THE IMPACT OF COMPENSATION TRANSPARENCY ON INTERNAL AND EXTERNAL EQUIT (KEY IJP************727)

• Babli Pandey

Abstract

Internal Equity: Ensuring that employees are compensated based on their contributions to the organization, without discrimination based on personal characteristics such as gender, race, or age. External Equity: Pay levels of an organizations employees in comparison to those of its competitors in the same industry or market.Compensation Transparency: Ensuring that employees are informed about the company's pay practices and can understand and navigate the company's compensation system. Importance: Compensation equity is an important and long-standing civil rights topic. It is crucial for attracting and retaining top talent, and for promoting fairness and employee satisfaction within an organization. Best Practices: Conducting a thorough job analysis, establishing a job evaluation system, developing a pay structure, and communicating it to employees openly. Challenges: Resistance to change from employees, limited resources, lack of leadership support, and managing employee expectations and concerns.Maintaining Equity: Regular review and evaluation of the pay structure, updating the pay structure based on job market or organizational needs, addressing, and correcting any disparities in pay, and consistent communication with employees.Achieving Fairness and Competitiveness in Compensation: An Exploration of Internal and External EquityCompensation is a crucial aspect of human resource management, directly impacting employee satisfaction, retention, and productivity. This research explores the concept of compensation transparency and equity, examining both internal equity (fairness within the organization) and external equity (competitiveness with industry standards). Using a mixed-methods approach, we analysed compensation data from Organization and conducted interviews with HR professionals and employees. Our findings reveal significant pay disparities based on gender and race, as well as a need for adjustments to the compensation structure to meet industry standards. We propose recommendations for addressing pay equity issues and developing a fair and competitive compensation policy. This research contributes to the ongoing conversation on compensation transparency and equity, providing insights for organizations seeking to promote fairness, diversity, and excellence.Keywords: compensation transparency, internal equity, external equity, pay disparities, fairness, competitiveness.