Is it ethical to “red circle” employees when wages are too high? Explain your answer.

Red circled employee’s means the company is over compensating these employees as compared to the value of their jobs being performed. They are paid over the maximum range established for their is ethical to red circle these employees when the company is facing change in the market conditions. These employees have been paid aid above market rate for many years and, in better economic conditions. But today when the company is itself struggling. It is the method of cutting HR expenses. This may also be the case when these employees’ responsibilities decrease. This method is not taking away their positions but just freezing their salary on upper limit in difficult times or when conditions are changing.

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