Ipd Survey: Study of Broad-Banded and Job Family Pay Structures

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January 2000

IPD surveyreport


Study of broad-banded and job family pay structures


Study of broad-banded and job family pay structures

Study of broad-banded and job family pay structures
A survey of developments in broad-banded and job family pay structures was conducted by the Institute of Personnel and Development in October-December 1999. Although such structures are not new (they first emerged in the late 1980s) they have become increasingly popular in recent years. Yet there are still uncertainties about how they work, indeed if they work. The objectives of the study were to obtain information on how and why such structures are being adopted. The research findings are based on a questionnaire, which was completed by 193 respondents, and 15 case study interviews, held primarily with pay and benefits managers.

As might be expected, broad-banded structures with three or less bands are most common for senior executives, although a good proportion of organisations (40%) have this type of structure for managers and professional staff. At the other end of the scale only 8 per cent of managerial/ professional staff and 17 per cent of other staff are in a narrow-graded structure. This indicates that such structures, which were typical in the 1970s and 1980s, are now much less popular. Broad-banded structures (five or less bands) are now the most common form (60 per cent for managers, professional and other staff). Just under half of the broadbanded structures (47 per cent) have been in place for at least three years. Width of grades/bands The information provided by respondents on the width of grades (the pay span in percentage terms) in their structures is summarised in Table 2. This shows that nearly half of survey participants (48%) have structures with bands of 50% or more.

Broad-banded pay structures
Introduction There is no generally accepted definition of what a broad-banded structure is, except that it comprises fewer and wider bands than a traditional graded structure. The text books describe broad-banded structures as having less than six bands, each with a pay span of between 70 per cent and 100 per cent above the pay range minimum. In practice, some organisations refer to their structures as being broad-banded when there are seven or eight grades each with spans of 50 per cent or so. These might better be called ‘fat-graded’ structures, while those that are truly broad-banded could be termed ‘careerbased’ structures. The latter term is appropriate because it underlines the principle adopted by a number of the organisations surveyed, which is that broad bands are as much, if not more, about career development as the delivery of pay. Number of bands The proportion of organisations with various numbers of bands for senior executives, managerial/professional staff and other staff is shown in Table 1.

Table 2

Width of Bands
% of respondents

Normal grade (25% or less) Broad grade (26-49%) Broader band (50-79) Broad band (80% or more)

24 28 30 18

Table 1
Number of bands

Number of Grades/Bands
Senior Executives % Managerial/ Professional % 40 34 18 8 Staff % 23 26 34 17

Use of job evaluation One of the issues associated with broadbanding is the use of job evaluation as a means of defining bands. Initially, it was thought that broad bands would mean the end of analytical job evaluation as we know it. The survey showed that this is not entirely the case. Although 24 per cent of respondents use grade/band or generic role definitions to define grades, 42 per cent rely on analytical job evaluation, which is the basis for assigning jobs to broad bands adopted by 34 per cent of organisations. However, job matching is used to place jobs in bands by 24 per cent of respondents. Progression through bands Broadbanding was designed to provide scope for progressing pay through the whole pay range attached to the band. The focus was on lateral...
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