Which of the following best describes the concept of 'internal equity'?

Which of the following best describes the concept of 'internal equity'?

• A. Ensuring compliance with market standards
• B. Compensation based on market trends
• C. Fair treatment of employees within the organization
• D. Government salary guidelines

Answer: (C)

The concept of 'internal equity' refers to the fairness and consistency of compensation among employees within the same organization. It evaluates whether employees who have similar roles, responsibilities, skills, and performance levels receive similar pay. This principle is essential because it supports employee morale and motivation; when employees perceive that they are compensated fairly in comparison to their colleagues, it fosters a positive work environment and reduces dissatisfaction. Internal equity ensures that the organization's compensation policies align with its values and culture, helping retain talent and minimize turnover. It is distinct from external equity, which focuses on how an organization's pay compares to market rates and standards. By prioritizing internal equity, organizations can promote a sense of belonging and fairness among their workforce.

The concept of 'internal equity' refers to the fairness and consistency of compensation among employees within the same organization. It evaluates whether employees who have similar roles, responsibilities, skills, and performance levels receive similar pay. This principle is essential because it supports employee morale and motivation; when employees perceive that they are compensated fairly in comparison to their colleagues, it fosters a positive work environment and reduces dissatisfaction.

Internal equity ensures that the organization's compensation policies align with its values and culture, helping retain talent and minimize turnover. It is distinct from external equity, which focuses on how an organization's pay compares to market rates and standards. By prioritizing internal equity, organizations can promote a sense of belonging and fairness among their workforce.