Answer to Question #216961 in Management for AAA

Question

In 2020, Zandi started working as a lecturer at UFH in the management and commerce faculty and earns R20 000 a month. She enjoys her job and was happy with her salary until she spoke to her friend who works in the Science faculty in Alice and found out that her friend earns R25 000! She also looked online and saw that she could get a similar job at UCT and earn R30 000 a month, although she would have to teach more classes. 

Now she is very angry and upset. It is affecting how she feels about her job, as she thinks her colleagues are abusing her and that they don't value her.

Read up on the concepts of internal, external and individual equity and explain to Zandi why these differences might occur. What should HR do in this instance?

Answer 1

External equity refers to the employee's perception of being treated in the same way as employees in the same job but at a competing organization, while internal equity refers to the employee's perception of being treated in the same way as employees within a focal organization.

Can be achieved by the following;

1. Compensation market study. Make sure you are staying up-to-date on what the external market is paying for the jobs in your store. ...
2. Hiring rates to be adjusted
3. Consistency with raises
4. Adjust pay as needed.