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Compensation Equity

This document discusses different types of equity in compensation. It defines internal equity as fairness of pay within a company based on job ranking, classification, point systems or factor comparisons. External equity refers to perception of fair pay compared to those outside the company using lead, lag or market pay policies. Individual equity considers fairness for identical jobs in an organization based on seniority, merit, incentives, skills or team-based pay.

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48 views8 pages

Compensation Equity

This document discusses different types of equity in compensation. It defines internal equity as fairness of pay within a company based on job ranking, classification, point systems or factor comparisons. External equity refers to perception of fair pay compared to those outside the company using lead, lag or market pay policies. Individual equity considers fairness for identical jobs in an organization based on seniority, merit, incentives, skills or team-based pay.

Uploaded by

rnaganirmita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Compensati

on
Mohammad Faisal Bariyaly

Why do Millions of
people go to work
each day?

Drive to
acquire:-

We all have a

Money
Things
Prestige
power

Equity: Equity is a concept that people derive job satisfaction


and motivation by comparing their : efforts (inputs)
Income (outputs)
Motivation

Internal Equity

External Equity

Individual Equity

Perception
of Fairness

Commitment

performance

Internal Equity:Internal equity is the perceived fairness of pay


differentials among different jobs within an organization.
1.

Job ranking

2.

Job classification

3.

Point system

4.

Factor comparison

External Equity:External equity involves employee perception of their


fairness of their compensation relative to those outside
the organization.
1. Lead policy
2. Lag policy
3. Market policy

Individual Equity:Individual equity considers employee perception of pay


differentials among individuals who hold identical jobs in
the same organization.
1.
2.
3.
4.
5.

Seniority-based pay systems.


Merit-based pay systems.
Incentive plans.
Skills-based pay.
Team-based pay.

Tha
nk
You

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