Competency-Based Paying: Broadbanding

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Competency-Based Paying: Broadbanding
Anneke Zwart, Student (University), Netherlands

A common paying structure is competency based: Broadbanding. What is Broadbanding exactly?
Broadbanding is a pay strategy that consolidates the many distinct pay grades of traditional pay structures into only few “broad bands”. Due to only few pay grades in the pay structure, a person’s payment cannot only be increased by job promotion (as is the case in traditional pay structures) but also by improved skills and competencies. Salary is determined by the value a worker delivers relative to the value of the position to the company Thus broadbanding blends skills, performance, competencies, the companies’ goals and pay grades.
Source: Tucker, S.A., K.M. Cofsky (1994) “Competency-Based Pay on a Banding Platform” ACA Journal



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