companies must think about both internal

 

The Issue

When crafting a pay structure, companies must think about both fitzonefitness.com internal and external equity. The former means making sure that employees who perform similar jobs are paid similarly. External equity means comparisons to what the industry is paying.

Creates a “Fair” Culture

It’s no secret that if you want a motivated, all-in workforce, you’ve got to create a culture in which people feel like they’re paid equitably. If an employee sees that Matt four cubicles down appropriately makes no more happytechno.net than she, that cultivates a milieu of fairness that will not only help productivity but will boost the company’s reputation, positioning it to lure top talent. Whether you pay fairly or not, word will get out, particularly in this age of online compensation forums and the like. The old days of telling employees to keep their pay to themselves, and expecting that to work, are over.

Results in Fewer Lawsuits

It’s a fact: while basing what your company pays on what the market is paying might get you top-shelf talent, making internal pay equity more of a priority lessens the risk of litigation. If Michael and Cassandra earn different wages in basically the same job, you’re opening yourself up to lawsuits. What’s more, thanks to the employees can take you to court for past salary discrepancies. And things won’t get better. As states continue to pass pay-equity legislation, the number of lawsuits against companies has increased markedly.

So, sure, it’s great that your company is competitive in terms of what Company X pays, but that doesn’t necessarily shield you from getting sued.