How do you justify pay range exceptions for high performers?

1 Assess the performance

The first step to justify a pay range exception is to assess the employee's performance objectively and consistently. You need to have clear and measurable criteria to evaluate the employee's achievements, behaviors, and competencies. You also need to compare the employee's performance with their peers, the market, and the expectations for their job level and role. You should document the performance assessment and provide feedback to the employee regularly.

2 Consider the alternatives

Before granting a pay range exception, you should consider the alternatives that could reward and retain the high performer without increasing their base salary. For example, you could offer variable pay, such as bonuses, commissions, or stock options, that are tied to the employee's results, goals, or performance indicators. You could also offer non-monetary rewards, such as recognition, development opportunities, flexible work arrangements, or additional benefits, that align with the employee's preferences, values, or motivations.

3 Review the impact

If you decide to grant a pay range exception, you should review the impact of your decision on the employee, the team, the organization, and the market. You should consider how the pay range exception will affect the employee's motivation, engagement, and career progression. You should also consider how the pay range exception will affect the team's morale, cohesion, and performance. You should also consider how the pay range exception will affect the organization's compensation strategy, budget, and culture. You should also consider how the pay range exception will affect the market's competitiveness, trends, and benchmarks.

4 Communicate the rationale

The final step to justify a pay range exception is to communicate the rationale behind your decision to the employee, the team, and the relevant stakeholders. You should explain the reasons, criteria, and evidence that support your decision. You should also explain the expectations, responsibilities, and consequences that come with the pay range exception. You should also explain how the pay range exception aligns with the organization's compensation philosophy, policy, and practice. You should also address any questions, concerns, or feedback that may arise from your decision.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?