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Internal and External Pay Equity

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Address the importance of managing pay equity (both internal and external) and the consequences for not doing so. Address the role of pay equity and employee job satisfaction and motivation from a strategic perspective.

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The response provides you a structured explanation of Pay Equity . It also gives you the relevant references.

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It is important to manage pay equity both internally and externally. Internally, there should be a matching of employee knowledge, skills, and abilities with pay. Employees with similar knowledge, skills, and abilities should be grouped together and their pays should be similar. If matching of knowledge, skills, and abilities and pay is not done then the consequences can be disastrous. According to J. Stacey Adams in his Equity Theory, an employee ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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