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To: gpowell who wrote (224)	5/9/2003 1:26:20 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 445

gpowell, I think your assumptions are flawed. You assume that lower ranked employees are paid less - I'd say this isn't generally true. Wages are a function of the demands made by the employee and not necessarily on their ranking or productivity. Therefore, as lower ranked employees are let go average salary could rise, decline, or stay the same. You could argue that over the long run your ranking system will assert itself - but sticky wages is a short run phenomenon. Everything you say is true, but I suspect a tendency is still in place. When first hired, one would expect a significant correlation between ranking and pay. As an employee is retained, one would expect raises to have a degree of correlation with rankings. If a highly ranked employee is not paid a sufficiently high wage the risk of loss to an other employer is higher. When the workforce must be reduced, my expectation is that the lower ranked employees with lower future value to the company, and more easily replaceable, will be let go first. If these do not tend to have lower wages, on at least a statistical basis, it would seem to indicate that the previous company policies in recruitment, promotion and retention have not been effective. Regards, Don