What is internal equity and external competitiveness of compensation
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rashidmusa Started The Discussion:

Hi Seniors,

I need your help to work out on my assignment to examine the following.

Can seniors explain how the following factors determine salary and wages :

1. Internal equity

2. External Competitiveness.

What exactly are these terms in compensations and how these terms can be determine in order to address the issue of problem area.

kind regards

Rashid.

rashidmusa -  Member Since: Oct 2008
Should I Regreat To Post This Question ? 12 Views But No One Reply....................... I Am Still Hopeful.............. Warm Regards Rashid

rashidmusa -  Member Since: Oct 2008
Hi ,

It seems nobody is practicing Market Salary Survey in India. But if I ask for consultant many will appear on board projecting themselves as they are experts in conducting salary survey but could not answer this term I asked for whoch belongs to Market Salary Survey.

Can anybody explain?

Regards

Rashid

sivapaparao -  Member Since: Jun 2007
Hi Rashid,

As per my understanding,

Internal Parity - Similar pay for similar work

External competitivenes- How competitive or fair are the salaries being paid to our employees for similar work in either our competitor or other organizations.

Thanks

rajsawster -  Member Since: Jan 2008
Hi Rashid,

Don't worry I have answer for you.

1. Internal equityis a fairness criterion that implies an employer’s pay practices correspond to each job’s relative value in the organization.

2. External equityis a measure of an employer’s compensation levels compared to those employers within its recruiting market. As a fairness criterion, external equity implies that the employer compensates at levels that correspond to prevailing, external market rates, as determined by the job’s market range. External equity must be balanced with internal equity.

I hope this will solve your qery.

Regards

Sawant

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