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Broadbanding is the adoption of a job classification structure with significantly fewer classifications than a traditional system. It aims for the de-layering of organizations by combining several salary grades or job classifications with narrow pay ranges into one band with a wider salary spread. Under a typical broadbanding plan, jobs are grouped into broad occupational families, based on similarities in attributes such as the tasks performed, required skills, career progression, and the work process. These groups form the basis of new, "broader" classifications. The combining of job classifications often, but not always, reduces the number of pay grades and increases the range between the bottom and top rates of each grade.
In a typical pay plan, job classifications are grouped into pay grades. Advancement from the bottom to top step within a pay grade is determined by seniority, occurring at regular intervals until the top step is reached. In a broadbanded pay plan, pay grades still exist, though there will likely be fewer of them and the range from the minimum to the maximum rate of a grade will likely be greater. Movement within the grade may be determined not only by years of service but in conjunction with other factors like the acquisition of new skills or demonstrated ability to perform higher level work.