While setting pay levels initially, an organization has to balance internal equity and external equity. Here external equity indicates ________.
A) the amount of growth opportunities the job provides to the employee
B) the worth of the job to the employee
C) the worth of the job to the organization
D) competitiveness of an organization's pay relative to pay elsewhere in its industry
E) the amount of job satisfaction the job provides to the employee

Question

Quizplus · Accepted Answer

External equity refers to the competitiveness of an organization's pay relative to pay elsewhere in its industry. It is important to consider external equity to ensure that the organization's pay levels are competitive enough to attract and retain talent.

While Setting Pay Levels Initially, an Organization Has to Balance