Ensure Fair Pay Between Employees of Different Tenures
What is pay compression?
Pay compression occurs when the value of each year of experience is lower for longer tenured employees than for newer employees. Unfortunately, given the rapid increase in starting pay for many positions, it's a common problem for organizations. A comprehensive study of your compensation system to determine whether pay compression is occurring will help your organization make pay decisions that boost morale and increase retention.
How can DCI Help?
DCI uses widely accepted methods to conduct a holistic analysis that accounts for available market data, your organizational structure, your industry, and your goals. The results and recommendations of the analysis will be presented in an executive summary under attorney-client privilege.
Types of Analyses:
Market-Based Analysis
If reliable market data is available, DCI will compare compa-ratios (employee salary divided by market 50th) of employees at several levels of time-in-job or time-in-company. The differences in average compa-ratios at each of these levels will be analyzed to determine if longer-tenured employees are paid lower in the market than less-tenured employees.
Internal-Focused Analysis
If sufficient market data is not available, DCI will test for pay compression by investigating how the average annual pay for higher-tenured employees compares to the average annual pay for newer employees.
