Question

Distinguished btn internal and external equity in compensation management

Answer 1

Internal Equity:- It is mainly implemented in order to evaluate the value of different jobs with respect to the organizational objectives. The different types of rewards which are provided are based on vital elements in order to make a certain job worth more than other jobs. These dimensions are regarded as compensable factors.

This is done by following methods:-Job ranking, Job grading, factor comparison and        the point method

External Equity:- The exact method of determining the rating of pay for the job is not present. While deciding the pay rates, most of the organizations look for the external information with the inputs which they have received from the internal evaluation of jobs. This is termed as pricing the wage structure. This is done by following methods:-

Wage and salary survey, Identifying important jobs, selection of the firm to survey, data collection, pay level policy