Source: Joanne Sammer, HR Magazine, Vol. 63 no. 2, March 2018
Consider offering creative incentives—and a bit of career counseling. ….
Just as there is a maximum amount that Stephen Curry can earn as a star point guard for the Golden State Warriors, there is a limit to how much Stephen Brown can make as Accountant I. That’s because both the National Basketball Association and the typical U.S. company put ceilings on the salaries they pay.
But while it’s safe to assume that Curry will be satisfied with his financial future even as he tops out of his range, Brown may be less enthused. Unless there’s an opening available for an Accountant II, there’s no obvious way for the second Stephen to continue to grow financially at his employer. That could lead him to feel stuck and, ultimately, to initiate his own trade—to another company.
Until there is more pressure to expand the money companies set aside to boost salaries, cost-of-living adjustments may not be enough to provide individuals like Brown with a significant pay increase. Of course, your organization needs to control salary growth, but don’t be penny-wise and pound-foolish by taking a rigid approach, losing top performers in the process, say compensation experts. Instead, address these situations with a mix of alternative reward solutions, proactive career discussions and, in some cases, evaluations of how closely pay is tied to the market.
This is especially critical today, as employees and job seekers have access to an unprecedented amount of pay-related information through social media and other online channels, and many are reading reports of companies raising pay in light of the corporate tax overhaul. An employer that appears to be limiting a worker’s earning power will likely struggle to hire and keep talented people, especially as the economy continues to perform well and the job market tightens. You need to be prepared to explain why a person’s pay may be limited after hitting the top of the pay range—and you must do it well…..