HR Management: Reviewing a Salary Structure, Broad Banding

Broad Banding as a compensation plan involves feature a recite of salary grades into a more(prenominal) condensed number of grades with wide strays. In enormous tie, jobs with similar responsibilities and skill requirements argon grouped in ?bands? of job families, and pay is linked to the market. on that point are a number of advantages to broad branding such(prenominal) as flexibility for the overall compensation curriculum and the program encourages managers to assume broader responsibility for managing their people.

Broad banding can encourage encourage growth and career modernizement and increase individual thinking amongst employees. When companies find it difficult to find people with postulate skills they are able to efficiently develop those skills within their company. An speech pattern is placed on career growth and cross-lateral promotions.

Although broad banding sounds great, it is not for every company. If salary ranges are overly broad problems can arise. Salary ranges provide a way to underwrite the salary growth of each employee, and thereby the salary cost of an organization. With salary ranges an employees salary gives out at a defined point unless they acquire the skills necessary for advancement to the nigh higher level position. Broad banding, with its high salary range maximums, does not have the salary control feature of the more traditional salary structure.

Another problem can develop with regard to equity of pay. If two employees are in the alike(p) salary broad band doing similar work, and one employee is paid near the bottom of the range, and the other is paid near the top of the range, how can an organization justify the salary differential surrounded by the two employees? Also, paying too low of a salary relative to the market could mean higher employee turnover, paying too much relative to the market could mean higher result costs than competitors.

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