There are employers who have a limit to the percentage increase they provide to employees who are promoted. The most common one that I find at employers is 10%.

Why?

If Barb needs a 16.7% increase to be paid competitively and equitably in the new job’s base salary range, why wouldn’t you give her that pay increase?

If you only give her 10%, then she is 6.7% below where she should be in the new pay range. And in say 12 months she will be 10% or more below where she should be paid.

You’re just digging the pay inequity hole deeper and deeper by doing this.

Eliminate the percentage limits you have on promotional increases.

Set the starting pay for an employee who is promoted at the right level in the base salary range.

And if it is a 50% pay increase or more then you know you have problems setting base pay for new hires.

#pay #rewards #hr #humanresources #promotions #compensation #payincrease #payequity #paytransparency #basesalary #salary #newhires