Grade-banding represents a break from the conventional salary management practices that have prevailed since World War n. Interest in this innovative compensation practice is rising in both the private and public sectors and has been prompted in part by a paradigm shift toward greater flexibility, flatter organizations, and increased managerial control of and accountability for traditional human resource functions. Grade-banding has been tested in the federal government since 1980 and has more recently been adopted in the private sector. This article reviews the experience with banding and discusses the implications of shifting to a banded structure.
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