterally
across job families or functions
Benchmark market pay foreach job and aggregate forsimilar job families at the samejob level into functional payranges

The business challenges outlined in Figure 1 are even more prominent in the high-growth technology and life
sciences sectors, where companies live and die based on their ability to innovate. In light of this dynamic, over thepast several years, we’ve seen a steady shift away from highly regimented job leveling models.
Increasingly, human resources and talent leaders want job leveling tools that have enough built-in flexibility tohandle cultural differences, local and regional regulations, diverse business needs and changing talentrequirements. A recent survey by our consulting practice found that 20% of responding companies revaluated orredesigned their job leveling architecture in the preceding 12 months, and another 30% of respondents said they
were prioritizing updates in the year ahead. At Radford, our global leveling approach, which is integrated into theglobal architecture of our surveys, meets these requirements.

Incorporating Salary Structures into Global Leveling Systems
Large, global enterprises need a job leveling structure that not only provides flexibility for the unique
circumstances of different countries and regions (as explained in more detail in this article) but is also compatible
between different markets. The same is true for using job leveling structures as a starting point to create salarystructures. Figure 2 illustrates how a globally consistent job architecture system, based on career levels, can bealigned to sample global salary range midpoints. Remember, salary ranges can be specific to every geographic
region where you operate, and they can also be broadly attached to job function or more refined around specificjob families. Even when companies align all of their salary ranges to a single global leveling system, they retain
the flexibility to more or less granular in setting specific pay ranges.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge

2Figure 2

How Global Job Leveling System Applies to Diverse Salary Ranges Across Countries
Global Leveling System
GlobalGrade

Mgmt.

11Sr. Director

10Director

9SupportJapan

Prod Dev.
EngineerBusiness
Functions

Manuf.
Ops

Prod Dev.
EngineerBusiness
Functions

Manuf.
Ops

185,000

180,000

175,000

17,370,000

17,850,000

16,890,000

Principal

155,000

145,000

136,000

13,850,000

14,800,000

12,990,000

Sr. Manager

Expert135,000

125,000

116,000

11,250,000

12,150,000

10,440,000

8Manager

Advanced

110,000

105,000

100,000

9,120,000

9,550,000

8,690,000

7Supervisor

Career

94,00080,00068,0006,300,000

7,400,000

5,360,000

6Supervisor

Developing

Specialist

79,00065,00053,0005,060,000

6,150,000

4,130,000

Entry

Skilled63,00055,00048,0004,370,000

5,000,000

3,810,000

4Intermediate

54,00046,00039,0003,830,000

4,500,000

3,250,000

3

Entry

45,00036,00029,0002,920,000

3,650,000

2,350,000

35,00029,00024,0002,690,000

3,250,000

2,230,000

5Prof.

United States

2

In our illustrative example above, engineering is shown to be the highest paid function in the United States.
However, in Japan, business function roles at the same grade as engineers and product developers are generally
higher paid. Having business functions fit into the same job grades across markets provides consistency but it
doesn’t prohibit companies from putting business functions into different salary ranges for different markets.

The Radford Approach
Our approach to job leveling includes creating a structure that has articulated career paths for various job familiesthat can support a global organization. However, this system is underpinned by job architecture, which is amethod of organizing jobs into job codes, job titles and functional areas, all before assigning a grade level. Figure
3 shows the relationship between job leveling and job architecture— both of which are critical to creating a solid
foundation for career path mobility and highly effective salary structures.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge3

Figure 3

Job Architecture vs. Job Leveling
Employees

Jobs

Job FamiliesJob Architecture:
Jobs are organized
into commongroups, using an
infrastructure of job
codes, titles,
families andfunctions

Function
Field
Mktg.

Digital& Web

CommsCorp.
Mktg.

GroupMarketing

Job Families
Job Leveling:
Jobs are organizedfrom least to mostcomplex and basedon how career
categories relate to
one anotherCareer Track

Radford Level

Job Level

Principal (P6)6

Expert (P5)5

Advanced (P4)4

ProfessionalCareer (P3)3

SupportDeveloping

2

ExecutiveManagement(P2)

Entry (P1)

1

It's important to remember that job leveling systems are helpful for many types of companies— from publiclytraded multinationals to smaller, private companies seeking a flexible foundation upon which to grow. Embedding
a common language for job leveling and career mapping into the culture of a company at an early stage can havelong-lasting benefits.
Finally, it's imperative that any approach to job leveling include enough elasticity in the system so that it can be
tailored to meet the demands of different companies and different markets. In the next section of this paper, we
describe how Radford's approach can be customized for companies operating in Asia, Europe and the UnitedStates.

Applications in Asia
The dynamic business environment across Asia produces a high degree of regional differentiation, which makes
tailoring job leveling to the unique needs of every market where you operate even more important. For example,
China and India are beginning to show more prominent pay premiums for technical job roles, much like the US,
while Japan and Korea seem to show a technical premium only at upper management levels, not at entry levels.
It’s important to take these types of differences into consideration when developing global leveling structures. Forexample, we would recommend keeping technical and non-technical job roles separate for salary range
development if you operate in multiple countries where premiums don’t follow the same patterns.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge4Another nuance about the Asian market: companies operating in the region often prefer to include what we call"tweener grades" into their job leveling models. These grades are intermediate steps within a global career levelthat have their own specific base salary or fixed compensation ranges. This allows for more frequent performance
reviews and pay adjustments. This type of approach is sometimes used in China and India where the jump in pay
from one official job level to the next is steep, and the promotional velocity for lower-level employees is typically
expected to be rapid.
Figure 4 illustrates how tweener grades can be developed specifically for Asia within the context of a larger global
leveling system.
Figure 4Sample “Tweener Grade” within a Global Job Leveling SystemthGlobalGradeRadford JobLevelLower End:th25 Percentile

Midpoint: 50Percentile

Upper End:
th75 Percentile

Midpoint toMidpoint

Range
Spread10

P6 – Principal

4,050,000

5,400,000

6,750,000

50%

67%

9

P5 - Expert

2,700,000

3,600,000

4,500,000

50%

67%

8

P4 – Advanced

1,800,000

2,400,000

3,000,000

41%

67%

7

P3 – Career

1,275,000

1,700,000

2,125,000

31%

67%

6

P2 – Developing

975,000

1,300,000

1,625,000

86%

67%

5

P1 – Entry

420,000

700,000

980,000

N/A

133%

1,300,0001

1,462,500

1,625,000

30%

25%

975,000

1,121,250

1,300,000

N/A

33%

6aP2 - Developing
6bIn Figure 4, Grade 6 is subdivided into two tweener grades, 6a and 6b, in order to accommodate more frequent
performance assessments. The overall fixed compensation range remains the same; however, additional pay
ranges now exist within this span.
We also need to be aware of markets where management talent may be paid a premium over what we typicallyview as comparable individual contributor positions in a dual career ladder global structure. Where this is a factor,
separate market-based pay ranges can be created for management and individual contributor positions that stillremain in the same global grade for purposes of internal pay equity and global consistency.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge

5Applications in Europe
Analytical forms of job evaluation, such as the point-factor approach, continue to dominate the landscape in many
European countries due to the regulatory environment, which requires pay equity compliance in collective labor
agreements. However, European companies as a whole are starting to consider different approaches thatfacilitate more dynamic organizational design with the capacity to adapt pay and talent practices to more readily
respond to today’s so-called VUCA (Volatile, Uncertain, Complex, Ambiguous) market demands.
However, driving this type of change has hurdles, and HR leaders need to be aware of the many steps that might
be involved in migrating to a globally consistent leveling structure. Some European countries, such as Germany
and Austria, have a strongly regulated labor force. In Germany, there is a strong level of influence from employee
representatives (often in the form of “Works Councils”), which require a proportion of the seats of the supervisoryboard to represent the workforce. If a company wants to implement a new grading or leveling approach, theWorks Council must approve the changes and be involved in the decision-making process. While therepresentative body doesn't have legal authority over determining the size of salaries, it does have a voice in theoverarching approach that underpins compensation decisions.
Insights from recent client engagements suggest a shift in thinking is underway among both management andemployee leaders across Europe with regards to the type of job leveling framework that can provide the essential
backbone or common operating language to support the implementation of more agile and dynamic peopleprocesses. With career development and perceptions of fairness frequently ranked at the top of employee
engagement goals for both employees and companies, the most effective job leveling models need to embed anorganization’s desired culture and evolve beyond simply serving as defensible frameworks for pay equity.

Applications in the United States
Dual career ladders, where managers and individual contributors progress up the ranks in similar organizational
levels, are much more common at technology and life sciences companies in the US. Employees who havetechnical or scientific skills are no longer required, or even encouraged, to pursue management roles in an
attempt to further their careers if that's not their desired career path or they lack managerial skills. Companies
have recognized the value of keeping experts focused on what they do best.
Radford's global leveling approach recognizes this organizational reality by aligning job levels with both theinternal value companies place on individual contributor positions relative to managerial positions, as well as thevalue the market places on each type of job. The system combines individual contributors and managers intoglobal grades where market pay suggests equivalence. Figure 5 is an example of how different job families are
graded and grouped into two tracks, one for management and one for individual contributors.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge

6Figure 5

An increasing number of companies in the US are also using global leveling systems as a way to determine
eligibility for all types of rewards programs, not just for setting base salary levels. Global levels can be used todetermine a position's eligibility for short- or long-term incentives, bonus targets and equity grant guidelines. Whileregional differences in pay levels exist, the global leveling system enables a company to be consistent in its
determination of program eligibility by considering the internal equity of the positions in a given grade and thenletting market practices dictate actual compensation levels.

Next Steps
Around the world, more companies are taking a critical review of their job architecture and leveling approach toensure the core elements of these systems support employee mobility, career development, enterprise-widesystem implementations, transparency and accountability. When designed correctly, job leveling greatly simplifies
how global workforces are organized and managed by introducing a common grading language across all
employees and functions, while still differentiating for performance and specific market realities. Job leveling also
creates an infrastructure that is easier to maintain as a company continues to grow its workforce and geographic
reach— which is particularly important in the active M&A environment.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge

7Most companies that turn to job leveling find the approach to be more transparent, fairer and easier tocommunicate to employees. In an era where many companies are concerned with and actively root out pay
inequities, as well as the deeper structural issues that can sometimes lead to them, job leveling is a system thatcan support this important effort.
Radford's global sales, technology and life sciences surveys provide companies the basis for creating job
architecture that provides a framework upon which job leveling systems are built. And our consulting teams, withoffices worldwide, understand the nuances of each market a company might operate in and have the experienceand knowledge necessary to customize approaches for the particular location and circumstances of each client.
* * * * *To learn more about participating in a Radford survey, please contact our team. To speak with a member of ourconsulting group about building job leveling and salary structure systems, write to consulting@radford.com.

As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge

8Author Contact Information
Marie Brinkman
Associate Partner, Radford
Aon | Talent, Rewards & Performance+1.408.518.2371
mbrinkman@radford.com

Gaurav DuttDirector, Radford
Aon | Talent, Rewards & Performance+44 (0)20 7086 5092
gdutt@radford.com

Brooke GreenPartner, Radford
Aon | Talent, Rewards & Performance+1.415.486.6911
brooke.green@radford.com

About Radford
Radford partners with technology and life sciences companies to reimagine their approach to rewards,
empowering them to achieve superior levels of people and business performance. Radford is part of Aon plc(NYSE: AON). For more information, please visit radford.aon.com.

About Aon
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement andhealth solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data andanalytics to deliver insights that reduce volatility and improve performance. For further information, please visit
aon.com.
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As Market Realities Change, Radford’s Global Job Leveling Model Rises to the Challenge

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