At Home Depot Inc, senior systems engineers with deep expertise in Unix may find themselves leading projects one month and playing a Java trainee role on their next endeavour. They aren't demoted, they don't take a pay cut, but they do acquire new skills. And that's what CIO Ron Griffin says he wants.
This career system is called "broadbanding", a human resources pay and compensation structure that's catching on in information technology departments. Broadbanding gives Griffin and his team the flexibility to staff employees on projects that will broaden their technical and managerial skills. "It de-links title from responsibility" and encourages continuous learning, Griffin says.
Broadbanding got its start in the late 1980s as a cure for the complex systems of job grades that were in place at most large companies. It wasn't uncommon to see companies manage 70 job grades and equally complex pay structures. For a specific grade, a salary could be increased by only 50 per cent of the original baseline. For example, a networking specialist who started at $20,000 could increase his salary to a maximum of $30,000 without being promoted.
For employees to make more money, companies handed out meaningless promotions or forced skilled experts to move into management. Human resources departments established intricate formulas for calculating pay scales and determining the level of new jobs.
Because companies feared overpaying their employees, human resources departments regularly surveyed the market to assure management that no one received too much money.
But the unwieldy grade system isn't suitable for today's IT. Job responsibilities need to correlate to the knowledge and expertise of employees, regardless of titles. Competency-based pay and promotions systems (such as broadbanding) work particularly well for IT groups.
Broadbanding breaks the bond between a job title and an established set of responsibilities. It reduces the number of both pay scales and job levels and puts them in "bands". For example, a company decides which areas of expertise matter most, such as networking or systems architecture. Then it establishes bands that encompass a number of job titles and pay scales.
The result is that an employee can move across areas of expertise while continuing to earn more money. In fact, horizontal movement is encouraged. Having a breadth of skills becomes the criteria for promotion.
Home Depot has had the broadbanding system in place for 10 years. According to Paul Hoebeman, vice president of information systems, the structure has de-emphasised the importance of titles to the point where employees don't consider them as they change roles and responsibilities.
"When employees want to learn something new, they play to the level (on that project) that they're capable of," Hoebeman explained. But the broadbanding system doesn't come without its pitfalls.
In a broadbanding system, every project requires evolving expertise. You might one day manage a younger employee who could be teaching and leading you on the next project.
Matching pay to responsibility
On the surface, implementing broadbands sounds easy: get rid of some management layers and increase the pay spectrum for those who remain. It isn't that simple, roadblocks can include:
* Companies often forget that they must still define ways of awarding salary increases. If you remove the step-level promotions, what criteria will be used to judge progress?
* Career management in a broadbanding system isn't straightforward. Employees will have fewer significant promotions and must think about managing their careers differently.
Take care in how you benchmark salaries to the market. The point isn't to evaluate pay by the market's standards, but rather by the employee's abilities.
Developing and implementing a structured training programGartner recommends that a structured training program address not only immediate job needs but also career development and opportunities to attend outside industry events and seminars. This is crucial to address employee concerns over their ability to learn and work with the latest technologies and applications, according to the reseracher.
Developing and implementing a structured training program can be outside the experience of many IT managers. A starting point to ensure skills develop in line with corporate goals include the following:
* Assess skills requirements: Identify from your IT plans the skills your organisation will need to move forward. Using one-on-one interviews, formally identify the skills your staff already have...and those they may need or want to develop further.
* Identify skills sources: Locate potential internal and external sources of the skills required by your staff. This can involve assigning internal 'technical mentors' who have the experience and communications skills to pass their knowledge on to others as well as looking at external seminars and events, publications and training organisations who can provide the skills required.
* Analyse costs and benefits: Measure the cost effectiveness of your current training methods. Do they address the skills required by staff? Are there better alternatives?
* Structure training programs: Build a basic training requirements program that can be used to refresh the core skills required by staff and quickly bring new recruits up to speed.
* Work with each staff member to custom-develop a training program for specific job and career needs. Use this to create buy-in for the company's training strategies and stress the career, compensation and skills acquisition opportunities to participating staff.
* Promote success: When staff members complete a level of training ensure their achievements are promoted within the company using the in-house newsletter or bulletin board.