Broad banding; also known as:
“système de classes à fourchettes élargies” in french and “un sistema de bandas anchas” in spanish
A salary program that replaces multiple grades and ranges with a limited number of wide ranges. Employees move through salary ranges without traditional promotions or job delineation, based on individual skill attainment and expansion of duties, rather than on any prescribed time pattern.
Design Features:
- Substantially fewer grade levels and titles.
- Multiple job levels are combined into a single range.
- Large range spreads, e.g., 75%, 100% or more vs. 40% to 50%.
- Provides a method to recognize dual career tracks (management and professional).
Advantages:
— Better accommodates a flat organizational hierarchy
— Emphasizes
skill development rather than vertical promotions.
— Eliminates
need to establish artificial job titles and hierarchy.
— Provides
greater organizational flexibility since organization is not encumbered
by narrowly focused job titles.
— Simplifies salary administration
by eliminating promotions that are not bonafide changes in duties and
responsibilities.
Disadvantages:
— May not be compatible with the organization’s culture and
is less successful in highly structured organizations.
— Loss of
control points for salary planning and may result in overpaid employees,
requiring greater emphasis on monitoring.
— Difficult to use as
management tool for determining relationship between jobs.
— Limits
promotional opportunities.
Compensation Resources, Inc. is an All-Inclusive Compensation Consulting Firm Specializing in Executive Compensation, Sales Compensation, Performance Management, Litigation Support, Online/Internet Compensation, and Most Human Resource Support Issues.