An employee who meets expectations and whose salary falls within the bottom level of the pay range requires a substantial increase to move the salary closer to the middle level of the range. By contrast, an employee who needs improvement and whose salary falls within the middle level typically would not receive an increase until either performance improved or the bottom level of the pay range increased to the employee’s level through normal salary movements. An employee whose performance rating coincides with the placement of his or her pay with in the market range would receive an increase that approximates annual pay trends to maintain the appropriate placement.

In cases where an employee’s pay approaches or reaches the upper limit of the pay range for a given job, employers may do the following:

• Freeze base pay at the maximum for the range. Additions to an employee’s base pay would then occur only if the pay range moves up.
• Reward performance in the form of lump-sum payment, but do not add to base pay.
• Slow pay growth as the salary approaches the range maximum by giving smaller increases to base than performance would indicate.
• Slow base pay growth by rewarding performance through a partial merit raise added to base with the remainder paid as a lump sum. Employers may also outline ways for employees at the upper limit of a job to earn a promotion to another job with greater value and higher base pay.