Salary Caps: How To Retain An Employee That’s Reached The Top of The Pay Scale
by Christina Carmona
Employees who are earning the maximum compensation for their pay range are often highly valued top performers and retaining them in today’s competitive market is challenging but critical. Start by ensuring that the employee understands the big picture. Being transparent with employees will improve trust, which can boost retention. Communicate the compensation practices of your company, including how salary ranges are developed and how pay increasesare decided.
Below are several examples an employer can take in this situation:
- Provide a lump-sum bonus instead of a pay increase. This provides additional compensation and recognition but keeps an employee within the salary range.
- Provide opportunities to advance. Offer stretch assignments (a project or task that’s currently beyond their level of knowledge/skill), cross-training (training the employee in more than one role or skill) and learning and developing benefits that fit the employee’s career interests and the company’s needs.
- Develop plans for numerous different career paths that allow the employee to move either vertically or horizontally within the company.
- Offer other nonmonetary benefits, such as flexible work arrangements, additional paid time off, opportunities to train other employees in their functional area, or the ability to attend a work conference at a desirable location.
- Recognize an employee’s contributions by providing regular feedback, recognition and other positive forms of reinforcement.
In general, it’s a great idea to review pay structures on a regular basis to ensure that all employees are paid at levels comparable to those for similar positions in the market.
Ultimately, retaining employees in a volatile market is critical regardless of where they are in the pay range for their position. Developing an open and transparent culture, offering competitive pay and benefits, and rewarding employees fairly will help improve employee retention.
Source: SHRM Magazine