BROADBANDING- THE NEW SYSTEM TO PAY EMPLOYEES

ABSTRACT
This paper describes the advantages of the broadband pay system, such as the large number of job levels will be reduced to a few, pay scales of pay administration should be simplified, the staff's focus shifted from the position of performance improvement and promotion of self-Development up and so on. Also discusses the limitations of the system, such as the salary scale development, public acceptance, as well as the cultivation of employee loyalty. Enterprises should be combined with the concrete practice of use of them.

INTRODUCTION
Business models alter with the economic cycle and market swings. Additionally, the change in government policies towards the industry impacts in transformation within an organization. As the production adopts a new model different areas including spending, talent billing, and employee management vary with the flow. These transitions results from business scaling up, mergers and integration, de-mergers, revamp and restructure. Few HR processes may bear the effect from such transitions. This fundamentally includes compensation, performance management and HR operations. HR Programs including broad banding, mapping of HR Systems, Integrating technologies, abiding by the legal guidelines, compensation alignment tops the priority list. Human fears of losing identity, expecting shrinkage in compensation, low visibility remains principal. Among the above mentioned transition results those which majorly impacts the compensation structure are:

Expansion: The process that impacts the most is recruitment and training. The chief focus remains on
getting talent on board and train to place them as billable. This does impact the compensation bench marking to bridge the salary gap between the new and the old talent during the annual performance appraisal. The concept which the HR accentuates in this situation is What it means to work here .

Restructuring: Every business cycle goes through a phase where the process of productivity is reviewed
to scale up production and minimize cost. The revamping of production results to the restructuring of the work-force. The jobs are mapped to the talent with best-fit. Levels are brought down to few bands and grades. Tata Steel had revamped the work force from 13 to 5 levels redesigning 5100 officers to 4300 officers. The Human factors to be dealt in this situation are the stigma of termination and transparency to build on the trust, of the talent which remains behind. The outplacement offered by the organization,

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fewer promotional opportunities exist so the broadbanding structure allows more latitude for pay increases and career growth without promotion. these employers have found that their skill-based programs have improved y y y y y Employee involvement Workforce flexibility. In flattened organizations. "Broad-banding appears attractive. Pay progression through each band is normally related to competency based. Broad banding is said to decrease intra-firm rivalry in employees and to increase inter-firm (or cross-departmental) flexibility. Teamwork Use of technology. Schuster and Patricia Zingheim are authors of The New Pay: Linking Employee and Organizational Performance. and Procter & Gamble. Honeywell Inc. A broad banded pay structure groups a combination of job classifications into pay bands and places a larger spread between bottom and top rates of pay. General Electric. warns Jay Schuster. a partner in Schuster-Zingheim and Associates. Together with the greater pay range within each band and the smaller number of bands. contribution or market rates of pay. and the differential between one grade and the next is increased. performance. Skill-based pay With a skill-based plan. Broadband pay structures encourage the development of broad employee skills. Broadbanding and skill-based pay are terms that compensation specialists toss around a lot these days. Additionally. so they cost less to administer and manage over time. However.Employers that have successfully used skill-based systems include Johnson & Johnson. a Los Angeles-based compensation consulting firm. because non-managerial jobs are appropriately valued and skill development is rewarded. According to Schuster. Digital Equipment. broad banding is quite distinct from conventional grading systems. But what exactly are broadbanding and skill-based pay. EVOLUTION Broadbanding evolved because organizations want to flatten their hierarchies and move decisionmaking closer to the point where necessity and knowledge exist in organizations.. just to name a few. a broadband pay structure is not as sensitive to changing market pricing conditions.DEFINITION Practice in which the number of grades in a pay-scale structure is reduced. because it appears to permit an escape from the pitfalls of traditional base-pay systems while avoiding the difficulties of moving to skill-based pay. employers that are considering adopting a broadband approach need to be careful." Schuster said. compensation depends on the level and proficiency of employees' skilled . and are they viable alternatives to traditional compensation packages? 2 . They also provide serious non-promotional income opportunities for employees. Employee versatility.

Broadband will soon pay the original essence of a number of different remuneration for the pay grade compressed into several levels. wages should be the wage Structure in line positions corresponding to different values to determine the value of wages. the broadband pay system came into being. It is more appropriate here to limit the changes to the job areas that are experiencing the greatest labour market pressures. so division is still more after the job hierarchy. enterprises will be a different job classification. while the pay level for each one corresponding to widen the scope of the pay floating. there is an element of unfairness. The salary ranges for each grade pulled large. then wages will be very heterogeneous management. Each recognised competency attained can be used as the basis for moving an employee onto the next spinal column point. If a team is organised to either complete a related set of tasks or all related activities in the delivery of a service. Wages as a business to employee recognition. but in fact if each position corresponds to an enterprise-specific wages. according to job evaluation carried out in a range of duties as a class. in order to try to weaken this factor can not be divided into intervals too large. Because several pay grades include a large number of job classification in each pay grade has a large salary increase on the corresponding. the bands may have to accommodate its unrelated classifications. One approach is to link progression to a competency based pay structure where employees are rewarded for the acquisition of new skills (competencies). creating a new salary management system and operational processes.Simply put. In this case. It can be introduced in stages rather than across the whole organisation. There are two main reasons for doing this: y y To address severe recruitment and retention difficulties in certain parts of an organisation. Thus. so called broadband pay system. at the same level no longer compulsory in remuneration between employees seeking common ground. in practice. Many employers are moving toward a broadbanding program because it seems like an easy way to reform their traditional base-pay plans. in human resources management is crucial. In such circumstances. this approach simplifies not go far enough because the range of different positions within the pay received by employees of convergence. you can change in a larger salary range. 3 . paid the same wages. due to a drastic suppression of the pay grade. In this system. broadbanding is a base-pay technique that reduces many different salary categories to several broad salary bands. The system of duties and remuneration of the original pattern of relationships between the peer into a pattern of relationships face to face. a common approach is to combine related classifications into a job family To move employees to multi-functional teams where the scope of broad banding will be more extensive and the structure more complex. greatly simplifying management. In theory. this correlation was belt trend. However. salary administration more concise.

that is. such differences in performance-based employees are given a sense of fairness. but they affect or may affect the distribution of benefits within the organization . At the same time. while the latter is a potential loss of talent. In the traditional salary system. their focus shifted from the promotion of job performance improvement and self-development up so as to enhance healthy competition based on performance. the staff has their own access to different salaries because of their performance. resulting in lower performance. that activity does not require the organization's activities. often led to vicious competition. so that they maximize the utility is allowed to perform 4 . but to be promoted must compete for limited resources. this level of unity based on giving the employees a sense of equality. Encourage high-tech talent: Today's society. summarized in the following points: 1. which will help the staff to create a harmonious atmosphere within the team culture. high-tech talent as the enterprise sustainable source of competitiveness is a key factor in competing for business. take the administration to change the road) to achieve. 2. This business performance. At the same time because of job and pay the corresponding relationship between the stress. and weakens the promotion generated due to the vicious competition . either through the promotion of job level (for example. The former is a dominant brain drain. A sense of equality and fairness to ensure a sense of employees to adopt a positive attitude to improve performance. Here. but higher positions is limited. low-duty staff salaries may be far more than the high office staff. the staff well aware of the pay gap due to the performance rather than the job. employee relations and team-building is negative. The appropriate degree of healthy competition is good for enterprises. In the same salary. To build a harmonious Culture of the team: The traditional salary system is based on job pay. most of all focused on the skills of a technical field. a large number of employees were included in the same pay scale in between them there is no gap in pay levels. Because high-tech personnel with the exception of a few management skills.ADVANTAGES OF BROAD BANDING PAY SYSTEM Broadband pay system compared to the advantages of traditional compensation system. meet all needs. Decision-making has been promoted to the political behavior of the organization one of the reasons most frequently. high-tech workers want higher pay. pay the same as the same position. or switched to other businesses. but also easily lead to 'Political act' (political behavior). and a calm attitude towards pay. both of which cases are business do not want to see into. A sense of equality and fairness is ensured : In the broadband pay system. the pay does not reflect the positive role of performance will lead to staff from emotional damage. 2. In order to obtain high-paid employees to be promoted to high positions.

In the broadband pay system. outside the labor market supply and demand will cause a change in the traditional salary system. which allow it to focus on the technical level to enhance and the contribution of business performance without having to force yourself to excel in their career path is not to develop. pay the release of breakthrough in his post. However. leading to the problem of unequal wages highlighted. for each salary level include the number of posts) as well as the definition between the two pay scales are not specific targets. but also increased the difficulty of performance management. job restrictions. At the same time that such a pay system is the implementation of all the staff against the company to avoid discrimination. so the employees in the same positions as long as the meeting works standards should take the same 5 . but is not responding to external changes in a more timely manner will lead to the brain drain. 1. their pay only to be adjusted in the hierarchy without affecting the salary system as a whole. then lost the meaning of salary grading. high-tech employees in the class can also be achieved with the higher rank staff (eg managers) the same pay. high-tech talent to seek high-paying does not only turn their good management of the road. If the salary is too small. THE LIMITATIONS OF BROADBAND PAY SYSTEM Although the above described various advantages of broadband pay system. salary range of large. but also widely accepted by the public. post conversion. performance above all else. 3. This principle holds that because in the same position on the staff are facing the environment. Public resistance: As the broadband pay system. due to the same pay scale. including job. Pay Scale difficult to draw: Broadband pay system characteristics and advantages are based on the salary scale classification. In the broadband pay system. too many levels. heavy and cumbersome.professional technical work. which has a strong incentive. which in fact is the talent stifled. the changes in positions of responsibility by the majority of job evaluation is still within the same pay scale. salary scale and division of simplicity and accuracy is the key. The equal pay for equal as 'Labor Law' in one important principle. However. Since this makes the high-tech workers do not have to give up their career line can get paid leave. as the end. Flexibly respond to rapid change: The duty of the change. which makes the division of the pay scale is very difficult to operate. because the more the less the pay scale will increase the dependence of performance management 2. due to the unreasonable compensation system design. because of the pay scale large span. the degree of compression of job classification (ie. but in practice there are limitations. has been the allocation of equity compensation obvious signs. 'slight situation as a whole' knock-on effects for human resources management. challenges and work standards are the same.

according to Maslow's hierarchy of needs theory. Therefore. bring into full play the positive role of the system in order to promote enterprise compensation management. * Support team performance. To sum up. motivate and retain staff of the measures are focused on salaries. making acts of employees to rely solely on performance incentives. * Encourage employee involvement. the material to meet the needs of more relatively low-level. The goal is to make both the employer and the employee "winners" in the compensation game. * Reflect external job market differences. pay is a subversion of that principle. the staff turned to the pursuit of promotion satisfaction. while providing for higher wages. but the salary scale into difficulties. CONCLUSION ³Broad banding is more of a vehicle to deliver specific new pay solutions than i is an independent program to solve an employer's compensation problems. 3. which makes it difficult to accept the public will be enormous resistance to its implementation. the public and inspire the low acceptance of a single material limits the application of the system. broadband pay system in the team-building. it is not conducive to foster employee loyalty. Too much emphasis on material incentives: As the broadband pay system to focus on performance. These elements are central to any compensation strategy.pay. At the same time. motivating employees. employees of enterprises appears likely to jump ship. the role of material incentives is not obvious at this time. as companies to attract. When employees reach a certain level of material satisfaction that inevitably produce saturated. employee seniority. qualifications are no longer considered. Incentive effect of this single is limited. employer must align Broad banding to: * Support organizational strategies. while the results of high-performance rather than the promotion and pay are directly linked. Broadband-only performance pay system. while the promotion is to better meet the needs of high-level. enterprises in practice according to their own circumstances and their environment should choose to use." Thus. to respond to speed with its advantages. * Create an effective economic partnership. 6 .

com/?k=structure 2."The key to success is to define your goals clearly and then carefully pick the new pay solutions that work for your organization.com/def/broadbanding. REFERENCES 1.htm 7.hrdm/net/wiki 8. .workinfo. Facts and figures from HR magazine by Bill Leonard: HR AGENDA: compensation( business publication) 3.com 7 .com 6.net/em/par_performance. http://www.sitehr. http:www.com 5.businessdictionary.hi38.citeman. http://www. http://www.hrdm. http://www.com 4. http://eng. http://www.

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