This is the brief background. Our university is increasing the existing hiring rate say of incoming assistant professors. By doing so, the salary of the newly hired faculty exceeds that of those faculty serving 2-3 years ahead. So the management increases their salary accordingly so it exceeds a bit compared to those newly hired. However, those who served for more than 3 years did not get raise because their salaries are already higher than those newly hired. Is this allowed or is this an acceptable practice?
closed as off-topic by Dawny33, Lilienthal♦, Philip Kendall, David K, NotMe Nov 13 '15 at 17:17
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – Dawny33, Lilienthal, Philip Kendall, David K, NotMe
However, those who served for more than 3 years did not get raise because their salaries are already higher than those newly hired. Is this allowed or is this an acceptable practice?
That is always the hidden cost of systematic pay raises. If an employee with more time with the company feels that they are not adequately compensated for that additional experience, you have diminished their desire to stay loyal.
Legality is another issue. It all depends on if there are contracts and what do they say. In the United States contracts for K-12 teachers specify the rates for all the teachers working in the school district, so all would be aware of the issue. Therefore the negotiators have to address the issue. If the county said we have to increase the offer for the new teachers so that they make almost as much as a teacher with 5 years, they know that the teachers/union will want to address the issue.
But in the US there aren't big union contracts for college/university professors. Therefore there is nobody to force the employer to adjust all processors salaries.
Management has to be aware of the issue. They just might have decided that the risk of losing those with 3+ years experience is an acceptable risk based on their budget, and their need to hire quality workers.
This happens all the time. The last company I was some folks work 10+ years there and someone just starting is only 5-10% behind their more senior staffs. I would consider it a favor if the university is taking the time to make people who were in 2-3 years happy by shifting their pay.
The idea behind it is to keep senior staff at less pay but at the same time hire newer people at a competitive market pay. The senior staff eventually leaves and what remains is the new staff.
Is it acceptable or legal? Yes, the company can pay whatever the heck you agree to get paid. You're there voluntarily and nobody is forcing you to stay there. So a company can treat or mistreat their employees as they see fit. The most expensive item at any company is employee cost. They want to reduce that and one way to do that is to remove higher paid workers and replace them with lesser pay workers. This keeps them competitive because senior staff will find new jobs on their own while newer staff will like the benefits the company have to offer. They'll eventually leave and the cycle starts again.