WEBVTT
00:00:00.320 --> 00:00:12.400
Welcome to What the Comp, the Pay Strategy podcast, where compensation stops being confusing and starts making sense for real organizations.
00:00:13.119 --> 00:00:18.399
I'm Jennifer Loftus, National Director at Astron Solutions.
00:00:18.800 --> 00:00:30.800
And today we're talking about retention adjustments and why fixing pay reactively can sometimes make compensation problems worse.
00:00:32.000 --> 00:00:33.520
Here's the truth.
00:00:33.840 --> 00:00:37.359
Retention adjustments often feel like solutions.
00:00:38.159 --> 00:00:44.320
Someone is underpaid, someone is unhappy, someone may leave.
00:00:44.960 --> 00:00:48.000
Someone's manager is worried.
00:00:48.719 --> 00:00:53.039
The organization then adjusts the employees' pay.
00:00:53.840 --> 00:00:58.240
And in the moment, that can feel like the right thing to do.
00:00:59.039 --> 00:01:02.240
Sometimes it is the right thing to do.
00:01:02.560 --> 00:01:04.000
But here's the problem.
00:01:05.200 --> 00:01:13.920
When pay is fixed only after there is pressure, the organization is no longer managing compensation.
00:01:14.799 --> 00:01:17.920
It is reacting to compensation.
00:01:18.719 --> 00:01:22.799
And reactive compensation is expensive.
00:01:23.840 --> 00:01:25.760
It is inconsistent.
00:01:26.480 --> 00:01:28.719
It is hard to explain.
00:01:29.359 --> 00:01:36.159
And over time, it can create the very problems it was meant to solve.
00:01:37.040 --> 00:01:44.000
If you're in human resources, finance, or leadership, you've probably seen this pattern.
00:01:44.719 --> 00:01:47.040
An employee raises a concern.
00:01:47.359 --> 00:01:48.959
Maybe they're below market.
00:01:49.920 --> 00:01:52.560
Maybe they are paid less than their peers.
00:01:53.200 --> 00:01:56.000
Maybe their responsibilities have grown.
00:01:56.959 --> 00:01:59.760
Maybe they found salary data online.
00:02:01.359 --> 00:02:04.079
Maybe a recruiter contacted them.
00:02:05.120 --> 00:02:07.519
Maybe they're frustrated.
00:02:08.319 --> 00:02:11.840
Maybe the manager is afraid they will leave.
00:02:12.639 --> 00:02:15.919
So the organization reviews the situation.
00:02:17.199 --> 00:02:22.319
And often the review shows that there is a real issue.
00:02:22.719 --> 00:02:26.080
The employees' pay may need an adjustment.
00:02:26.560 --> 00:02:28.960
Their pay may be misaligned.
00:02:29.360 --> 00:02:31.439
Their role may have changed.
00:02:31.680 --> 00:02:36.560
Their range placement may not make sense anymore.
00:02:38.240 --> 00:02:44.560
The concern may be valid, but the bigger issue is this.
00:02:45.520 --> 00:02:54.000
Why did the organization discover the problem only after the employee became a retention risk?
00:02:54.960 --> 00:02:59.280
That is where retention adjustments become complicated.
00:03:00.479 --> 00:03:09.680
Because the adjustment may help one person, but it also may reveal that the system is not catching problems early enough.
00:03:10.639 --> 00:03:16.639
And when the system does not catch problems early, employees learn to escalate.
00:03:17.199 --> 00:03:19.360
Managers learn to push.
00:03:19.840 --> 00:03:22.319
Leaders learn to intervene.
00:03:22.719 --> 00:03:26.240
And pay decisions become reactive.
00:03:27.680 --> 00:03:32.159
So why do retention adjustments sometimes make things worse?
00:03:33.120 --> 00:03:36.879
There are a few patterns we see consistently.
00:03:37.680 --> 00:03:51.120
The first issue is that reactive adjustments reward visibility, not necessarily need, not necessarily equity, not necessarily contribution.
00:03:52.240 --> 00:03:53.520
Visibility.
00:03:54.080 --> 00:03:57.759
The employee who speaks up gets reviewed.
00:03:58.159 --> 00:04:01.919
The manager who escalates gets attention.
00:04:02.639 --> 00:04:06.719
The department with the loudest concern gets movement.
00:04:07.680 --> 00:04:11.599
The person with an outside offer gets urgency.
00:04:12.319 --> 00:04:18.160
The employee who quietly keeps working may not get reviewed at all.
00:04:19.439 --> 00:04:22.720
It's the proverbial squeaky wheel situation.
00:04:23.680 --> 00:04:36.079
That creates risk because compensation should not depend on who complains first, who negotiated hardest, or who has the most influential manager.
00:04:36.800 --> 00:04:41.920
But in reactive systems, that is often what happens.
00:04:43.360 --> 00:04:48.480
The second issue is that retention adjustments can create new compression.
00:04:49.199 --> 00:04:53.920
An employee receives a pay increase to address retention risk.
00:04:54.240 --> 00:05:03.199
But now they may be closer to or even above the pay of peers with similar or greater responsibility.
00:05:03.519 --> 00:05:08.639
Or they may leap ahead of the pay of someone with more experience.
00:05:09.439 --> 00:05:15.040
Or they may move into a place in the range that is difficult to explain.
00:05:15.759 --> 00:05:19.040
And now the organization has a new issue.
00:05:19.600 --> 00:05:25.279
It fixed one employee's pay, but created questions for others.
00:05:26.079 --> 00:05:33.680
That does not mean the adjustment was wrong, means the adjustment should not be viewed in isolation.
00:05:34.800 --> 00:05:40.000
Every pay change affects the system around it.
00:05:41.519 --> 00:05:47.759
The third issue is that retention adjustments often skip root cause analysis.
00:05:49.120 --> 00:05:53.600
The organization asks, how much do we need to adjust?
00:05:54.240 --> 00:05:58.879
But it may not ask, why did this happen?
00:05:59.360 --> 00:06:02.879
Was the employee hired too low in the range?
00:06:03.680 --> 00:06:05.519
Did the market move?
00:06:06.000 --> 00:06:08.800
Did job responsibilities change?
00:06:09.519 --> 00:06:12.079
Was the salary range outdated?
00:06:12.480 --> 00:06:15.439
Was the promotion increase too small?
00:06:16.319 --> 00:06:19.920
Did manager discretion create inconsistency?
00:06:21.120 --> 00:06:24.480
Did performance pay fail to differentiate?
00:06:25.120 --> 00:06:29.360
Did we ignore the issue during the last review cycle?
00:06:30.319 --> 00:06:33.279
Those root cause questions matter.
00:06:34.000 --> 00:06:41.920
Because if you do not know why the pay issue happened, you cannot prevent it from happening again.
00:06:44.079 --> 00:06:48.720
The fourth issue is that reactive adjustments can weaken trust.
00:06:49.759 --> 00:06:59.519
This may seem surprising, because pay increases usually make people happy, at least at first.
00:07:00.879 --> 00:07:04.639
But employees also pay attention to process.
00:07:06.000 --> 00:07:13.199
If they believe pay only changes when someone threatens to leave, trust weakens.
00:07:14.319 --> 00:07:20.879
If they believe fairness depends on escalation, trust weakens.
00:07:22.240 --> 00:07:28.879
If they believe quiet loyalty is overlooked, trust weakens.
00:07:30.079 --> 00:07:37.519
If they believe managers have to fight behind the scenes to get action, trust weakens.
00:07:38.720 --> 00:07:46.879
And once employees believe the process is inconsistent, even good pay decisions can feel suspicious.
00:07:48.399 --> 00:07:55.120
The fifth issue is that retention adjustments can become a substitute for compensation planning.
00:07:56.079 --> 00:07:59.040
This is one of the biggest risks.
00:08:00.079 --> 00:08:07.360
Instead of reviewing pay proactively, the organization handles issues one by one.
00:08:08.560 --> 00:08:22.399
A retention adjustment there, a market correction over here, an exception over there, a special increase for one department, a one-off fix for a critical employee.
00:08:23.839 --> 00:08:32.480
Each decision may make sense individually, but together they can pull the compensation system apart.
00:08:33.600 --> 00:08:36.399
The structure starts drifting.
00:08:36.960 --> 00:08:40.320
The budget becomes harder to predict.
00:08:40.879 --> 00:08:44.080
Managers expect exceptions.
00:08:45.039 --> 00:08:48.320
Employees expect negotiation.
00:08:49.360 --> 00:08:52.480
Human resources becomes the referee.
00:08:53.039 --> 00:09:00.960
Finance becomes the gatekeeper, and leadership wonders why compensation feels so difficult to manage.
00:09:02.240 --> 00:09:10.559
It feels difficult because the organization is fixing symptoms instead of managing the system.
00:09:12.799 --> 00:09:14.480
Here's the key point.
00:09:14.960 --> 00:09:22.879
Retention adjustments are not bad, but reactive retention adjustments are risky.
00:09:23.840 --> 00:09:35.679
Because when pay only gets fixed after pressure builds, the organization sends the message that the system does not work until someone pushes it.
00:09:36.240 --> 00:09:39.360
And that message is hard to undo.
00:09:40.720 --> 00:09:42.320
So what do you do?
00:09:42.720 --> 00:09:46.000
Because sometimes adjustments are necessary.
00:09:46.559 --> 00:09:50.480
The goal is not to avoid every retention adjustment.
00:09:51.200 --> 00:10:00.720
The goal is to make sure retention adjustments are part of a structured process, not a crisis response.
00:10:01.840 --> 00:10:07.200
Starting Monday, track every retention adjustment.
00:10:08.000 --> 00:10:09.679
Who received it?
00:10:10.080 --> 00:10:10.720
Why?
00:10:11.679 --> 00:10:13.679
How much was the adjustment?
00:10:14.000 --> 00:10:15.600
Who approved it?
00:10:16.240 --> 00:10:18.720
What role are they in?
00:10:19.279 --> 00:10:20.720
What department?
00:10:22.159 --> 00:10:23.360
What manager?
00:10:24.879 --> 00:10:27.679
What was the stated risk?
00:10:28.480 --> 00:10:33.039
What was the root cause for the retention adjustment?
00:10:34.000 --> 00:10:45.279
Because if you are not tracking retention adjustments, you cannot see whether they are isolated or becoming your compensation strategy.
00:10:46.480 --> 00:10:52.480
Starting Monday, review the employees around the adjustment.
00:10:53.440 --> 00:11:07.919
Before making the change, look at peers, team members, range placement, tenure, performance, skills, competencies, and internal equity.
00:11:08.559 --> 00:11:16.960
Because fixing one person's pay without reviewing the surrounding group can create the next problem.
00:11:18.320 --> 00:11:24.799
Starting Monday, separate retention risk from pay misalignment.
00:11:25.600 --> 00:11:29.759
Those are related, but they are not identical.
00:11:30.320 --> 00:11:51.360
An employee may be a retention risk because of pay, or because of workload, or because of their manager, or because of lack of growth, or because of burnout, or because of flexibility, or because they do not see a future.
00:11:52.480 --> 00:11:58.720
If the problem is not really pay, a pay adjustment may not solve it.
00:11:59.039 --> 00:12:01.440
It may only delay it.
00:12:02.720 --> 00:12:34.559
Starting Monday, identify which pay issues should be handled proactively, below range minimum employees, employees far below range midpoint, high performers, critical roles, employees affected by pay compression, employees whose responsibilities have changed, employees in jobs where the market has moved quickly.
00:12:35.440 --> 00:12:49.440
These should not all wait until someone becomes a flight risk, because the best retention adjustment is often the one you make before it becomes a retention emergency.
00:12:50.720 --> 00:12:55.679
Starting Monday, create a clear decision framework.
00:12:56.159 --> 00:12:59.279
What justifies a retention adjustment?
00:12:59.600 --> 00:13:02.000
What documentation is needed?
00:13:02.320 --> 00:13:04.399
How are market data used?
00:13:04.639 --> 00:13:07.279
How is internal equity reviewed?
00:13:07.519 --> 00:13:09.679
How is performance considered?
00:13:10.000 --> 00:13:11.759
How is budget handled?
00:13:12.240 --> 00:13:14.399
Who approves the decision?
00:13:14.799 --> 00:13:17.679
How will the adjustment be communicated?
00:13:18.639 --> 00:13:25.039
Because without a framework, retention adjustments become inconsistent.
00:13:25.600 --> 00:13:31.120
And inconsistency is what creates long-term compensation risk.
00:13:31.679 --> 00:13:33.360
So here's where we land.
00:13:34.000 --> 00:13:36.960
Retention adjustments can be necessary.
00:13:38.000 --> 00:13:40.000
They can be appropriate.
00:13:40.639 --> 00:13:43.840
They can help retain key employees.
00:13:44.559 --> 00:13:48.000
They can correct real pay issues.
00:13:48.639 --> 00:13:55.600
But when they are handled reactively, they also can make compensation harder to manage.
00:13:56.080 --> 00:14:00.000
Because reactive pay decisions create patterns.
00:14:00.559 --> 00:14:02.799
They reward escalation.
00:14:03.759 --> 00:14:05.840
They create exceptions.
00:14:06.720 --> 00:14:08.960
They increase compression.
00:14:09.679 --> 00:14:11.440
They weaken trust.
00:14:11.919 --> 00:14:18.799
And they shift the organization away from strategy toward crisis management.
00:14:19.200 --> 00:14:24.399
That is why the real question is not, should we make this adjustment?
00:14:24.879 --> 00:14:27.200
Sometimes the answer is yes.
00:14:27.679 --> 00:14:34.399
The more effective question is, what does this adjustment tell us about the compensation system?
00:14:35.519 --> 00:14:37.200
Did the market move?
00:14:37.519 --> 00:14:39.440
Did the range fail?
00:14:39.759 --> 00:14:42.879
Did the promotion process fall short?
00:14:43.519 --> 00:14:47.120
Did manager discretion create inconsistency?
00:14:48.320 --> 00:14:51.039
Did the organization wait too long?
00:14:51.600 --> 00:14:55.360
Because every retention adjustment is data.
00:14:55.679 --> 00:14:57.679
It is telling you something.
00:14:58.000 --> 00:15:08.000
And the organizations that listen to that data can move from reactive pay fixes to proactive compensation management.
00:15:09.519 --> 00:15:18.399
If this is something your organization is working through, or if retention adjustments are starting to feel more common, you're not alone.
00:15:18.720 --> 00:15:20.639
We see this all the time.
00:15:21.519 --> 00:15:24.399
Organizations are trying to keep good people.
00:15:25.279 --> 00:15:32.960
But without structure, they may be creating the next internal pay problem while solving the current one.
00:15:34.000 --> 00:15:38.320
And if it's helpful, reach out and mention the episode.
00:15:38.879 --> 00:15:50.720
We'd genuinely love to hear what you're seeing, where retention adjustments are showing up, and what they may be telling you about your compensation system.
00:15:51.919 --> 00:15:55.120
Thanks for listening to What the Comp.
00:15:56.320 --> 00:16:06.159
If this made you think, please send it to someone who is trying to keep good employees without creating bigger pay problems.
00:16:06.879 --> 00:16:15.840
Because fixing pay reactively may solve today's issue, but it can create tomorrow's compensation challenge.
00:16:16.639 --> 00:16:19.120
This is what the comp.
00:00:00.320 --> 00:00:12.400
Welcome to What the Comp, the Pay Strategy podcast, where compensation stops being confusing and starts making sense for real organizations.
00:00:13.119 --> 00:00:18.399
I'm Jennifer Loftus, National Director at Astron Solutions.
00:00:18.800 --> 00:00:30.800
And today we're talking about retention adjustments and why fixing pay reactively can sometimes make compensation problems worse.
00:00:32.000 --> 00:00:33.520
Here's the truth.
00:00:33.840 --> 00:00:37.359
Retention adjustments often feel like solutions.
00:00:38.159 --> 00:00:44.320
Someone is underpaid, someone is unhappy, someone may leave.
00:00:44.960 --> 00:00:48.000
Someone's manager is worried.
00:00:48.719 --> 00:00:53.039
The organization then adjusts the employees' pay.
00:00:53.840 --> 00:00:58.240
And in the moment, that can feel like the right thing to do.
00:00:59.039 --> 00:01:02.240
Sometimes it is the right thing to do.
00:01:02.560 --> 00:01:04.000
But here's the problem.
00:01:05.200 --> 00:01:13.920
When pay is fixed only after there is pressure, the organization is no longer managing compensation.
00:01:14.799 --> 00:01:17.920
It is reacting to compensation.
00:01:18.719 --> 00:01:22.799
And reactive compensation is expensive.
00:01:23.840 --> 00:01:25.760
It is inconsistent.
00:01:26.480 --> 00:01:28.719
It is hard to explain.
00:01:29.359 --> 00:01:36.159
And over time, it can create the very problems it was meant to solve.
00:01:37.040 --> 00:01:44.000
If you're in human resources, finance, or leadership, you've probably seen this pattern.
00:01:44.719 --> 00:01:47.040
An employee raises a concern.
00:01:47.359 --> 00:01:48.959
Maybe they're below market.
00:01:49.920 --> 00:01:52.560
Maybe they are paid less than their peers.
00:01:53.200 --> 00:01:56.000
Maybe their responsibilities have grown.
00:01:56.959 --> 00:01:59.760
Maybe they found salary data online.
00:02:01.359 --> 00:02:04.079
Maybe a recruiter contacted them.
00:02:05.120 --> 00:02:07.519
Maybe they're frustrated.
00:02:08.319 --> 00:02:11.840
Maybe the manager is afraid they will leave.
00:02:12.639 --> 00:02:15.919
So the organization reviews the situation.
00:02:17.199 --> 00:02:22.319
And often the review shows that there is a real issue.
00:02:22.719 --> 00:02:26.080
The employees' pay may need an adjustment.
00:02:26.560 --> 00:02:28.960
Their pay may be misaligned.
00:02:29.360 --> 00:02:31.439
Their role may have changed.
00:02:31.680 --> 00:02:36.560
Their range placement may not make sense anymore.
00:02:38.240 --> 00:02:44.560
The concern may be valid, but the bigger issue is this.
00:02:45.520 --> 00:02:54.000
Why did the organization discover the problem only after the employee became a retention risk?
00:02:54.960 --> 00:02:59.280
That is where retention adjustments become complicated.
00:03:00.479 --> 00:03:09.680
Because the adjustment may help one person, but it also may reveal that the system is not catching problems early enough.
00:03:10.639 --> 00:03:16.639
And when the system does not catch problems early, employees learn to escalate.
00:03:17.199 --> 00:03:19.360
Managers learn to push.
00:03:19.840 --> 00:03:22.319
Leaders learn to intervene.
00:03:22.719 --> 00:03:26.240
And pay decisions become reactive.
00:03:27.680 --> 00:03:32.159
So why do retention adjustments sometimes make things worse?
00:03:33.120 --> 00:03:36.879
There are a few patterns we see consistently.
00:03:37.680 --> 00:03:51.120
The first issue is that reactive adjustments reward visibility, not necessarily need, not necessarily equity, not necessarily contribution.
00:03:52.240 --> 00:03:53.520
Visibility.
00:03:54.080 --> 00:03:57.759
The employee who speaks up gets reviewed.
00:03:58.159 --> 00:04:01.919
The manager who escalates gets attention.
00:04:02.639 --> 00:04:06.719
The department with the loudest concern gets movement.
00:04:07.680 --> 00:04:11.599
The person with an outside offer gets urgency.
00:04:12.319 --> 00:04:18.160
The employee who quietly keeps working may not get reviewed at all.
00:04:19.439 --> 00:04:22.720
It's the proverbial squeaky wheel situation.
00:04:23.680 --> 00:04:36.079
That creates risk because compensation should not depend on who complains first, who negotiated hardest, or who has the most influential manager.
00:04:36.800 --> 00:04:41.920
But in reactive systems, that is often what happens.
00:04:43.360 --> 00:04:48.480
The second issue is that retention adjustments can create new compression.
00:04:49.199 --> 00:04:53.920
An employee receives a pay increase to address retention risk.
00:04:54.240 --> 00:05:03.199
But now they may be closer to or even above the pay of peers with similar or greater responsibility.
00:05:03.519 --> 00:05:08.639
Or they may leap ahead of the pay of someone with more experience.
00:05:09.439 --> 00:05:15.040
Or they may move into a place in the range that is difficult to explain.
00:05:15.759 --> 00:05:19.040
And now the organization has a new issue.
00:05:19.600 --> 00:05:25.279
It fixed one employee's pay, but created questions for others.
00:05:26.079 --> 00:05:33.680
That does not mean the adjustment was wrong, means the adjustment should not be viewed in isolation.
00:05:34.800 --> 00:05:40.000
Every pay change affects the system around it.
00:05:41.519 --> 00:05:47.759
The third issue is that retention adjustments often skip root cause analysis.
00:05:49.120 --> 00:05:53.600
The organization asks, how much do we need to adjust?
00:05:54.240 --> 00:05:58.879
But it may not ask, why did this happen?
00:05:59.360 --> 00:06:02.879
Was the employee hired too low in the range?
00:06:03.680 --> 00:06:05.519
Did the market move?
00:06:06.000 --> 00:06:08.800
Did job responsibilities change?
00:06:09.519 --> 00:06:12.079
Was the salary range outdated?
00:06:12.480 --> 00:06:15.439
Was the promotion increase too small?
00:06:16.319 --> 00:06:19.920
Did manager discretion create inconsistency?
00:06:21.120 --> 00:06:24.480
Did performance pay fail to differentiate?
00:06:25.120 --> 00:06:29.360
Did we ignore the issue during the last review cycle?
00:06:30.319 --> 00:06:33.279
Those root cause questions matter.
00:06:34.000 --> 00:06:41.920
Because if you do not know why the pay issue happened, you cannot prevent it from happening again.
00:06:44.079 --> 00:06:48.720
The fourth issue is that reactive adjustments can weaken trust.
00:06:49.759 --> 00:06:59.519
This may seem surprising, because pay increases usually make people happy, at least at first.
00:07:00.879 --> 00:07:04.639
But employees also pay attention to process.
00:07:06.000 --> 00:07:13.199
If they believe pay only changes when someone threatens to leave, trust weakens.
00:07:14.319 --> 00:07:20.879
If they believe fairness depends on escalation, trust weakens.
00:07:22.240 --> 00:07:28.879
If they believe quiet loyalty is overlooked, trust weakens.
00:07:30.079 --> 00:07:37.519
If they believe managers have to fight behind the scenes to get action, trust weakens.
00:07:38.720 --> 00:07:46.879
And once employees believe the process is inconsistent, even good pay decisions can feel suspicious.
00:07:48.399 --> 00:07:55.120
The fifth issue is that retention adjustments can become a substitute for compensation planning.
00:07:56.079 --> 00:07:59.040
This is one of the biggest risks.
00:08:00.079 --> 00:08:07.360
Instead of reviewing pay proactively, the organization handles issues one by one.
00:08:08.560 --> 00:08:22.399
A retention adjustment there, a market correction over here, an exception over there, a special increase for one department, a one-off fix for a critical employee.
00:08:23.839 --> 00:08:32.480
Each decision may make sense individually, but together they can pull the compensation system apart.
00:08:33.600 --> 00:08:36.399
The structure starts drifting.
00:08:36.960 --> 00:08:40.320
The budget becomes harder to predict.
00:08:40.879 --> 00:08:44.080
Managers expect exceptions.
00:08:45.039 --> 00:08:48.320
Employees expect negotiation.
00:08:49.360 --> 00:08:52.480
Human resources becomes the referee.
00:08:53.039 --> 00:09:00.960
Finance becomes the gatekeeper, and leadership wonders why compensation feels so difficult to manage.
00:09:02.240 --> 00:09:10.559
It feels difficult because the organization is fixing symptoms instead of managing the system.
00:09:12.799 --> 00:09:14.480
Here's the key point.
00:09:14.960 --> 00:09:22.879
Retention adjustments are not bad, but reactive retention adjustments are risky.
00:09:23.840 --> 00:09:35.679
Because when pay only gets fixed after pressure builds, the organization sends the message that the system does not work until someone pushes it.
00:09:36.240 --> 00:09:39.360
And that message is hard to undo.
00:09:40.720 --> 00:09:42.320
So what do you do?
00:09:42.720 --> 00:09:46.000
Because sometimes adjustments are necessary.
00:09:46.559 --> 00:09:50.480
The goal is not to avoid every retention adjustment.
00:09:51.200 --> 00:10:00.720
The goal is to make sure retention adjustments are part of a structured process, not a crisis response.
00:10:01.840 --> 00:10:07.200
Starting Monday, track every retention adjustment.
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Who received it?
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Why?
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How much was the adjustment?
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Who approved it?
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What role are they in?
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What department?
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What manager?
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What was the stated risk?
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What was the root cause for the retention adjustment?
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Because if you are not tracking retention adjustments, you cannot see whether they are isolated or becoming your compensation strategy.
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Starting Monday, review the employees around the adjustment.
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Before making the change, look at peers, team members, range placement, tenure, performance, skills, competencies, and internal equity.
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Because fixing one person's pay without reviewing the surrounding group can create the next problem.
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Starting Monday, separate retention risk from pay misalignment.
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Those are related, but they are not identical.
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An employee may be a retention risk because of pay, or because of workload, or because of their manager, or because of lack of growth, or because of burnout, or because of flexibility, or because they do not see a future.
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If the problem is not really pay, a pay adjustment may not solve it.
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It may only delay it.
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Starting Monday, identify which pay issues should be handled proactively, below range minimum employees, employees far below range midpoint, high performers, critical roles, employees affected by pay compression, employees whose responsibilities have changed, employees in jobs where the market has moved quickly.
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These should not all wait until someone becomes a flight risk, because the best retention adjustment is often the one you make before it becomes a retention emergency.
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Starting Monday, create a clear decision framework.
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What justifies a retention adjustment?
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What documentation is needed?
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How are market data used?
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How is internal equity reviewed?
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How is performance considered?
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How is budget handled?
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Who approves the decision?
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How will the adjustment be communicated?
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Because without a framework, retention adjustments become inconsistent.
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And inconsistency is what creates long-term compensation risk.
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So here's where we land.
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Retention adjustments can be necessary.
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They can be appropriate.
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They can help retain key employees.
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They can correct real pay issues.
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But when they are handled reactively, they also can make compensation harder to manage.
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Because reactive pay decisions create patterns.
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They reward escalation.
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They create exceptions.
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They increase compression.
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They weaken trust.
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And they shift the organization away from strategy toward crisis management.
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That is why the real question is not, should we make this adjustment?
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Sometimes the answer is yes.
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The more effective question is, what does this adjustment tell us about the compensation system?
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Did the market move?
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Did the range fail?
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Did the promotion process fall short?
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Did manager discretion create inconsistency?
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Did the organization wait too long?
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Because every retention adjustment is data.
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It is telling you something.
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And the organizations that listen to that data can move from reactive pay fixes to proactive compensation management.
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If this is something your organization is working through, or if retention adjustments are starting to feel more common, you're not alone.
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We see this all the time.
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Organizations are trying to keep good people.
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But without structure, they may be creating the next internal pay problem while solving the current one.
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And if it's helpful, reach out and mention the episode.
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We'd genuinely love to hear what you're seeing, where retention adjustments are showing up, and what they may be telling you about your compensation system.
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Thanks for listening to What the Comp.
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If this made you think, please send it to someone who is trying to keep good employees without creating bigger pay problems.
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Because fixing pay reactively may solve today's issue, but it can create tomorrow's compensation challenge.
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This is what the comp.
