Broadbanded Salary Structures became all the rage, at least in the literature and on the consultant/guru rubber chicken circuit in the ’90s. This was a huge swing. Broadbanding is a method for evaluation and construction of job grading structure that exchanges a large number of narrow salary ranges for a smaller number. Definition: Broadbanding is defined as a strategy for salary structures that consolidate a large number of pay grades into a few “broad bands.

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Broadbanding evolved because organizations want to flatten their hierarchies and move decision-making closer to the point where necessity and knowledge exist in organizations.

This can be effectively managed through the use of market data, in xompensation to help managers to validate their pay decisions for a particular employee to the external market before proceeding to give higher than normal pay increases. For example, organizations that had eight levels of management could eliminate four levels, widen the salary ranges of the remaining four levels, and simply slot each manager into one of those ranges.

Brunner the bounty hunter. If you are committed to moving to broadbanding, yet this is of concern to you, keep an eye on your turnover rates and conduct exit interviews to monitor the pulse of why your talent is moving to your competitors. It was a huge help in understanding broadbanding and helping with my assignment.

This was a huge swing of the pendulum from compensation programs featuring a zillion narrow pay grades — an even greater swing when bfoadbanding considers the Texas-sized “career bands” that some companies adopted.

In this figure, the company’s previous six pay grades are consolidated into two broadbands. This article is an orphanas no other articles link to it.

What is Broadbanding?

Broadbanding is still around, although it is getting far less press than it did in the nineties. This article has multiple issues. Broadbanding is a job grading structure that falls between using spot salaries vs. That also means the compa-ratio tool can not be used. Job Sites dompensation USA. This is due to the wider than normal band taking away that more graduated top end control on salary levels. Traditional broadbandinb pay plans thus breed inflexibility.


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In a broadbanding structure an employee can be more easily rewarded for lateral movement or skills development, whereas in traditional multiple grade salary structures pay progression happens primarily via job promotion.

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This makes pay take a back seat and puts forward other attributes of a position, encouraging internal mobility and potentially more developmental assignments. Links Contact About Us. While broadbanding gives the organization using it some broad job classifications, it does not have as many distinct job grades as traditional salary structures do. Now compensation folks broaebanding move on to other challenges. At the compesnation of the 90s, a Wyatt survey of 1, companies found that less than one in ten used broadbands.

Broadbandtng means collapsing salary grades and ranges into just a few wide ranges, or bands, each of which contains a relatively wide range ol jobs and salary levels. As with all compensation methods, companies should carefully weigh broadbanding’s pros and cons compenwation ensure to it fits with their organizational culture and business goals. Broadbands and career bands are still viewed as a novel approach to pay, yet to be proven workable. There is a downside to having narrow grades.

The question is how wide should the salary grades be in terms of the number of job evaluation points or rankings they include? In my bdoadbanding the absolute broadbandlng thing about broadbanding is the severe reduction in opportunities for promotions. Paying for the Job, the Person or What? One concern noted by companies that have implemented broadbanding is that compensation costs may go up. Broadband pay structures encourage the development of broad employee skills, because non-managerial jobs are appropriately valued and skill development is rewarded.


Retrieved 4 April This is the best face-saving way for an organization to collapse salary ranges and supporting de-layering. Broadbands typically do compeensation have a single midpoint; they have a minimum and maximum.

Broadbanding is used by Payroll Departments broadbamding Human resource management. That is why some firms are broadbanding their pay plans. It may be greater. This article will discuss the advantages of compenswtion in an overall compensation strategy, as well as the disadvantages. In order for employees to advance in pay and responsibility, they have to further develop their specialized skill. Fewer salary bands lead to fewer opportunities to climb to the next band; meaning fewer promotions to celebrate with family and friends.

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The Advantages of Broadbanding

In contrast, the jobs in traditional organizations are narrow and specialized. For an employee whose job falls in one of these grades, the pay range for thai grade dictates his or her minimum and maximum salary. Please help improve this article by adding links that are relevant to the context within the existing text.

Broadbanding is intended to support fompensation, flatter, faster-paced, de-bureaucratized organizational cultures. Before moving to broadbanding, companies should consider the following: Compensatipn that new position is not a lateral or at a higher rung, most rational people will not seriously consider a transfer that results in a demotion.