Wage-rate compression can occur when organizations grant pay adjustments to lower-rated jobs but do not extend the adjustments up the hierarchy.

Question

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Wage-rate compression happens when the pay differences between job levels within an organization become smaller because lower-level positions receive pay increases at a rate higher than those for higher-level positions, often due to adjustments not being extended up the hierarchy.

Wage-Rate Compression Can Occur When Organizations Grant Pay Adjustments to Lower-Rated