Internal Equity was the main disscussion in our group today. We talked about how employees develope their own perpective about how faily they are being paid from a number of factors including the pay of others within the organization as wel as comparing other companies with similar jobs.
There must be a balance between the employees pay and why they are being paid the amount they are. If they are being paid less then someone else for the same job without believing that the other person works harder or is more qualified, there will be a sense of unbalance and disappointment. Companies should be responsible to inform their employees of why they are paid the way they are, by doing performance appraisals and/or showing the current rates in the general market for a job similar to theirs.