In point-factor job evaluation, ‘scope’ is not solely about breadth or number of interactions. It can encompass the depth, complexity, and critical nature of specialized expertise. A role with deep, niche impact on core product architecture demonstrates significant scope through the criticality and specialization of its work, even if collaborative breadth is narrower.

While all are important, the primary risk with spot awards is that they can morph into an expected part of compensation for performing regular job duties. The first consideration should be to ensure this reward for extraordinary effort does not create a precedent that weekend system support is now a bonus-eligible activity, potentially distorting the base pay structure and creating future expectations.

To specifically balance and drive two distinct strategic behaviors (new acquisition vs. existing growth), the plan must measure and reward them separately. Using different rates or measures attaches explicit value to each activity, clearly communicating priorities and allowing the company to weight the incentives according to strategic importance.

A sound compensation strategy aligns pay with the business’s talent philosophy. A deliberate differentiation in market posture (e.g., paying a premium for hard-to-find data science skills) may be justified. The next step is to validate whether this disparity is intentional and aligned with strategy, or an oversight that needs correction. Action should not be taken without this strategic context.

Best practice for promotions considers both movement to the new range and the employee’s relative position in their old range. Simply moving to the minimum ($78K) ignores their high relative worth (90th percentile). A standard percentage (Option A) might place them too high in the new range too quickly. Option C provides a meaningful increase that acknowledges their contribution while placing them appropriately (likely near the 25th-35th percentile) in the new range, allowing for future growth.

Effective STI metrics should be directly influenced by the participants’ efforts. Project milestones related to functionality, budget, and timing are objective, measurable, and squarely within the project team’s control. Stock price, long-term customer satisfaction, and overall market share are influenced by far too many external factors and other parts of the business to be a fair measure of this specific team’s performance.

A merit increase matrix is a best-practice governance tool. It guides managers by recommending increase amounts based on two key factors: performance (rewarding results) and compa-ratio (managing internal equity and pay relative to the range). This ensures high performers get meaningful rewards, but those already high in their range may get a smaller percentage, preserving budget and allowing for differentiation where it’s most needed.

The relevant labor market for a given job is defined by who you compete with for talent, not just who you compete with for customers. Software engineers, for example, may be recruited from finance, healthcare, or retail companies, not just direct product competitors. A custom peer group that reflects this reality provides more accurate and actionable market data for setting competitive pay.

The core principle of a discretionary recognition program is that it rewards exemplary effort that goes above and beyond. To avoid entitlement, it is critical to communicate that awards are not for routine performance, not guaranteed, and not a substitute for base pay or incentives. While guidelines are helpful (Option A), over-prescriptiveness can undermine the discretionary, spontaneous nature of effective peer recognition.

In point-factor job evaluation, ‘scope’ is not solely about breadth or number of interactions. It can encompass the depth, complexity, and critical nature of specialized expertise. A role with deep, niche impact on core product architecture demonstrates significant scope through the criticality and specialization of its work, even if collaborative breadth is narrower.0