Broadbanded Salary Structures became all the rage, at least in the literature and on the consultant/guru rubber chicken circuit in the ’90s. This was a huge swing. Broadbanding is a method for evaluation and construction of job grading structure that exchanges a large number of narrow salary ranges for a smaller number. Definition: Broadbanding is defined as a strategy for salary structures that consolidate a large number of pay grades into a few “broad bands.

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Sometimes an organization has become too hierarchical ocmpensation the strategic direction of the company; finding it has become too slow to react, taking too much time to get information from the top down and even less effective at getting messages from the lower rungs up to the ears of senior management.

January Learn how and when to remove this template message. Broadbanding is the term applied to having extremely wide salary bands, much more encompassing than with traditional salary structures. In this figure, the company’s previous six pay grades are consolidated into two broadbands. Broadbanding, like other grading systems, relies on the buy-in of all key stakeholders including the business managers, HR managers, and employees.

The Advantages of Broadbanding

That can easily happen with broadbanding. A lot of lessons have been learned the hard way. Some organizations use wide grades also called fat grades.

Broadbands and career bands are still viewed as a novel approach to pay, yet to be proven workable. Job Sites in Malaysia.

What is Broadbanding?

In a broadbanding structure an employee can be more easily rewarded for lateral movement or skills development, whereas in traditional multiple grade salary structures pay progression happens primarily via job promotion. Retrieved from ” https: Articles with too few wikilinks from January All articles with too few wikilinks Articles covered by WikiProject Wikify from January All articles covered by WikiProject Wikify Orphaned articles from April All orphaned articles Articles with multiple maintenance issues Use dmy dates from April Their minimum-to-maximum spread is greater than tradition-bound ranges of the last century.


We can help you bring modern compensation to life in your organization. Whether we like it or not, some great person-to-job matches just do not happen because of the way a job has been classified or positioned with an assigned salary band. That is just not a positive step for their career development. Also, some employees may feel lost, or not know how to build their careers without a vertical corporate ladder to climb.

Traditional salary structures, when done right, give current information to your management team about what market rates are. Again, for instance, if you want someone whose job is in grade 2 to fill in for a time in a job that Broadbanding evolved because organizations want to flatten their hierarchies and move decision-making closer to the point where necessity and knowledge exist in organizations.

In this way, broadbanding is a more flexible pay broadbandlng. This absolutely can reduce the push-pull between the hiring manager and the human resources organization. Broadband pay structures encourage the development of broad employee skills, because non-managerial jobs are appropriately valued and skill development is rewarded.

Brunner the bounty hunter. Broadbanding is said to decrease intra-firm rivalry in employees and to increase inter-firm or cross-departmental flexibility. Broadbanding is still around, although it is getting far less press than it did in the nineties.

Broadbanding is a very effective tool to reduce salary grades or job classifications, but it definitely has its drawbacks. Flat organizations that are flexible, have a higher tolerance for ambiguity, and encourage lateral or cross functional movement would be good candidates for broadbanding. Please help improve this article by adding links that are relevant to the context within the existing text.


It was a huge help in understanding broadbanding and helping with my assignment. Is broadbanding another passing fad? Broadbanding is used by Payroll Departments in Human resource management. There is no midpoint in a compensaion band. For example, organizations that had eight levels of management could eliminate four levels, widen the salary ranges of the remaining four levels, and simply slot each manager into one of those ranges. The trend is toward common-sense salary structures, with plenty of room to compete for talent and continue to reward stars without busting through a pay grade ceiling.

Most firms end up with pay plans that slot jobs into classes or grades, each with its own vertical pay rate range. Whether your pay system is fair or not fair is not quite as important as if it is perceived as fair. These are simple traditional pay ranges that have been modified so that there are fewer of them than previously used.

Learn how and when to remove broadabnding template messages. Retrieved 4 April Successful use of broadbanding requires that: Broadbanding weakens the linkage between salary growth and skill development for the next higher-level, since it is so far off as to not be a motivator.

This article has multiple issues.

Companies adopting a broadband structure generally reduce the number of salary ranges by one-half to two-thirds. In contrast, the jobs in traditional organizations are narrow and specialized. Job Sites in UK. Simplify how you explain it to them. This flattens an organizational structure and reduces the hierarchy. Also, implementing broadbands in some countries may be easier than in others.