What is a job grade?
Job grade is defined as the dividing up of the rank order of jobs in a consistent and logical way to group jobs of a broadly similar size for the purpose of administering salaries and benefits.
Grade structures need to reflect the following:
Job Grading Options
The preferred method of developing a grade structure is to apply appropriate breaks in the hierarchy which separate clusters of similar jobs.
There are typically 3 options for consideration:
In selecting a preferred structure review the rank order of evaluations in a consistent and logical way and group those of a broadly similar size within the same grade for the purpose of administering salaries and benefits. CEO is typically kept out of the grading structure.
Broad Banding versus Narrow Banding
The Features of Broad Banding are:
The Features of Narrow Banding are:
Broad Bands can incorporate two or more Narrow Bands - managing a Broad Banded structure requires well trained staff and a reasonably sophisticated performance management system to avoid employees ‘drifting up the band’.
Grade Option Comparison
Narrow Band Advantages:
Narrow Band Disadvantages:
Broad Band Advantages:
Broad Band Disadvantages:
Mixed Model Advantages:
Mixed Model Disadvantages:
Best Practice Approach
An analysis of the approaches taken by major organizations reveals that the Mixed Model best meets organizational and cultural criteria.
Typically, the rationale behind the mixed model approach is to group those jobs that report directly to the top job in an organization (CEO, General Manager etc.) in to either 1, 2 or 3 broad bands.