Variable pay plans

A compensation plan has to be established at some point in time, but subsequent circumstances may require that adjustments be made. One such adjustment is when a key employee needs to receive extraordinary compensation in order to compete with another offer.

The best way to handle this without being accused of favoritism is to document the reason for the adjustment in policy and make that circumstance part of the evolving company compensation plan.

But be careful that you don't establish an exception that could create more problems than losing a key employee would create.