Range maximum is the highest rate you are willing to pay for a role. This can be reflected as a fixed amount or as a ratio between the range minimum and range maximum.

Various reasons could justify an employee being paid at the maximum of the range:

• The employee is classified as HiPo (High Potential) and displays the necessary behaviors and skills to rise into critical positions. This generally includes only 5% of a company.
• The employee has spent a long time at the company and is seen as a highly valuable asset. Losing this employee could result in detrimental business outcomes.

How to establish Range Maximum

There are several methods to determine the maximum range for a position. Many salary surveys by companies such as PayScale, Michael Page, and Glassdoor reflect the minimum, mid-point, and maximum for various roles and industries.

Once you have placed a job in a certain salary range based on your findings, you can decide if the job level should be adjusted and possibly given a higher ceiling than initially expected.

You can also calculate your maximum pay based on the range spread.

Findings by the Economic Research Institute use the following spreads for these industries/jobs:

• Administration/Operations: 40% +
• Professional/Management: 50% +
• Executives: 50-65% +

The key is to be consistent in your implementation so that the range maximum can be accurately calculated.

For example, imagine a Professional/Management role with a range spread of 50%. Let’s say the midpoint is $70,000. To find the maximum, use the minimum and multiply it by 1.00 + ½.

Following this calculation, the range maximum would be $84,000.