Multiple-pay systems: Are they worth the risk?

Two types of multiple-pay systems are described: (1) those that hire new employees at less than the current salary rate, and (2) those that offer higher rates for occupations in which there are labor shortages. Multiple-pay systems often stimulate rivalries between long-term employees and recent hires, segregating a company into highly competitive territorial groupings. General employee discontent, equal pay, and comparable worth problems may also develop. A single-pay system is the best way to provide a consistent and coherent payment mechanism.