Adjusting Pay Ranges

agill · August 2007

We adjusted our pay grades and ranges in 2000 and now I'm wondering whether we should do this again. Senior Management has pushed against this saying that it will lead people who are at the top of their range to think that they should have an adjustment. Does anyone have some suggestions on how to approach this?

californian · August 2007

It is a good idea to stay on top of rate range/COL changes in your area. If you wait too long, the changes necessary to stay competitive are pretty dramatic. Of course, just because an employee is at the top of their range does not mean that they "deserve" an adjustment. If you explain the range concept, and the requirements for moving on to a higher point in the range (or another rate range level), i.e., different job, more responsibility, etc.), you can decrease the expectation that a rate range change will automatically result. I agree, there will be some who expect a change, but if you manage those expectations by explaining the process, you are less likely to have disappointed employees.

IrisD · August 2007

Looks like you have a case of "pay compression," which ironically often results when you have a number of long-term employees at the top of a pay range--the result of good retention practices and employee loyalty!

If upper management doesn't want employees at the top of the range to think they "deserve" an adjustment, do they want them to leave and go to the competition? Or are they ready to do some promotions and bring in replacements at the lower end of the range?

They may have to bite the bullet and make adjustments to the range; perhaps breaking up increases into 6-month increments to keep them from being "dramatic." Or give the high performers 5 percent and the lower performers 2 percent to balance things off.

Remember to give any of your suggestions a positive "spin" with management.

ntk104 · October 2007

I agree that biting the bullet and making some adjustments might be a good idea. Have the people at the top of the range done anything to promote themselves (taken classes, gone to seminars, come up with innovative ideas)? Are these people trying to improve themselves and move onto the next level or are they comfortable where they are? Perhaps they need some suggestions on how to improve what they do and some counseling as to why they are at the top of the level and haven't moved on.

I'm assuming that monetary changes have been made to each range since 2000.

I totally agree on putting a "positive spin" on how any suggestions are made.

wringo · October 2007

I would like to say that my company is small and it is time to adjust our pay ranges and my boss has no interest in adjusting them. We normally do a cost of living adjustment every two years to the pay ranges. We do not necessarily give raises, we just adjust the ranges and if someone is at the top of their current range it gives them the opportunity to be eligible for an increase sooner. In answer to the above, the long term employees do not always have opportunities to move up as there is nowhere to move up to if you are in a one person department. Everyone in our office contributes to the success of our company. You stunt the growth of a long term employee when they are not eligible for a raise for 18-24 months. Very bad for morale. I have always used our state and area COL on the workforce commission's website for the percentage of increase to salary ranges.

srallen · October 2007

I think that is good to do a wage survey to see if you are still competitive. If not, then you may consider making an adjustment. This is usually a very good way to persuade upper mgmt that an adjustment is necessary. You need to remain competitive. However, just because you adjust the scale does not mean that everyone gets a raise. It just opens up the upper end for them.

Adjusting Pay Ranges

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