How Does Lack of External Equity Lead to High Staff Turnover? Seeking Insights and Resources

Hi all,

I have been assigned this question for my assignment - Lack of external equity may contribute to staff turnover in an organization. Discuss. I'm quite stuck on this topic, and it would be fantastic if anyone could help me out here with information or web links.

Many Thanks!

Hello Zakes,

I hope you are enjoying in Singapore!

What is External Equity? It is known as external competitiveness, referring to how an employer positions its pay relative to what competitors are paying.

So, if you are working in an industry related to Information Technology (IT) and are employed in X organization as a Software Developer, receiving a salary comparatively lower than a person in Y organization performing the same role as yours, then:

- You may become demotivated.
- Your performance will start to be affected.
- You may feel detached from your current organization.
- You may consider leaving the job as soon as you get a better chance (higher salary).

However, in some cases, like the scenario where Chan works in a company called "ABCXYZ Technologies," which is less reputed than "Infosys Technologies" but offers Chan a higher salary than Infosys Technologies, Chan may still be interested in joining Infosys Technologies if given the opportunity.

Sometimes, it's the brand name and reputation that matter.

I hope this helps clarify the concept for you. Let me know if you have any further questions or need more information.

Just to ask further on this topic, does culture have any impact on external equity? I came across an article that says Japanese people tend to focus on the opinions of the people around them (colleagues, friends, family) before they think of leaving a job. On the other hand, Western people tend to think and decide more for themselves when they leave a job for another opportunity.

What about the economy? Does a bad or good economy play a part in the decision to leave a job?

Hope I didn't ask too much... :)