Human Resource Issues: Broadbanding Benefits

Essay by BigD1University, Bachelor'sB+, February 2003

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Main Objectives

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


q Flexibility


qPerformance Focus

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

lInternal Equity

lExternal Competitiveness

lEmployee Motivation



lBudgetary Issues

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

®The average organization that adopted new salary ranges had about 3,100 employees.

®33% of these organizations were City organizations

®33% were county organizations

®11% were colleges

®11% Sate organizations

®11% Special Districts

Reasons to change their state's salary and classification systems:

®State personnel mangers believe states have too many job titles, averaging 1,802 titles

®Too few employees per job title, average of 24 per title

®Classification and compensation systems too old, average of 23 years...