A wage is a compensation, usually financial, received by workers in exchange for their labor.

Compensation in terms of wages is given to workers and compensation in terms of salary is

given to employees. Compensation is a monetary benefit given to employees in return for the
services provided by them.

A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to
workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum
wage laws are in effect in a great many jurisdictions, there are differences of opinion about the benefits
and drawbacks of a minimum wage. Supporters of the minimum wage say that it increases the standard
of living of workers and reduces poverty. [1] Opponents say that if it is high enough to be effective, it
increases unemployment, particularly among workers with very low productivity due to inexperience or
handicap, thereby harming lesser skilled workers to the benefit of better skilled workers

Living wage is a term used to describe the minimum hourly wage necessary for an individual to
meet basic needs, including shelter (housing) and other incidentals such as clothing and nutrition,
for an extended period of time or a lifetime. In developed countries such as the United Kingdom
or Switzerland, this standard generally means that a person working forty hours a week, with no
additional income, should be able to afford a specified quality or quantity of housing, food,
utilities, transport, health care, and recreation.

This concept differs from the minimum wage in that the latter is set by law and may fail to meet
the requirements of a living wage. It differs somewhat from basic needs in that the basic needs
model usually measures a minimum level of consumption, without regard for the source of the
income. A related concept is that of a family wage – one sufficient to not only live on oneself,
but also to raise a family, though these notions may be conflated.

Type of wages
The main types of wages are:
1. Subsistence wage;
2. Minimum wage;
3. Fair Wage; and
4. Living Wage
Subsistence Wage: - The wage that can meet only bare physical needs of a
worker and his family is called subsistence wage.
Minimum Wage: - Minimum wage is the wage that is able to provide not
only for bare physical needs but also for preservation of efficiency of
worker plus some measure of education, health and other things.
Fair Wage:- Fair wages is an adjustable step that moves up according to
the capacity of the industry to pay, and the prevailing rates of wages in the
area of industry.
Living Wage:- Living wage is that which workers can maintain the health
and decency, a measure of comfort and some insurance against the more
important misfortune of lie.
In any even the minimum wage must be paid irrespective of the extent of
profits, the financial condition of the establishment or the availability of
workmen at lower wages.
The wages must be fair, i.e. sufficiently high to provide standard family
with ,food, shelter, clothing, medical care and education of children
appropriate to the workmen.
A fair wage lies between the minimum wage and the living wage which is
the goal.
Wages must be paid on an industry wise and region basis having due
regard to the financial capacity of the unit.

Answer:

Answer
A wage is better because you get paid for how many hours you work, while, with a salary, you
get a set amount of payment. An example of a job that gets a salary is a teacher. It doesn't matter
how much homework they grade over weekends and vacations, they get the same amount of
money.

Answer
What a "Salary" looks like:
$45,000 per year
What a "Wage" looks like:
$16.50 per hour
So basically, a Salary tells you how much you'll earn either in a month or a year.
While a wage tells you how much you'll earn in an hour (and a Day, too? Not sure on this).  

Answer
in my view wages is paid to the labor directly involved in production either receives money
hourly, monthly, or weekly. while salary is paid to the worker or staff related to administration
and selling. wages becomes part of the product cost, while the salary treated as selling and
administrative expense.  

Answer
wages are what you get paid hourly for instance if you get paid like $6.00 per hour then if you
work more then 40 hours in one week then you are entitled to overtime which is time and a half
so after 40 hours you would then be making $9.00 per hour.
salary is when you get 40 hours a week 80 hours every two weeks and even if you worked 112
hours you would only get paid for the 80 and vise versa if you only worked 60 hours you would
still get paid for 80. so in this case you may get like $24,000 a year right so your employer would
take this amount and divide it by 26 pay periods in a year and then by 80 hours in a pay period
and this is your pay per hour.
If you are given the choose between the two and you know that the job is very time consuming
then it is more wiser to take an hourly pay then a salary pay. You will make up for everything
with the Over time hours put in.
Good Luck and Have Fun...Enjoy Life  

Answer
Salary is paid to "exempt" employees. These are people who do not have to account for the hours
they put into the job; rather they are paid to get the job done. They still have to account for
holidays, sick days and vacation days, just not the individual hours. Often they get bonuses or
other incentives since these jobs are largely management, sales or project related. Wages are paid
to "non-exempt" or "hourly" employees. These people account for their time on a time card or
other record keeping system. Depending on the company, they may earn overtime for extra
hours, or be expected to take time off to offset any late hours within the same time period.
Usually the employee has to have worked a full 40 hour week to earn overtime. By the way, the
employer does not have the right to amend a time card without employee permission/initial.
Answer:
A Wage is, as mentioned, an amount paid per hour. A salary is a fixed amount of pay per week
or month (usually paid semi-monthly). A yearly pay is known as an annual amount or annual
pay. Minimum wage as of July 15, 2009, is $7.25 per hour. Salary is paid notwithstanding the
amount of hours to usually Management employees.
He gets paid $10 per hour. (wage)
He gets paid $600 a week. (Salary)
He gets paid a salary of $4,500 per month.
His wages, with all the hours he works, totals an average pay of $4,500 a month.
His annual earnings are about $55,000 per year.
I earn six-figure income. The problem is that two of them are behind the decimal point!
Other forms of income include piecerate and daily pay (such as for a taxicab driver).
Unearned income are normally called benefits or pension benefits.

Answer">Answer">Answer
Wage is payment received by an employee in exchange for labor. It may be in goods or services
or food during the labor and its improvement. As per the old custom, the wage is decided as per
the hardship of the work, for example, a mason $100, a carpenter $110, a helper $60, a
supervisor $80, or so. Besides, when once paid, the relationship of the worker and employer is
over. But salary, is the form of money only, i.e., is paid or regular basis such a weekly, monthly
along with related insurance plan and retirement benefits and it is fixed on the basis of category /
nature of work.

A person can get different wages in the same month depending on the work he does but a person
can get only one fixed salary for a month.
A person who earn wages has no fixed work whereas the person earning salary have a fixed post
and a particular work schedule to do.
Wage is paid only on the basis of the work done, irrespective of provision of work by the
employer or not, but what the worker has carried out, whereas salary is paid every interval of
week or month based on the schedule of work entrusted and not the work carried out.
In terms of accounts, wages is direct expense and is included in trading account whereas salary is
indirect expense and is included in profit and loss account.

Read more:
http://wiki.answers.com/Q/What_is_the_difference_between_a_salary_and_a_wage#ixzz1OPFq
NB1T

Answer:

Answer
A wage is better because you get paid for how many hours you work, while, with a salary, you
get a set amount of payment. An example of a job that gets a salary is a teacher. It doesn't matter
how much homework they grade over weekends and vacations, they get the same amount of
money.

Answer
What a "Salary" looks like:
$45,000 per year
What a "Wage" looks like:
$16.50 per hour
So basically, a Salary tells you how much you'll earn either in a month or a year.
While a wage tells you how much you'll earn in an hour (and a Day, too? Not sure on this).  

Answer
in my view wages is paid to the labor directly involved in production either receives money
hourly, monthly, or weekly. while salary is paid to the worker or staff related to administration
and selling. wages becomes part of the product cost, while the salary treated as selling and
administrative expense.  
Answer
wages are what you get paid hourly for instance if you get paid like $6.00 per hour then if you
work more then 40 hours in one week then you are entitled to overtime which is time and a half
so after 40 hours you would then be making $9.00 per hour.
salary is when you get 40 hours a week 80 hours every two weeks and even if you worked 112
hours you would only get paid for the 80 and vise versa if you only worked 60 hours you would
still get paid for 80. so in this case you may get like $24,000 a year right so your employer would
take this amount and divide it by 26 pay periods in a year and then by 80 hours in a pay period
and this is your pay per hour.
If you are given the choose between the two and you know that the job is very time consuming
then it is more wiser to take an hourly pay then a salary pay. You will make up for everything
with the Over time hours put in.
Good Luck and Have Fun...Enjoy Life  

Answer
Salary is paid to "exempt" employees. These are people who do not have to account for the hours
they put into the job; rather they are paid to get the job done. They still have to account for
holidays, sick days and vacation days, just not the individual hours. Often they get bonuses or
other incentives since these jobs are largely management, sales or project related. Wages are paid
to "non-exempt" or "hourly" employees. These people account for their time on a time card or
other record keeping system. Depending on the company, they may earn overtime for extra
hours, or be expected to take time off to offset any late hours within the same time period.
Usually the employee has to have worked a full 40 hour week to earn overtime. By the way, the
employer does not have the right to amend a time card without employee permission/initial.
Answer:
A Wage is, as mentioned, an amount paid per hour. A salary is a fixed amount of pay per week
or month (usually paid semi-monthly). A yearly pay is known as an annual amount or annual
pay. Minimum wage as of July 15, 2009, is $7.25 per hour. Salary is paid notwithstanding the
amount of hours to usually Management employees.
He gets paid $10 per hour. (wage)
He gets paid $600 a week. (Salary)
He gets paid a salary of $4,500 per month.
His wages, with all the hours he works, totals an average pay of $4,500 a month.
His annual earnings are about $55,000 per year.
I earn six-figure income. The problem is that two of them are behind the decimal point!
Other forms of income include piecerate and daily pay (such as for a taxicab driver).
Unearned income are normally called benefits or pension benefits.

Answer">Answer">Answer
Wage is payment received by an employee in exchange for labor. It may be in goods or services
or food during the labor and its improvement. As per the old custom, the wage is decided as per
the hardship of the work, for example, a mason $100, a carpenter $110, a helper $60, a
supervisor $80, or so. Besides, when once paid, the relationship of the worker and employer is
over. But salary, is the form of money only, i.e., is paid or regular basis such a weekly, monthly
along with related insurance plan and retirement benefits and it is fixed on the basis of category /
nature of work.

A person can get different wages in the same month depending on the work he does but a person
can get only one fixed salary for a month.
A person who earn wages has no fixed work whereas the person earning salary have a fixed post
and a particular work schedule to do.
Wage is paid only on the basis of the work done, irrespective of provision of work by the
employer or not, but what the worker has carried out, whereas salary is paid every interval of
week or month based on the schedule of work entrusted and not the work carried out.
In terms of accounts, wages is direct expense and is included in trading account whereas salary is
indirect expense and is included in profit and loss account.

Read more:
http://wiki.answers.com/Q/What_is_the_difference_between_a_salary_and_a_wage#ixzz1OPFq
NB1T

It is important to understand the difference between wages and salaries. A wage is

based on hours worked. Employees who receive a wage are often called "non-
exempt." A salary is an amount paid for a particular job, regardless of hours
worked, and these employees are called "exempt."

The difference between the two is carefully defined by the type of position and the
kinds of tasks that employees perform. In general, exempt employees include
executives, administrative and professional employees, and others . These groups
are not covered by minimum wage provisions. Non-exempt employees are covered
by minimum wage as well as other provisions.

It is important to pay careful attention to these definitions when determining

whether an individual is to receive a wage or a salary. Improper classification of a
position can not only pose legal problems, but often results in employee
dissatisfaction, especially if the employee believes that execution of the
responsibilities and duties of the position warrant greater compensation than is
currently awarded.

When setting the level of an employee's monetary compensation, several factors

must be considered. First and foremost, wages must be set high enough to
motivate and attract good employees. They must also be equitable—that is, the
wage must accurately reflect the value of the labor performed.

In order to determine salaries or wages that are both equitable for employees and
sustainable for companies, businesses must first make certain that they understand
the responsibilities and requirements of the position under review. The next step is
to review prevailing rates and classifications for similar jobs. This process requires
research of the competitive rate for a particular job within a given geographical
area.

Wage surveys can be helpful in defining wage and salary structures, but these
should be undertaken by a professional (when possible) to achieve the most
accurate results. In addition, professional wage surveys can sometimes be found
through local employment bureaus or in the pages of trade publications. Job
analysis not only helps to set wages and salaries, but ties into several other Human
Resource functions such as hiring, training, and performance appraisal.

As the job is defined, a wage can be determined and the needs for hiring and
training can be evaluated. The evaluation criteria for performance appraisal can
also be constructed as the specific responsibilities of a position are defined.

wage theory, portion of economic theory that attempts to explain the determination of the
payment of labour.

A brief treatment of wage theory follows. For full treatment, see wage and salary.

The subsistence theory of wages, advanced by David Ricardo and other classical economists,
was based on the population theory of Thomas Malthus. It held that the market price of labour
would always tend toward the minimum required for subsistence. If the supply of labour
increased, wages would fall, eventually causing a decrease in the labour supply. If the wage rose
above the subsistence level, population would increase until the larger labour force would again
force wages down.

The wage-fund theory held that wages depended on the relative amounts of capital available for
the payment of workers and the size of the labour force. Wages increase only with an increase in
capital or a decrease in the number of workers. Although the size of the wage fund could change
over time, at any given moment it was fixed. Thus, legislation to raise wages would be
unsuccessful, since there was only a fixed fund to draw on.
Karl Marx, an advocate of the labour theory of value, believed that wages were held at the
subsistence level by the existence of a large number of unemployed.

The residual-claimant theory of wages, originated by the American economist Francis A.

Walker, held that wages were the remainder of total industrial revenue after rent, interest, and
profit (which were independently determined) were deducted.

In the bargaining theory of wages, there is no single economic principle or force governing
wages. Instead, wages and other working conditions are determined by workers, employers, and
unions, who determine these conditions by negotiation.

The marginal productivity theory of wages, formulated in the late 19th century, holds that
employers will hire workers of a particular type until the addition to total output made by the
last, or marginal, worker to be hired equals the cost of hiring one more worker. The wage rate
will equal the value of the marginal product of the last-hired worker.

Supporters of this theory maintain that the test of an economic theory should be its predictive
power. They hold that the marginal-productivity theory is a guide to long-run trends in wage
determination and applies more generally than the bargaining theory of wages.

Payment of bonus act

Applicability of Act (Sec 1)
Every factory wherein 10 or more persons are employed
with the aid of power or An establishment In which 20 or
more persons are employed without the aid of power on any
day during an accounting year.
 
 
Establishment : Establishment includes departments,
undertakings and branches, etc.
 
Computation of available surplus (Sec.5) : The following
sums shall be deducted from the gross profits as prior
charges, namely:-
(a)  any amount. by way of depreciation admissible in
accordance with the provisions of sub-section (1) of
section 32 of the Income-tax Act, or in accordance with
the provisions of the agricultural income-tax law, as the
case may be:
Provided that where an employer has been paying bonus to
his employees under a settlement or an award or agreement
made before the 29th May, 1965, and subsisting on that
date after deducting from the gross profits notional
normal depreciation, then, the amount of depreciation to
be deducted under this clause shall, at the option of
such employer (such option to be exercised once and
within one year from that date) continue to be such
notional normal depreciation;
(b)  any amount by way of 2[development rebate or
investment allowance or development allowance] which the
employer is entitled to deduct from his income under the
income-tax Act;
(c)  subject to the provision of section 7, any direct
tax which the employer is liable to pay for the
accounting year in respect of his income, profit and gain
during that year;
 
Components of Bonus :- Sec. 2(21) : Salary or wages
includes dearness allowance but no other allowances e.g.
over-time, house rent, incentive or commission.
Separate establishment (Sec. 3) : I profit loss accounts
are prepared and mainland in respect of any such
department or undertaking or branch, then such department
or undertaking or branch is treated as a separate
establishment.
Disqualification and Deduction of Bonus : Sec 1 :
• On dismissal of an employee for fraud; or
• riotous or violent behaviour while on the premises of
the establishment; or
• theft, misappropriation or sabotage of any property of
the establishment; or
• Misconduct of causing financial loss to the employer to
the extent that bonus can be deducted for that year.
 
Computation of gross profits : For banking company, as
per First Schedule. Others, as per Second Schedule.
Eligibility of Bonus : An employee will be entitled only
when he has worked for 30 working days in that year. Sec.
8
Payment of Minimum Bonus : 8.33% of the salary or Rs.100
(on completion of 5 years after 1st Accounting year even
if there is no profit). Sec. 10
 
Eligible Employees: – Employees drawing wages upto
Rs.10000/-  per month or less. For calculation purposes
Rs.3500 per month maximum will be taken even if an
employee is drawing upto Rs.3500 per month. (Sec. 12)
Time Limit for Payment of Bonus : Within 8 months from
the close of accounting year. (Sec. 19)
Set-off and Set-on : As per Schedule IV. Sec. 15
Submission of Return : In Form D to the inspector within
30 days of the expiry of time limit under Section 19.
Rule 5
Maintenance of Registers and Records etc. Sec. 2(21) :
• A register showing the computation of the allocable
surplus referred to In clause (4) of section 2, in Form
A.
• A register showing the set-on and set-off of the
allocable surplus, under section 15, in Form B.
• A register showing the details of the amount of bonus
due to each of the employees, the deductions under
sections 17 and 18 and the amount actually disbursed, In
Form C.
Non applicability of the Act: – Act not applicable to
certain employees of LIC. General Insurance, Dock Yards,
Red Cross, Universities* Educational Institutions,
Chambers of Commerce, Social Welfare Institutions. etc.
Sec.32
 
Penalty : For contravention of any provision of the Act
or the Rules: Upto 6 months or with fine upto Rs.1000.
Sec.28

ESI Act

  The promulgation of Employees’ State Insurance Act, 1948 envisaged an integrated need based social
insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity,
temporary or permanent physical disablement, death due to employment injury resulting in loss of wages
or earning capacity. the Act also guarantees reasonably good medical care to workers and their immediate
dependants.
 Following the promulgation of the ESI Act the Central Govt. set up the ESI Corporation to administer the
Scheme. The Scheme, thereafter was first implemented at Kanpur and Delhi on 24 th February 1952. The
Act further absolved the employers of their obligations under the Maternity Benefit Act, 1961 and
Workmen’s Compensation Act 1923. The benefit provided to the employees under the Act are also in
conformity with ILO conventions.

Introduction
The Employee State Insurance Act, [ESIC] 1948, is a piece of social welfare legislation enacted
primarily with the object of providing certain benefits to employees in case of sickness, maternity and
employment injury and also to make provision for certain others matters incidental thereto. The Act
in fact tries to attain the goal of socio-economic justice enshrined in the Directive principles of state
policy under part 4 of our constitution, in particular articles 41, 42 and 43 which enjoin the state to
make effective provision for securing, the right to work, to education and public assistance in cases of
unemployment, old age, sickness and disablement. The act strives to materialise these avowed objects
through only to a limited extent. This act becomes a wider spectrum then factory act. In the sense that
while the factory act concerns with the health, safety, welfare, leave etc of the workers employed in
the factory premises only. But the benefits of this act extend to employees whether working inside the
factory or establishment or else where or they are directly employed by the principal employee or
through an intermediate agency, if the employment is incidental or in connection with the factory or establishments.

Broadbanding defined
Broadbanding is a job grading structure that falls between using spot salaries vs. many job grades
to determine what to pay particular positions and incumbents within those positions. While
broadbanding gives the organization using it some broad job classifications, it does not have as
many distinct job grades as traditional salary structures do.[1] Thus, broadbanding reduces the
emphasis on ‘status’ or hierarchy and places more of an emphasis on lateral job movement
within the company. In a broadbanding structure an employee can be more easily rewarded for
lateral movement or skills development, whereas in traditional multiple grade salary structures
pay progression happens primarily via job promotion. In this way, broadbanding is a more
flexible pay system. This flexibility, however, can lead to internal pay relativity problems as
there isn’t as much control over salary progression as there would be within a traditional multi-
level grading structure.

[edit] Selection of broadbanding

Broadbanding works better for some organizations than others.[2] Hierarchical and/or risk averse
companies with a preference for well defined policies and procedures would be better served by
a traditional multi-grade structure. Flat organizations that are flexible, have a higher tolerance for
ambiguity, and encourage lateral or cross functional movement would be good candidates for
broadbanding.
Also, implementing broadbands in some countries may be easier than in others. In countries
where promotions and titles are very important socially, companies may need to consider letting
employees use an external business title based on employee age or years of service, that is
different than the job title used for position grading internally. Also, some employees may feel
lost, or not know how to build their careers without a verticle corporate ladder to climb. In this
case, the company will need to be able to give examples to the employees of how lateral
movement can enhance their career opportunities.

For a suitable organization in the right cultural setting, broadbanding can do the following:

• Reward performance more efficiently – as the pay ranges are wide, the company has the
flexibility to reward a star performer, even when they aren’t getting promoted.

• Take the emphasis off of job evaluation – because the number of levels have been reduced,
job evaluation can be streamlined as there aren’t as many distinct grades that need to be
considered when slotting a job into the structure.

• Manage a flexible/mobile workforce – for companies that have staffing needs that change
frequently or are difficult to predict, or work within a business environment that is in flux,
broadbanding offers a program that is easier to maintain than a traditional system with many
distinct levels.

One concern noted by companies that have implemented broadbanding is that compensation
costs may go up. This is due to the wider than normal band taking away that more gradated top
end control on salary levels. This can be effectively managed through the use of market data, in
order to help managers to validate their pay decisions for a particular employee to the external
market before proceeding to give higher than normal pay increases.

Broadbanding, like other grading systems, relies on the buy-in of all key stakeholders including
the business managers, HR managers, and employees. Tailored communication to each of these
groups will go a long way towards ensuring the successful implementation of a broadbanding
program.

The Advantages and Disadvantages of Broadbanding

Broadbanding is the term applied to having extremely wide salary bands, much more
encompassing than with traditional salary structures. Whereas a typical salary band has a 40
percent difference in pay between its minimum and maximum, broadbanding would typically
have a 100 percent difference. Most of the time, creating enormously large bands is done as a
measure to support a restructuring. It combines and consolidates the number of levels or job
grades. This article will discuss the advantages of broadbanding in an overall compensation
strategy, as well as the disadvantages.

How well do your employees understand your compensation plan and philosophy? Simplify how
you explain it to them. Download
"4 Tips for Communicating Your Compensation Plan to Your Employees."
The Advantages of Broadbanding
Streamlines Hierarchy

Sometimes an organization has become too hierarchical for the strategic direction of the
company; finding it has become too slow to react, taking too much time to get information from
the top down and even less effective at getting messages from the lower rungs up to the ears of
senior management. Broadbanding reduces the number of levels or layers within a company.
This is the best face-saving way for an organization to collapse salary ranges and supporting de-
layering. This flattens an organizational structure and reduces the hierarchy.

Facilitates Internal Movement

Whether we like it or not, some great person-to-job matches just do not happen because of the
way a job has been classified or positioned with an assigned salary band. If that new position is
not a lateral or at a higher rung, most rational people will not seriously consider a transfer that
results in a demotion. That is just not a positive step for their career development. With
broadbanding, more internal movement is facilitated, because the probability increases that one’s
current job and alternate position are within the same enormous range of pay. This makes pay
take a back seat and puts forward other attributes of a position, encouraging internal mobility and
potentially more developmental assignments.

Puts Added Trust in Managment

With broadbanding, managers have great latitude to pay what they want to an employee. This
absolutely can reduce the push-pull between the hiring manager and the human resources
organization. Now the issue of pay shifts to the control of the hiring manager and the challenge
of "Does one have enough money in the current budget?" or not. The perception of HR as a
regulating gate keeper to preserve the salary structure diminishes. Managers are entrusted with
greater autonomy.

The Disadvantages of Broadbanding

No Awareness of External Market Rates

Traditional salary structures, when done right, give current information to your management
team about what market rates are. With broadbanding, if a manager wants to pay at the market
midpoint, they are left baffled and guessing. There is no midpoint in a broad band. That also
means the compa-ratio tool can not be used.

May Lead to Inequities

Broadbanding’s flexibility and trust in management may or may not be warranted. In a

broadbanding system, it is relatively easy to have two people with the same responsibilities have
earnings that are thousands and thousands of dollars apart. Broadbanding weakens the linkage
between salary growth and skill development for the next higher-level, since it is so far off as to
not be a motivator. Do you want supervisors and their direct reports in the same pay band? That
can easily happen with broadbanding.

It only takes a few reckless managers rewarding a few individuals inappropriately to have an
entire pay system called into question. Whether your pay system is fair or not fair is not quite as
important as if it is perceived as fair. If your pay system is perceived as not fair, you could see an
increase in EEOC complaints. Did you know the Department of Labor added 700 additional
auditors after the passage of the Lilly Ledbetter Equal Pay Act in 2009? People don’t call and
ask for an audit when they believe their conditions are fair.

Lack of Cost Controls

It certainly may call into question why have salary bands at all if they are so wide. You need to
evaluate if your other cost control training and measures are strong enough to hand over this
much authority and autonomy to your managers. Moving to broadbanding may require thinking
through other incentives that had previously been tied to salary grades, such as bonuses or stock.

Promotions

In my opinion the absolute worst thing about broadbanding is the severe reduction in
opportunities for promotions. Fewer salary bands lead to fewer opportunities to climb to the next
band; meaning fewer promotions to celebrate with family and friends. Think seriously before
you minimize this great motivational tool. If you are committed to moving to broadbanding, yet
this is of concern to you, keep an eye on your turnover rates and conduct exit interviews to
monitor the pulse of why your talent is moving to your competitors.

Conclusion
It is your call whether broadbanding is a tool for use in your organization or not. Broadbanding is
a very effective tool to reduce salary grades or job classifications, but it definitely has its
drawbacks.