Broad Banding as a compensation plan involves combining a number of salary grades into a more condensed number of grades with wide ranges. In broad banding, jobs with similar responsibilities and skill requirements are grouped in "bands" of job families, and pay is linked to the market. There are a number of advantages to broad branding such as flexibility for the overall compensation program and the program encourages managers to assume broader responsibility for managing their people.
Broad banding can help encourage growth and career development and increase independent thinking amongst employees. When companies find it difficult to find people with needed skills they are able to efficiently develop those skills within their company. An emphasis is placed on career growth and cross-lateral promotions.
Although broad banding sounds great, it is not for every company. If
Another problem can develop with regard to equity of pay. If two employees are in the same
Overall think broad banding can be successfully competitive in my current work environment. Broadband pay structures encourage the development of broad employee skills, because non-managerial jobs are appropriately valued and skill development is rewarded. Broad banding focuses employees on the changing needs of the organization and provides an opportunity for career growth without the necessity for promotion. My company would benefit from the development of broad employee skills where non-managerial jobs are appropriately valued and skill development is rewarded.
ReferencesBaker, Thomsen Associates. Retrieved May 26, 2007 fromhttp://www.btabta.com/index.cfm?fuseaction=Home.MainMilkovich, G. T., Newman, J. M., & Milkovich, C. (2008). Compensation (9th ed).
New York: McGraw-Hill.