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- Title
The Case Against Pay Inversion.
- Authors
McAfee, R. Bruce; Glassman, Myron
- Abstract
This article discusses the practice of pay inversion and shows why it has potentially harmful fallout. Pay inversion is defined as the hiring of employees for a specific job who have fewer credentials or lower overall job performance, or both, at a higher compensation level than that of current employees. The typical explanation for why firms practice pay inversion is that the market demands it. Basic economics says that when employees are in short supply, an employer must pay more to attract an applicant. The following are the disadvantages of pay inversion: increased costs; harmful to society; raises management competence issues; and raises ethical issues.
- Subjects
EMPLOYEE recruitment; WORKFORCE planning; PERSONNEL management; WAGES; SUPPLY &; demand; LABOR supply
- Publication
SAM Advanced Management Journal (07497075), 2005, Vol 70, Issue 3, p24
- ISSN
0749-7075
- Publication type
Article