Internal Equity?What Is
Choosing how much to pay youremployees can be tricky.
You want to be fair to your employees,and you want them to feel valued.
By using internal equity, you cancreate a pay system that maintainsemployee loyalty and happiness.
DEFINITION:
Internal equity is
the comparison of
employee positions
in your business to
ensure fair pay.
Employees should also perceive that they're
paid fairly compared to their coworkers.
Otherwise, they mightfeel unvalued and leave.
When you adopt a straightforward and honest
payment system, your employees will believe
that they are being paid fairly.
This boosts company morale andemployee loyalty.
So, how can you achieveinternal equity?
1. Consider the tasks of your employees.If two employees perform similar
tasks, they should earn similar wages.
2. Don't base employee wages solelyon job titles.
Two workers that have different titles but
perform similar tasks should have similar wages.
3. Consider educational backgroundsand relevant experience.
Similar tasks are the main consideration when
you set employee wages, but an employee's
education and work experience should be
accounted for.
4. Document all the factors that ledyou to your decision.
This will maintain transparency and fairness in
your business. If an employee ever questions
their wages, you'll be ready to answer.
There are 2 major laws
regulating internal equity:
The Equal Pay Act
The CaliforniaFair Pay Act
1.
2.
Equal Pay ActThis act states that men
and women who have
equal jobs must be
equally compensated,
and that you can't use a
person's sex to justify
higher wages.
California FairPay Act
This Act is more strict than theEqual Pay Act. Californiaemployers must pay equalwages to employees performingsimilar work.
The Act also allows employeesto openly discuss their wages.
Thanks forreading!
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