Internal Equity & External Competitiveness: Strategies for Reconciliation

Content Summary

“Internally equitable” and “externally competitive” are terms appearing in many policy manuals, compensation philosophy statements and articles on managing compensation. Employees expect both concepts to be driving the administration of their compensation. The terms are most frequently referred to when base pay management is the topic. However, all forms of rewards should be managed with both as objectives. Each has a different focus, due to the use of either internal or external comparisons. Yet they most be reconciled with each other if pay structures and other reward programs are to function well.

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