You're trying to figure out if your company is paying competitively, so you pull up your compensation tool and start comparing roles.
Your "Chief Amazement Officer" at your 50-person startup seems wildly overpaid compared to the "Customer Customer Officer" data you're seeing from 10,000+ employee companies.
But here's the thing—you might be comparing apples to spaceships.
Because, your “Chief Amazement Officer” is actually doing work that’s much closer to a “Customer Care Associate” at those enterprise orgs you’re matching to.
This is exactly why job leveling exists, and it's probably one of the most misunderstood (yet critical) aspects of building fair and competitive compensation structures.
What Job Leveling Actually Is (And Why It Matters More Than You Think)
Job leveling is essentially a translation and normalization exercise.
Think of it this way: Companies use hundreds of different titles to describe similar work. One company's "Growth Hacker" might do the exact same job as another company's "Senior Marketing Analyst." Without a standardized way to compare these roles, salary benchmarking becomes impossible—and salary decisions become wild guesses.
More technically, job leveling assigns job roles and responsibilities into defined categories (called "families") and levels. It's the backbone that makes salary databases like Pave, Aon Radford, Mercer, and Kamsa actually useful, because it allows you to compare apples to apples across thousands of companies.
But here's where most People leaders get tripped up: They treat job leveling like a simple lookup table, when it's actually a nuanced translation process that requires careful analysis.
The Two Scenarios Every Company Faces
Scenario 1: You're Starting Fresh
If this is your first rodeo with job leveling, congratulations—you get to take the easy path. Most compensation tools provide leveling frameworks you can download and adopt wholesale. This creates a perfect 1:1 match between your internal levels and the tool's database, making benchmarking straightforward.
The key here is to resist the urge to reinvent the wheel. Use their framework as your foundation, then adapt it to your company's specific needs.
Scenario 2: You Already Have a Framework (Welcome to the Translation Phase)
If you already have an internal leveling system but are switching tools—or using a compensation database for the first time—you're entering what I like to call "translation phase."
This is where you have to figure out how your existing framework maps to the new one. Does your "Team Lead" equal their M3, or is it an M4? Are your levels more granular or broader than theirs?
The only way through this is to read the actual definitions of scope, responsibility, and impact for each level and compare that to the real work being done in your organization. Yes, it's tedious. No, there's no shortcut that won't cost you later. (Although, generative AI tools like Claude can start to be a helpful assist.)
Three Mistakes That Derail Compensation Strategy
Here's what to watch out for:
Mistake #1: Assuming P4 = P4 Across All Frameworks
This is like assuming that a size "Medium" t-shirt from every brand fits the same way. Spoiler alert: It doesn't.
A Professional Level 4 (P4) in Pave's framework is not necessarily equivalent to a P4 in CompAnalyst's system. Each compensation tool has its own definitions, scope expectations, and level granularity.
If you're switching between frameworks, you need either:
- A detailed comparison of actual work scope and impact (the accurate but time-intensive approach)
- A "Rosetta Stone" mapping that the company provides (if you're lucky enough to have one)
Skip this step, and you could end up overpaying or losing talent to competitors who better understand role-appropriate market rates.
Mistake #2: Treating Numbers in Titles as Levels
Here's a fun fact that will mess with your head: A "Software Engineer II" is not automatically a P2.
Depending on the leveling framework and the actual scope of the role, that Software Engineer II could easily be a P2 or P3. I've even seen cases where they map to P4 at companies with particularly flat title structures.
The title is just a label. What matters is the actual scope of work, decision-making authority, and organizational impact. Always compare the substance, never the label.
Mistake #3: Thinking Levels Determine Market Value
This one catches even experienced People leaders off guard: A P3 in Customer Support might earn significantly less than a P2 in Data Analytics.
Levels give you a way to pull comparable market data within job families, but they don't create universal salary expectations across different functions. Market dynamics, skill scarcity, and business impact all play huge roles in compensation ranges.
Use levels as your starting point for benchmarking, but always factor in the specific job family and market conditions for that type of work.
The Real Cost of Getting This Wrong
When companies mess up job leveling, it doesn't just create small inefficiencies—it creates massive talent problems:
- Underpaying: You lose top performers to competitors who properly benchmark their roles
- Overpaying: You waste budget on inflated salaries that could have funded additional hires
- Internal inequity: Employees doing similar work end up with dramatically different compensation, destroying trust and morale
- Scaling problems: Poor leveling frameworks become exponentially more expensive and complicated to fix as you grow
200-person companies can spend six figures and months of leadership bandwidth trying to untangle compensation problems that started with poor job leveling decisions when they were 50 people.
Your Action Plan: Getting Job Leveling Right
Step 1: Choose Your foundation wisely. If you're starting fresh, pick a leveling framework from your primary compensation tool and stick with it. For US-based tech startups, I recommend Pave. Resist the urge to customize until you understand how leveling works in practice.
Step 2: Document the translation. If you're mapping existing levels to a new framework, create a detailed translation guide. Include not just the level mappings, but the reasoning behind each decision. Your future self (and your successors) will thank you.
Step 3: Train Your leaders. Make sure your managers understand how leveling works and why it matters. They're the ones making promotion and hiring decisions, so they need to understand the compensation implications of level changes.
📌 The Four-T Playbook: Tip, Trick, Tactic, or Template
Every edition, I’ll share a proven insight to help you scale faster, smarter, and more efficiently.
👉 Tip: Audit regularly. Job responsibilities evolve, and so should your leveling decisions. Review your framework annually, and adjust mappings when roles significantly change in scope or impact. It's often helpful to do this at the same time as the annual budgeting process.
Final thoughts:
Job leveling isn't flashy, “fun” work, but it's the foundation that everything else in compensation builds on. Get it right, and you'll have a sustainable framework for making fair, competitive, and defensible pay decisions. Get it wrong, and you can spend years fighting fires that could have been prevented.
The good news? You don't have to be perfect from day one. But you do need to be intentional, methodical, and willing to invest the time upfront to save yourself massive headaches later.
Because at the end of the day, your "Chief Amazement Officer" and that "Customer Success Associate" might be doing similar work—but only proper job leveling will help you figure that out.
Until next time,
Melissa
