Case Study 4-- Broadbanding
How we helped in the design and implementation of a project on broad banding and introducing functional designations in a leading manufacturing and marketing organization, operating in the chemicals sector.
Our client, a major chemical manufacturing and marketing organization was growing at a very rapid pace and the management team had expanded to consist of a mix of people, those who had grown with the organisation and those hired recently. This had led to the formation of a long and elaborate salary and level structure due partly to frequent rounds of promotion and in part due to hiring of new people from prestigious institutions or those having very specific experience. The desire was to ultimately move to a flatter organization structure and provide an effective framework for the performance management system.
The objective was to develop a structure that would consolidate the large number of salary levels into fewer broad bands. We needed to identify and define bands through grouping of jobs into broad occupational families, based on similarities in attributes, such as tasks performed, the skills required, and work processes followed. We then defined elements within the bands to assign employees, while considering internal equity, direct experience and the level of responsibility and job performance of each employee. The movement did not change the basis of the reward system and it continued to be based upon internal comparisons, specific qualifications, appropriate external labour markets and budget guidelines.
This new structure broadened the assessment focus from job content and scope of work to include knowledge, skills and abilities of the individuals doing the work and enabled a manager to encourage employees to broaden their skills and abilities for a variety of roles instead of being narrow and specialized. A natural progression followed that employees would be keen to maximize the opportunities for deployment across a range of classification levels, with a clearer recognition of the differing work level standards between bands.
The new structure allowed the organisation to put employees in different positions, teach them new skills, without worrying about whether it was technically a promotion or not. Promotion was proposed to be a competitive action, with the best candidate for the position getting it. Non-competitive promotions which are not viable in the long run were proposed to be limited gradually.The most important benefit was the freedom given to managers to award salary increases without having to promote workers.