The action or process of reclassifying an employee or a job at a lower level and freezing the rate of pay.
Red-circling typically occurs following a re-evaluation of jobs in an organization, when a post is deemed to merit a lower level of pay than it currently attracts. The pay of red-circled employees is frozen until that of workers already at the specified grade reaches the same level.
1950s. From red-circle + -ing.