HRSINGAPORE Community Discussions
Executive Staff Hitting Maximum Salary Range
Dear HR Professionals,
We have several executives and a few managers hitting the maximum salary range now. May I know if your Company continues to give them the annual increment or freeze the pay and give a lump sum and if so, how you work that lump sum? Any other practices?
Salary ceiling is there for the cap purpose. A lump sum can be given as a performance bonus, which could vary. Other perks could be share option for a listed company or even free company car welfare.
When an officer hits the salary ceiling, the straightforward answer is to freeze their pay.
We understand the company's need to control salary growth. However, if we take a rigid approach, the company may end up losing top performers and talents. Since a few managers are affected as in your case, assuming the company values them and wishes to retain them in service while maintaining their motivation level, I would suggest addressing the situation with a mix of alternative reward solutions or career progression discussions. If it is within your capacity, you could propose for an evaluation of the salary range for the whole organisation; as when many employees reach the ceiling in one year, there may be a case of dysfunctional salary system.
Staff reaching max salary will have the salary frozen for 2 years and given a lump sum. The lump sum is calculated based on a matrix of all staff salary against market info and the further out of range, the more the percentage becomes smaller. On the 3rd year, the lump sum percentage is given as an increment and the freeze takes place again after until the staff moves to another position that warrants an increase against the market median.