(This came in as an anonymous post - Steve)
We have a unique situation where some employees have substantial salaries, but their roles have reduced over time.
We have never been a company where we reduce salaries. We know we can, but these cases involve employees who are still very productive people. The company has just evolved and moved past them.
Has anyone else had this happen? If so, what steps did you take? I'd appreciate any feedback or methods that you've tried.
We've had to move people to different salary grades when their roles changes. If they are now at the max of the new salary range, their potential for a merit increase is less (or non-existent). You might want to consider offering a "Top of Range Bonus" during performance review time. That way they are still rewarded, but their salary doesn't snowball year after year.
Sounds like a "red circle rate" to me... still value the person, but the job is obsolete. Give the employee a choice to learn something new, or they can stay in current role but with the understanding that their salary will not increase in current market conditions. Merit/ General increases should be granted as a lump sum to keep base salary stable until conditions warrant otherwise.