Question

Why is equity in compensation so important?

Answer 1

Fair and non-discriminatory pay systems are a legal requirement and good management practice. By tackling unequal pay you can increase efficiency and productivity, as it will help to attract the best employees, reduce staff turnover, increase commitment and reduce absenteeism.

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Answer 2

Advantages and Disadvantages. The advantages of internal and external factors are an important tool used to define and implement a solid base pay, cash compensation, or benefits. Internal equity allows the organization to warrant an equal pay among the employees based on the pay scale or performance.