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['Compensation']
['Compensation', 'Broadbanding']
07/07/2023
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InstituteCompensationCompensationBroadbandingFocus AreaUSAHuman ResourcesEnglishAnalysisIn Depth Sub Topics (Level 4)Associate Benefits & Compensation
Pay compression
['Compensation']
- When pay rates within a range don’t vary much, this is considered pay compression and organizations should reevaluate employee pay.
When the differences in employees’ pay rates within a range do not vary much, it is known as pay compression. There may be someone with seven years’ experience who is paid $15.50 an hour working with someone who has only two years’ experience who is paid $15.00 an hour. This can result from raising starting salaries without adjusting those of current employees. There may be other causes as well. In this situation, pay adjustments should be considered.
:
compensation
compensation
FOUNDATIONAL LEARNING
- When pay rates within a range don’t vary much, this is considered pay compression and organizations should reevaluate employee pay.
When the differences in employees’ pay rates within a range do not vary much, it is known as pay compression. There may be someone with seven years’ experience who is paid $15.50 an hour working with someone who has only two years’ experience who is paid $15.00 an hour. This can result from raising starting salaries without adjusting those of current employees. There may be other causes as well. In this situation, pay adjustments should be considered.
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Copyright 2026 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.