What is the outcome of applying the principle of overlap in compensation practices?

Applying the principle of overlap in compensation practices results in more flexible pay ranges between job grades. This principle involves designing salary ranges in such a way that the upper end of one job grade can overlap with the lower end of the next job grade.

This approach allows organizations to account for variances in employee performance, skill levels, or experience that may not strictly align with job classifications. Therefore, it provides the necessary flexibility to reward individuals based on their specific contributions rather than strictly adhering to a defined structure. This flexibility can help organizations maintain competitive pay structures and attract or retain talent effectively.

Implementing this principle can also facilitate career progression and allow employees to potentially earn higher salaries as they move between grades, provided they demonstrate the necessary capabilities. This structured yet flexible approach enhances the organization's ability to manage compensation in a dynamic workforce environment.