Society For Human Resource Management (SHRM) Certified Professional Practice Exam

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Study for the SHRM Certified Professional Exam with flashcards and multiple choice questions. Each question includes hints and explanations to help you understand key HR concepts. Prepare for your certification with confidence!

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What is a key feature of broadbanding in pay structures?

Reduces the number of pay grades
Increases promotion opportunities
Links salaries strictly to performance
Standardizes pay across all levels

The correct answer is: Reduces the number of pay grades

A key feature of broadbanding in pay structures is its ability to reduce the number of pay grades within an organization. By consolidating multiple narrow pay grades into a few broader bands, broadbanding allows for greater flexibility in how employees are compensated. This streamlined approach simplifies the pay structure, making it easier for HR to manage compensation while providing employees with a clearer understanding of salary ranges and potential for advancement within the organization. It fosters career development and mobility by allowing employees to progress in their roles without being constrained by tightly defined pay grades. This reduction in complexity helps organizations respond more effectively to market changes and internal equity considerations.