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How to Manage Salary Compression Issues

How to Manage SalaryCompression IssuesNovember 2017 How to Manage Salary Compression IssuesNow more than ever, a variety of factors are on a collision course impacting an organization s ability to pay its employees fairly and equitably causing Salary Compression Issues . Minimum wage changes, pay equity laws, FLSA overtime rule changes, stagnant Salary increase budgets, mergers and acquisitions, new hire compensation, and supervisor-employee pay relationships are all common contributors to Salary Compression Issues . Pay Compression occurs when the relationship between two or more employees is too small to be equitable.

compensation, for example, at a 1.05 or 1.10 compa ratio. For these job offers in excess of the desired new hire compa ratio, a compensation review as well as department head approval for compa ratios over 1.05 or 1.10 can help minimize compression issues between new hires and existing employees.

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