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salary range that most closely corresponds to the applicable market rate. All market adjustments will be re-evaluated on a regular basis. G. New Hires New employees may be hired at a wage up to the midpoint of the pay grade. The City Administrator or appropriate department head may recommend new employees be hired at a rate above the midpoint of the pay grade for their classification based upon qualifications and experience, subject to approval by the City Council. A probationary employee may advance to the next pay step after satisfactorily completing six months of employment which meets performance expectations, based upon a recommendation from their supervisor subject to approval of the City Administrator. The employee will then follow the annual increases as defined in Section H. H. Annual Increases Subject to Council approval of the compensation plan, every year on or about January 1st, regular employees who have completed their probationary period may advance to the next pay step after satisfactorily completing another year of employment which meets the performance expectations until they reach the grade maximum. New hires who are in their probationary period at the time of the annual increase will not move to the next pay step until their 6th month anniversary, however, they will move to the corresponding step in the new salary range, i.e., if they are at step 3 in the current plan they will move to step 3 in the next plan. If an employee does not have satisfactory performance, they will not advance to the next pay step and may be placed on a performance improvement plan. Determination of satisfactory performance must be recommended to the City Administrator by the immediate supervisor on forms prescribed by the Administrative Services Director. Employees who are at or above the grade maximum will receive the predetermined cost-of-living-adjustment (COLA) based on a satisfactory performance review. I. Promotion A promotion is defined as the selection of an internal candidate through the competitive process into a position at a higher salary range of classification. The employee’s salary increase will generally be about 10% of their current step per pay grade promoted. The salary increase will be capped at around 20%, and the employee will be placed at the closest corresponding step in the new salary grade. Adjustments will be based on internal equity considerations and approved by the Administrative Services Director. Employees placed into a new position through promotion will enter a 6-month probationary period and may advance to the next pay step after satisfactorily completing the probationary period. J. Demotion Involuntary An involuntary demotion is defined as a reassignment from one position to another, which has a lower salary range or classification because of a performance-based consequence or other disciplinary procedure. The employee’s salary is subject to adjustment on a case-by-case basis as approved by the City Administrator. Voluntary A voluntary demotion is defined as the selection of an internal candidate through the competitive process into a position at a lower salary range or classification. The employee’s salary reduction will generally be no greater than 10% of their current step