The Case Against Pay Inversion‪.‬

In the competition for new employees, companies sometimes will offer a higher salary to the new hire than they are currently paying to better-qualified current employees in similar positions. In short, their pay scale is inverted. While various rationales are offered for this practice, such as market pressures or a dearth of suitable prospects, firms should be aware of potentially harmful fallout. This may include higher direct and indirect costs, low employee morale, negative effects on society, and questions about management's ethics and competency. **********