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wage compression

an internal inequity that occurs when the salary differential between newly hired employees and established employees is smaller than it should be. If left unchecked, wage compression leads to wage inversion, in which the salary of more recent employees is greater than that of established or more senior employees. Wage expansion is the increase in salaries of established employees as a countermeasure to wage compression. Also called salary compression. See also external inequity; overpayment inequity; underpayment inequity.

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Psychology term of the day

November 25th 2024

cause

cause

n.

1. an event or state that brings about another (its effect).

2. in Aristotelian and rationalist philosophy, an entity or event that is a requirement for another entity or event’s coming to be. Aristotle proposed that there were four types of cause—material, formal, efficient, and final. In the case of a sculpture, for example, the material cause is the stone or metal from which it is made, the formal cause is the form or structure that it takes, the efficient cause is the sculptor, and the final cause is the sculptor’s aim or purpose in making it. —causal adj.