What is a key characteristic of red circle rates?

Red circle rates are indeed fixed rates that exceed the stated pay range for a given position. This situation generally occurs when an employee's pay has been established at a rate higher than the top of the salary range for their job classification, often due to prior experience, unique skills, or other factors when they were hired or promoted.

This characteristic can lead to complexities in salary management, as organizations need to ensure that their pay structures remain equitable and competitive while addressing the potential for compression issues where newer employees may be hired at or near the same pay level as more experienced employees. Maintaining red circle rates requires careful attention to compensation policies to avoid discrepancies that could impact team morale and retention.

In contrast, other options do not accurately describe red circle rates: they are not primarily determined by seniority or performance, nor do they represent starting salaries for new hires, since starting salaries typically fall within the established pay ranges rather than exceeding them.