Question

Explain the concept of Internal Equity and describe how Job Evaluation (JE) serves as a
primary tool to establish it within an enterprise. Compare and contrast the Point Rating
Method and the Factor Comparison Method of job evaluation, highlighting their pros and
cons.

09 Jul 2026
Answer :
Word Count : 728
Internal Equity refers to the fairness of pay relationships among different jobs within the same organization. It ensures that employees receive compensation according to the relative value, responsibility, complexity, skills, effort, and working conditions associated with their jobs. Internal equity helps eliminate unjustified wage differences, promotes employee satisfaction, reduces grievances, and strengthens trust in the organization's compensation system. It is an essential principle of Compensation and Rewards Management because employees often compare their pay with that of colleagues performing different roles within the organization. A well-designed system of internal equity contributes to motivation, retention, productivity, and organizational harmony. Job Evaluation (JE) is the systematic process of determining the relative worth of jobs within an enterprise. It evaluates the job rather than the individual performing it. The objective is to establish a rational and equitable wage structure based on job requirements. Job evaluation identifies the value of each job by considering factors such as skill, effort, responsibility, and working conditions. The process generally involves job analysis, preparation of job descriptions, selection of compensable factors, evaluation of jobs, ranking of jobs, and development of pay grades. By assigning higher compensation to jobs with greater organizational value and responsibility, job evaluation creates consistency and fairness in salary administration. It also supports recruitment, promotion, career planning, collective bargaining, and compliance with equal
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