Broadbanding is a pay structure that consolidates a large number of individual pay grades or salary ranges into a few broader bands or levels. Unlike traditional salary structures with multiple narrow pay grades based on job titles, responsibilities, or tenure, broadbanding simplifies the compensation framework by grouping similar jobs or roles into broader categories based on factors such as skill level, complexity, or market value.
Broadbanding offers several advantages for organizations, including greater flexibility in salary administration, reduced administrative complexity, and increased opportunities for career progression and lateral movement for employees. By consolidating pay ranges into broader bands, organizations can accommodate changes in job responsibilities, market conditions, or employee skillsets more efficiently and adaptively.
However, broadbanding may also pose challenges, such as potential inequities in pay differentiation between roles, reduced visibility into individual performance and contribution, and concerns about fairness or transparency in compensation decisions. Therefore, successful implementation of broadbanding requires careful planning, communication, and alignment with organizational objectives and values.
You may also be interested in learning about these terms:
Onboarding
Workforce Planning
Succession Planning
