Importance of Achieving Equity in Pay Structures

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Importance of Achieving Pay Equity Table Of Contents What is Equity in Organizations? 4 The Equity Theory 4 Inputs 5 Outcomes 6 Importance of Equity in Pay Structure 7 Internal Equity 9 Steps to Achieving Internal Equity 9 Methods Commonly Used 9 Job analysis 9 Job Evaluation 11 Ranking Method 12 Classification Method 13 Factor Comparison Method 13 Point Method of Job Evaluation 14 Strategic Considerations 15 External Equity 16 Steps to Achieving External Equity 16 Compensation Surveys 16 Benefits of Pay Surveys to the Organization 17 Published Compensation Survey 18 Custom Developed Compensation Surveys 19 Compensation Surveys: Strategic…show more content…
When the ratio of inputs to outcomes is close, than the employee should have much satisfaction with their job. Outputs can be both tangible and intangible (Walster, Traupmann & Walster, 1978). Typical outcomes include any of the following: • Love • Intimacy • Job Security • Esteem • Salary • Employee benefit • Expenses • Recognition • Reputation • Responsibility • Sense of achievement • Praise • Thanks • Stimuli Importance of Equity in Pay Structure Following are some of the benefits gained by having an equitable pay structure within the organization • It is a protection against legal charges of discrimination based on race, gender, etc. • It brings consistency in the pay structure, therefore allows for easy alignment with overall company strategy. Now it is only required to make adjustments for achieving organizational goals. The already structured and consistent pay structure will easily absorb the changes. In contrast a non-consistent (haphazard) pay structure will require more effort to adopt any
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