Internal and External Equity

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Wage Management Process and Rationale

To keep the best and most qualified employees, employers must be ready to pay what is necessary to keep them. ContEx compares total compensation packages for employees with similar jobs in the same industry will ensure fairness and rationale. To do this, a job analysis, job evaluation, wage and salary survey, preparation of wage structure, and development of pay structures must be completed by human resources and management. Human resources will conduct a job analysis for each job by grouping, or by department. A job evaluation for each job will be assessed for its relative worth to the organization. A wage and salary survey will be conducted with other employees from other organizations in the same market and determine the different pay levels for each job group. The preparation of the wage structure will have several levels, career bands, or job families each group having a minimum and maximum wage or salary associated. When developing the different pay ranges, each pay range will the minimum pay for that level and a maximum pay for that level attached to it. When the maximum range is reached, the employee is promoted to the bottom of the next level up (Hrcouncil.ca, 2016). Comparing total compensation packages with similar organizations creates the rationale for the wage management process. An employee's total compensation package should create enough motivation to improve employee performance, set industry standards, and reach organizational goals and objectives.

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References

Hrcouncil.ca, (2016)http: Compensation and Benefits. Approaches and Techniques to Determine Pay. Retrieved from http://www.hrcouncil.ca/hr-toolkit/compensation- wages.cfm.

Kokemuller, N., (2016). The Advantages of Internal Equity in a Compensation Plan. Retrieved from http://smallbusiness.chron.com/advantages-internal-equity-compensation-plan- 81169.html.

Martocchio, J., (2014). Strategic Compensation: A Human Resource Management Approach. Eighth Edition. Published by Prentice Hall. Retrieved from University of Phoenix e-book Library.

Wagewatch, (2016). Best Practices: Balancing Internal and External Pay Equity. Retrieved from http://ibrief.wagewatch.com/2012/12/20/best-practices-balancing- internal-and-external-pay-equity/.