Broadbanding

Meaning & Definition

Broadbanding is the process that allow Combining several salary grades into larger pay bands for better pay flexibility for organisations to base pay decisions on such things as skills, performance and the amount of work associated with an employee’s role, versus only the employee’s work title.

Important features of Broadbanding

• Facilitates flexible compensation decisions determined by skills and performance.
• Growth in careers without the need for multiple job title changes.
• Reduces administrative complexities in regard to salary structures.
• Encourages employees to expand their skill set and their role.
• Provides the ability to match an employee’s compensation to both the marketplace and business requirements.

Governance & Policy Alignment

The term is not clearly specified in any statutory requirement.

When broadbanding, it needs to be aligned with:

• Compensation and benefits policy.
• Performance management and merit increase guidelines.
• Internal equity and market benchmarking practices.

The governance structure needs to be clear so that any inconsistencies or biases in pay are avoided.

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