address-pay-compression-or-risk-employee-flight

Preventing pay compression between tenured employees and new hires and between managers and their direct reports can keep experienced employees motivated and productive and less likely to leave, according to findings from a recent report by pay consultancy Pearl Meyer. Pay compression occurs when new hires are paid the same as or more than current workers in the same position, or when the pay difference between employee levels shrinks so that higher-level workers feel that their pay advantage is no longer significant. "Salary compression leads to low productivity and morale and high turnover," said Rebecca Toman, Pearl Meyer's survey operations manager, who spoke at WorldatWork's 2018 Total Rewards Conference, held recently near Dallas. "With unemployment down, employees are looking for jobs with better total rewards packages. In this environment, employees will not tolerate inequitable pay."