PAY STRUCTURES
Guiding principles for broadbanding
Broadbanding appears to be all the rage at the moment – there seem to be books and articles all over the place expounding its virtues. For those of you thinking about implementing such a system, a recent edition of WorldatWork Journal looks at the secrets of success.
In its fullest sense broadbanding is the consolidation of numerous relatively narrow pay grades into much fewer bands with wide salary ranges.
Why introduce broadbanding?
The US research, led by Michael Enos and Greg Limoges of Executive Alliance in Massachusetts, discovered that the primary reasons for implementing broadbanding were to:
enable flexibility and simplify support in meeting unique business needs
link to market-based compensation
improve speed of decision-making/minimise bureaucracy
reduce hierarchy.
Successful broadbanding programmes
How should your business approach broadbanding? Enos and Limoges urge managers to keep in mind some basic principles. Because every company differs, the results are not meant to be interpreted as a blueprint of how to implement a broadband programme, they warn. However, the results do provide nuggets of information, strategies and lessons learned that can be transferred to organisations to help facilitate the implementation of broadbanding.
The authors found that a successful broadband programme is:
1. Championed by a team of high-ranking corporate officials.
2. Implemented for a combination of business and human resource needs.
3. Designed in such a way that the number of job families and bands are based on business needs and market practices.
4. Driven by human resources in partnership with management.
5. Communicated to employees using a variety of vehicles.
6. Carefully developed and rolled out to employees over an extended time period.
7. Evaluated using a variety of measurement methods (for example, surveys, focus groups).
A final word
Clearly, moving a company from a traditional compensation programme that utilises a grade system to a banding environment is no easy feat. However, a solid game plan from the onset will help offset the potential pitfalls of a failed implementation. – Michael Enos and Greg Limoges, WorldatWork Journal, fourth quarter 2000.
Want to know more?
Title: Broadbanding: Is that your company's final answer? , by Michael Enos and Greg Limoges, WorldatWork Journal, fourth quarter 2000.
Methodology: Small but qualitative survey questionnaire completed by HR professionals in 10 companies that have moved to broadbanding.
Availability: Contact WorldatWork, 14040 N. Northsight Blvd, Scottsdale, Arizona, USA AZ 85260, tel: 001 480 951 9191 or email: worldatworkjournal@worldatwork.org.
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