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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Paying for the Job, the Person or What? Broadbands typically do not have a single midpoint; they have a minimum and maximum. This article needs more links to other articles to help integrate it into the encyclopedia. After all the hype, it turns out that not that many organizations thought broadbanding is their silver bullet.

Broadbanding is the term applied to having extremely wide salary bands, much more encompassing than with traditional salary structures. 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 compensaton happens primarily via job promotion.


This can be effectively managed through the use of market data, in order 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.

Traditional salary structures, when done right, give current information to your management team about what market rates are. Like all tools, it’s great for achieving specific outcomes, but can cause great damage when misapplied. It only takes a few reckless managers rewarding a few individuals inappropriately to broasbanding an entire pay system called into question. We can help you bring modern compensation to life in your organization. This article is an orphanas no other articles link to it.

Thus a bias exists against the broadening of skills. In contrast, the jobs in traditional organizations are narrow and specialized. Whether your pay system is fair or not fair is not quite as important as if it is perceived as fair. April 28, The Advantages and Disadvantages of Broadbanding Broadbanding is the term applied to having extremely wide salary bands, much more encompassing than with traditional salary compesation.


Broadbanding is said to decrease intra-firm rivalry in employees and to increase inter-firm or cross-departmental flexibility. One concern noted by companies that have implemented broadbanding is that compensation costs may go up. Broadbanding is a very effective tool to reduce salary grades or job classifications, but it definitely has its drawbacks. Whether we like it or not, some great person-to-job matches just do not happen because of the way a job has been classified or positioned with an assigned salary band.

January Learn how and when to remove this template message. 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. In broadbanding, compensaation spread of the pay ranges is wider and there is less overlap with other pay ranges. By using this site, you agree to the Terms of Use and Privacy Policy.

Is broadbanding another passing fad? Thank you for this article. At the close of the 90s, a Wyatt survey of 1, companies found that less than one in ten used broadbands. This week, Compensation-L subscribers were asked, “Whatever happened to broadbanding?

Broadbanding – Wikipedia

Some organizations use wide grades also called fat grades. It may be greater. Tailored communication to each of these groups will go a long way towards ensuring the successful implementation of a broadbanding program. It combines and consolidates the number of levels or job grades. It is your call whether broadbanding is a tool for use in your organization or not. Learn how and when to remove these template messages.

Fewer salary bands lead to fewer opportunities to climb to the next band; meaning fewer promotions to celebrate with family and friends. Links Contact About Us. If 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.

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Most of the time, creating enormously large bands is done as a measure to support a restructuring. Benefits of Broadbanding Broadbanding has been successfully implemented comppensation large, hierarchical organizations which attempted to flatten their organizations and remove levels of management. Please help improve it or discuss these issues on the talk page.

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.

Broadbands are imperative for companies with competency-based pay programs, but are also used in companies with longevity- and performance-based pay programs. This is the best face-saving way for an organization to collapse salary ranges and supporting de-layering. Also, some employees may feel lost, or not know how to build their careers without a vertical corporate ladder to climb.

Broadbanding is used by Payroll Departments in Human resource management. Thank you for this broadbandnig, it helped me work on my Compensation course assignment! Before moving to broadbanding, companies should consider the following: That also means the compa-ratio tool can not be used. Job Sites in USA. How well do your employees understand your compensation plan and philosophy?

Views Read Edit View history. Most firms end up with pay plans that slot jobs into classes or grades, each with its own vertical pay rate range. Flat organizations that are flexible, have a higher tolerance for ambiguity, and encourage lateral or cross functional movement would be good candidates for broadbanding.

Broadbanding is still around, although it is getting far less press than it did in the nineties.