q Simplify the classification system
q Provide agencies with greater flexibility to meet changing workforce needs
q Reduce the number of job classes, grade levels, & titles
q Allow for position specific recruitment
Definition of Broad Banding
q Broad banding is an attractive alternative to rigid structured, specialized and hierarchical organizations.
q A strategy for salary structures that consolidate a large number of pay grades.
q An approach to compensation that focuses on performance and market, uses a few, wide salary bands to deliver pay.
How to Implement
l3-8 wide "bands" are created
lBands are established at major breaks
-Differences in work or skill/competency requirements
lPay rates are analyzed to create an overall pay range for each band
Benefits of Broad Banding
Disadvantages of Broad Banding
q Fails to improve the career management process in organizations.
qSalary ranges-control growth for an individual until they acquire new skills for advancement.
q Maintain the perception of pay equity-can be more difficult
q Limits promotional opportunities to a higher salary range since there are fewer salary ranges.
Effectiveness in Pay System Criteria
Industry Use & Popularity
RParticipative management style
RStrong performance pay orientation
RStrong communications and training capabilities
RService oriented compensation staff
Survey from Fox Lawson & Associates newsletter
ÃÂ®The average organization that adopted new salary ranges had about 3,100 employees.
ÃÂ®33% of these organizations were City organizations
ÃÂ®33% were county organizations
ÃÂ®11% were colleges
ÃÂ®11% Sate organizations
ÃÂ®11% Special Districts
Reasons to change their state's salary and classification systems:
ÃÂ®State personnel mangers believe states have too many job titles, averaging 1,802 titles
ÃÂ®Too few employees per job title, average of 24 per title
ÃÂ®Classification and compensation systems too old, average of 23 years...