As the year 2000 approached, many organizations hired "young" and "inexperienced" information technology (IT) specialists to help address the Y2K problem. Many of these new hires were paid high compensation that brought them very close to the compensation earned by experienced IT specialists working with these companies. Which of the following can such a practice lead to?
A) wage inversion
B) pay equity
C) wage-rate compression
D) high turnover across the board

Question

Quizplus · Accepted Answer

Wage-rate compression occurs when there's a narrowing of the differences in pay between employees regardless of their skills, experience, or seniority. Hiring inexperienced IT specialists at high compensation rates close to those of experienced specialists can lead to this situation, as the pay scale becomes compressed between new and veteran employees.

As the Year 2000 Approached, Many Organizations Hired "Young" and "Inexperienced