Internal Equity In The Workplace

772 Words 4 Pages
Internal equity is based on education, experience, physical demands, responsibilities, and working conditions. Ranking jobs within the organization need to be consistent with job descriptions. It is important to the organizations design and the compensation structure. To achieve internal equity the pay needs to be related to the value of the work being performed. Internal equity is about the pay relationships between different jobs, skills, and competencies within the organization (Milkovich, 2014). It is how employees see their responsibilities, rewards, working conditions, and compare it to similar positions. The pay must be fair to achieve internal equity and show value and worth. It plays a vital role in the organizations design and compensation structure. Employees want equal pay for equal work.
Job analysis is used to determine the internal equity of jobs. Employees compare their pay against co-workers pay and employees want to be compensated more if they are doing similar work within the organization. Job analysis has to do with collecting data about jobs and job evaluation is the process of placing value to the jobs. It is important to gather information about the
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People want to be paid a fair wage and employees want to be compensated accordingly. Difference in pay rates for different jobs and skills influences how fair employees believe they are being treated. When there is a difference in pay employees will want to increase their pay by adding on more responsibilities. This influences how they adapt at different levels within the pay structure. The internal pay structure is an important part of an effective compensation programs and helps ensure that pay levels for groups of jobs are competitive externally and equitable internally (Milkovich, 2014). A pay structure allows management to reward performance and

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