In an organization, the employees are usually grouped based on their roles and responsibilities. Such grouping is called the Organization Banding. Different employees have different levels of responsibility. Bands are essential for planning and communicating. Banding involves creating a characterized range within which candidates are treated the same. Organization Banding Policy explains what is needed to simplify behavior based on the organization’s culture and what it takes to develop or reconstitute its culture to fit with the 21st century’s needs and flourishing global perspectives. These will be used as guidelines in developing continuous concepts to maneuver assessments, training, and transformation processes of an organization. It does not have as many well-defined job grades as conventional salary structures do. Thus, it reduces the importance of ‘status’ or hierarchy and emphasizes on lateral job movement within the company.
In this structure, an employee can be more easily rewarded for lateral motion or skills development, whereas in traditional multiple grade salary construction, pay progression happens mainly via job promotion. In this way, it is a more flexible payment system. However, the flexibility can lead to internal pay comparison problems as there is not as much power over salary progression as there would be within a traditional multi-level grading job (structure). This Policy contains the terms and grades that are appropriate for organizational banding.