BUS FPX 4043 Assessment 3 Reviewing a Salary Structure

Student Name

Capella University

BUS-FPX4043 Compensation and Benefits Management

Prof. Name

Date

Broadbanding

Broadbanding involves consolidating multiple salary grades and ranges into broader bands with fewer divisions (Giancola, 2009). This strategy gained traction in the 1990s as organizations aimed to streamline operations by reducing hierarchical positions. Unlike traditional salary structures, broadbanding offers flexibility and adaptability to organizational changes. It also encompasses broader job responsibilities compared to conventional structures, which can be advantageous in environments with limited advancement opportunities.

BUS FPX 4043 Assessment 3 Reviewing a Salary Structure

However, broadbanding is not without its drawbacks. One concern is the potential for managers to wield excessive discretion in salary decisions, which can undermine cost-saving objectives. Moreover, the broad salary ranges can pose challenges in establishing fair starting salaries for new hires, as midpoint definitions may lack clarity. Efforts to address these challenges often result in broadbanding resembling more traditional structures, thus diminishing its unique benefits.

In sectors such as healthcare, where structured pay scales are crucial, broadbanding may not be suitable. Healthcare organizations typically necessitate detailed pay scales for each department, categorized by operational, administrative, or clinical roles, with specific scales for individual positions within these categories. Given the complexity and diversity of roles in healthcare, reducing them to broader bands may not align with the sector’s requirements.

References

Giancola, F. L. (2009). A Framework for Understanding New Concepts in Compensation Management. Benefits & Compensation Digest, 46(9), 1–16.

BUS FPX 4043 Assessment 3 Reviewing a Salary Structure