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8-5. Compression represents a serious dysfunction of pay structures. Discuss some of the major ramifications of...

8-5. Compression represents a serious dysfunction of pay structures. Discuss some of the major ramifications of compression. Also, discuss how companies can minimize or avoid these ramifications.

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Compression leads to dissatisfaction in employees and they get discouraged as their pay will not increase no matter how hard they work. This leads to their quitting the company . It is a loss for the employers as they loose their employees and also reputation. In order to avoid these ramifications it is better for the companies to maintain proper pay structure and promotions in the company so that the employees will be satisfied with what they do and hence the reputation of the company in terms of employment increases. It should maintain a confidential pay system and every position must it's own pay scale so that no comparision arises.

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