Presented by: Abhishek Mishra Anshul Dixit ISBE-A//SS//10-12

Introduction:
DEFINITION:
y In broad banding, jobs with similar responsibilities are

grouped in bands of job families, and pay is linked to the market.

When should broad banding be introduced?

y Flatter hierarchies y Address severe recruitment and retention difficulties y Move employees to multi-functional teams

Width of the band

y To meet the specific needs of organization

Developing the structure

Michael Armstrong (Of Chartered Institute of Personnel and Development), identified 12 steps:
1. 2. 3. 4. 5.

Identify most appropriate pay structure. Estimate the number of bands. Decide width of bands. Carry out a job evaluation exercise. Conduct pay survey (tools used to determine the average compensation paid to employees in one or more jobs.) Position roles in bands

6.

Contd.
7. Decide the criterion for progression 8. Decide role of job evaluation for banding 9. Examine existing pay of employees 10. Design procedure to manage the bands 11. Train managers 12. Communicate

Pay effectiveness criterion

y Internal equity y External competitiveness y Employee motivation y Ease of administration

Factors used for classification:

Knowledge Skill Abilities

Benefits
y Removal of levels of management y Encourage employees to broaden skills y Flexibility y Scope for lateral career development y Effective communication

Potential problems
y Maintaining internal equity y Reduced opportunity for promotion y Continuous monitoring of external market rates of pay y Cultural fit y Low acceptance

Thank You