By law, pay practices may not discriminate; they must be administered consistently, not arbitrarily. Yet pay policy must be designed with flexibility to recognize and reward employees at various stages of development, or employees who fulfill key jobs.

For example, a company might decide to pay a market median rate for most jobs and an aggressive rate for jobs that are especially difficult to fill and important to achieving business success. Such a company may determine the necessity to pay its “hot skills” jobs at the 75th percentile and the rest of its employees at the 50th percentile.

Legal rulings regarding discrimination often center on the principle that it is more egregious to violate and be inconsistent with your own pay policy than it is to be noncompliant with the law.