Potential Problems of Human Resource Broad banding Salary Management Strategy

Abstract

Broadbanding is a job grading configuration that comes between applying spot salaries and numerous job grades to establish what to pay typical positions and serving within those positions. Broadbanding is an approach to job classification and compensation that takes into consideration content and scope of a job; employee knowledge, skills and abilities; the job market; and employee performance. Broadbanding gives the organization some broad job classifications; but it does not have many distinct job grades unlike traditional salary structures. As a result, broadbanding trims down the prominence on ‘statuses or hierarchy and places more stress on tangential job movement within the company. In a broadbanding structure an employee can be more easily rewarded for lateral faction or skills improvement, whereas in traditional multiple grade salary structures pay hike happens principally via job promotion. In this way, broadbanding is a more flexible pay system. This suppleness, on the other hand, can lead to internal pay relativity problems as there isn’t as much control over salary progression as there would be within a traditional multi-level grading structure. This paper aims at identifying the probable problems of broadbanding that often restrict the organizations from its complete application in spite of its different positive applications