Pay compression is least likely to develop when the market rate for starting salaries increases at a rate faster than an organization can raise pay for individuals who are already on the payroll.

Question

Quizplus · Accepted Answer

Pay compression is more likely to develop in this scenario because existing employees will see smaller pay increases compared to new hires, reducing the pay differences between employees regardless of their tenure or experience.

Pay Compression Is Least Likely to Develop When the Market