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Equity vs. Equality and Merit in Compensation

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Whereas, the principle of equity is important in an organization, because individuals feel more comfortable and attached to groups of people if they feel that they will be looked after, cared for and treated according to their expectations, with their needs being met, there is also a need to provide equal opportunity and equal treatment. Pay equity refers to the notion of equal pay for work of equal value which has to be performed by individuals within the organization (Amey, 2002, Pp. 26 – 29). A job that is to be performed when working for an organization has to be studied carefully with regard to what is involved in performing the job.

Some of the factors that need to be considered when trying to establish pay equity include the skills that are required in order to perform the job, the effort that is involved, the level of responsibility that is involved and the working conditions in which a worker will be performing the job. Individuals within an organization will themselves understand pay equity as they gauge the fairness their work outcomes in relation to those of others.

Adam’ s Equity Theory proposes that when individuals are faced with perceptions of them being unfavorably rewarded in comparison to others, they will try to act to remove the inequity and to restore equity. Underpayment for equal work being performed will result in a loss of work output, employee productivity or attempts to find other more equitable employment, while overpayment for work being performed can result in guilty feelings. Hence, it is important that an employee’ s job is to carefully evaluated order to correctly compensate them for their work.

Much of the emphasis that has been placed on pay equity arose out of the struggle of women to win equal pay for their work as they had been receiving discriminatory treatment at work as a result of the patriarchal notions that their place in a society was at home. Job evaluation systems attempt to assess the complexity of a job and not the performance of the employee when performing the job in determining the compensation that needs to be paid.

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