Assignment: Pay Range Problem

Susan Stoker is a star performer in the ABC Corporation. She currently holds a position in Pay Grade 4 and is paid near the top of the range. Susan is being promoted to the next position in her career path, which is Pay Grade 5. ABC Corporation, as a rule, provides a $10,000 raise for promotion from Pay Grade 4 to Pay Grade 5, and Susan is aware of this practice and anticipating this raise.

To further internal equity, ABC Corporation chooses to place all promoted individuals in a new pay grade at the bottom of the range. Because of Susans current pay at the top of pay grade 4 if she is given the pay raise of $10,000 she will be well above the mid-point of pay grade 5. What is your recommendation on how to deal with this situation and promote both the internal equity of ABC Corporation and reward Susan for her promotion from Grade 4 to Grade 5?