The hospital is hiring several new nurses for an expanded OB unit. The manager explains to the current staff that due to a shortage of nurses, salary compression is occurring. How should the current nurses interpret this statement?
1. There will be no raises in the near future.
2. The new nurses' starting salaries will be close to what the current nurses are making.
3. All nurses will receive a merit raise for training new staff.
4. Review of salary structure done while hiring these nurses will result in raises for all current nurses.
2
Rationale 1: Salary compression is not linked to raises.
Rationale 2: Salary compression is the effect of higher starting pay of new nurses resulting in lower salaries for long-term employees. This results in the wages of new nurses being just below or even higher than that of current nurses. This is a quick fix to a nursing shortage, but a dangerous strategy, and it may result in dissatisfaction and turnover of more experienced nurses.
Rationale 3: Salary compression is not linked to merit raises for training staff.
Rationale 4: Salary compression is not linked to raises for current employees.
Global Rationale:
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