Riding the compensation bandwagon.

When you walk through your company's offices, do you notice flip charts filled with scribbles? When you meander into your cafeteria, do you see long tables with employees from all departments easily mingling at lunchtime, as opposed to small tables, where employees cluster into their cliques?

If you answered yes to either question, you're probably part of a creative organization, one that has adopted a work philosophy that looks outside the company toward the shareholder. You're also a prime candidate for broadbanding.

Just what is broadbanding? Making the news in compensation lately, it's a technique for grouping employees within broad salary ranges based on their common job characteristics. "For instance," explains Dan Gilbert, a compensation consultant at General Electric, which is considered a master of the concept, "a supervisor on a factory floor may think in a timeframe of a week, while a plant manager may think m a one- or two-year timeframe." So, for the sake of compensation, the company can "band" together all of the positions that work within similar timeframes. Characteristics, other than timeframe, that you can use to group employees are knowledge and job importance, says Gilbert.

The point is to push every employee to constantly improve, and often that means making a lateral career move. In fact, that's how the process started at GE. Managers at GE Plastics discovered their employees were rejecting moves into new areas simply because "the position level of the proposed role sent the wrong message," Gilbert explains. The new jobs didn't have the status connotation of moving up the corporate ladder. GE was convinced that this hierarchical mentality was strapping the company because good people wouldn't take jobs that were perfect for them and would help the company grow.

Today, trader CEO Jack Welch's watchful eye, GE has trimmed down to seven compensation bands, instead of the typical 15, and managers now supervise 15 or more employees, instead of three or four. All of the firm's executives are working under the broadbanding system (although GE prefers to call the new salary ranges "career bands"), and by the end of this year, 10 of GE's 12 businesses will have all of their exempt employees broadbanded. Two of the businesses have even integrated their nonexempt employees.

To ease employees into the new system, GE publishes a career band guide -- or a "create-your-job" manual, as Gilbert refers to it -- that explains the concept of broadbanding and gives examples of the type of work employees are doing within each band.

Many firms are testing the broadbanding waters or at least toying with the idea. In a recent survey of some 3,400 companies, by employee compensation consulting firm William M. Mercer Inc., nearly one-third of the respondents say they're already using broadbanding or are considering using it.

And GE's broadbanding success story is getting around. According to Gilbert, the company gets "lots of requests" from other firms to benchmark the process. And GE is happy to share what it's learned.

But experts warn that not every company is a good candidate for broadbanding. If you need structure and certainty in your pay system, you may not be able to make the change. For instance, compensation executives at Philip Morris, which scatters 365 executives across 17 grades, isn't convinced the concept will work for them. They're holding off until more evidence is in.

The cost of broadbanding? In dollars, no more than any other compensation system, says Gilbert. But, he adds, your managers should be prepared to devote more time to making this system work, since they'll need to put a lot of thought into how much an employee is worth to the company, instead of automatically moving someone up the career ladder onto another compensation rung.

WHY DON'T COMPUTERS AGE WITH GRACE?

If you think you're paying taxes that are too high on a piece of computer equipment you bought, say, three years ago, you should take a closer look at how those taxes are calculated. You may indeed be paying too much, warns Michael H. Lippman, partner and national director of state and local tax technical services at KPMG Peat Marwick.

For instance, financial institutions, which frequently invest in sophisticated software that quickly becomes obsolete, often get caught at tax time. "One year after they buy the software, it's not worth the price they paid for it," Lippman explains.

Other high-risk organizations are telecommunications companies, high-tech firms that develop hardware and software, health-care firms that use high-tech equipment and manufacturers that are highly automated, but any company that uses a large amount of computer software and hardware should beware.

To come up with your taxes-due amount, most states follow statutes that direct them to value your property at market value, or the "true value in money." In this case, says Lippman, a state tax official doesn't visit your company and appraise your computer assets to come up with the value. Instead, the tax office asks you to report the value of the equipment at its original cost and to record the year in which you bought it. Then the office computes the property value that it ultimately will tax by using standard depreciation tables.

The problem, says Lippman, is "there's generally a floor to the amounts |that appear on the table~, so you can go only so low." That's why he advises corporate taxpayers to question the depreciation tables when they think their taxation is too high.

Before you accept an inflated value, he says, investigate your options. First, try to negotiate with the local assessor. If that doesn't work, move on to making an administrative appeal. And, as a last resort, go into litigation.

The latter may sound a bit of an overreaction, but it does work -- and you won't be alone. Some big-name corporate taxpayers have been fighting back. For instance, in Michigan courts, IBM won a case in which it asked for a lower valuation of its computer property based on out-of-step depreciation tables, as did Telecommunications Industries in a Virginia court. But other firms protesting high property taxes on obsolete equipment have been sent home without relief, Lippman admits, because the states refused to swerve from their established depreciation formulas.

THE VAGARIES OF VIETNAM

When a crop of some 70 million new customers is placed invitingly on your step, you want to open the door and welcome them in. That's exactly what's happened as the United States recently lifted its trade embargo against long-time adversary Vietnam. After all, business is business, and the tired taboos have all but disappeared.

But business may not be business in Vietnam, at least not business as Corporate America knows it.

Tim Tien-Chun Chang, an associate with Cummins & White, a Los Angeles law firm, warns that, without an integrated national transportation system, the infrastructure in this new business frontier is "still quite primitive." But, he quickly adds, the World Bank does plan to sink $300 million to $350 million a year into general economic development in Vietnam, and the Asia Development Bank intends to follow suit with $600 million for 10 new infrastructure projects in 1994.

Will that be enough for a start? Chang isn't sure, because so many other areas critical to deal-making are problem-filled in the country. Here are some examples based on his experience there:

* While North American businesspeople consider a memorandum of understanding, or MOU, an important first part of the agreement process, the Vietnamese think of it more as a handshake, "an initial step to lock all the parties in to the negotiation process" says Chang. That's why they're often quick to sign it and later may downplay its contents.

* The Vietnamese government must approve every foreign investment, and before it will even consider an application for another country to do business there, officials want to review a feasibility study of the project. Unlike the U.S. version of a feasibility study, complete with economic analysis, this document must include an explanation of the company's structure, names and nationalities of its officers, a detail of the allocation of profits and the types of government assistance it will need.

* What's more, Vietnamese government officials often sit in on negotiating sessions and even make their opinions well known. That's why it's a good idea for a foreign investor to insist up front that these officials have no voting power, Chang suggests.

* The Vietnamese company's contribution to a joint venture is typically land, because companies there lack hard currency. But the value of the land is often inflated by the local administrative land office, despite price ranges established by the Vietnamese Ministry of Finance.

* Because the Vietnamese salary scale is so unlike that of the United States -- some reports place the average annual income in Vietnam at under $200 -- if you're investing in the country, you need to make sure your Vietnamese counterparts buy into the exact wages of your expatriates and understand that the salaries are billable to the joint venture, not to your firm.

Not surprisingly, despite the potential snags, more than 300 U.S. companies already have applied to do business in Vietnam, and more are sure to follow. Pepsico is setting up shop there, as is American Express and United Airlines. Others wanting to wade in include Caterpillar, General Electric and ITT.