Compensation and Benefits

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Business Finance

Northcentral University

Description

Write an article draft analyzing the concepts of internal and external equity and apply these concepts to an examination of pay versus benefits in organizations. Include in the analysis, a comparison of the advantages and disadvantages in designing compensation and benefit programs that focus on external market competitiveness or that are structured to promote internal equity. Support your analysis based on current research incorporating three journal articles or publications into your response.


Support your paper with at least five (5) resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included. Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University's Academic Integrity Policy.

Length: 5-7 pages (not including title and reference pages).

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Assignment Rubric

The following shows the criteria used to grade this Assignment:

Grading Rubric
Criteria
Content (6 points)Points
1Analyzes the concepts of internal and external equity and apply these concepts to an examination of pay versus benefits in organizations30
2Analyzes and compares the advantages and disadvantages in designing compensation and benefit programs30
3Focuses on external market competitiveness that promotes internal equity.30
Organization (4 points)
1Organized and presented in a clear manner. Included a minimum of five scholarly references, with appropriate APA formatting applied to citations and paraphrasing.10
Total100

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Explanation & Answer

Attached.

Running head: COMPENSATION AND BENEFITS

Compensation and Benefits
Student’s Name
Institutional Affiliation

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COMPENSATION AND BENEFITS

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Introduction

Much of an organization’s budget is allocated for employee compensation, and this
showcases the significance of a compensation program in the HR management plan.
Compensation programs have drawn attention from various researchers and business
practitioners who are mandated with the role of developing a strategic management plan for
multiple organizations. Pay policies play a crucial role in influencing how workers behave, their
morale and the performance of the organization (Flannery et al., 2002). This paper explores the
internal and external concepts of equity, their impact on the benefits and compensation program
and how to match external market competitiveness with internal equity.
The Application of the Concepts of Internal and External Equity in examining pay versus
benefits in organizations.
Employees deserve to be compensated reasonably based on their contribution towards the
achievement of company goals. The internal and external forces in compensation are vital in
dictating the pay structure. A fair compensation program should take into consideration internal
equity to ensure that the base pay of each employee matches the contribution of their jobs
towards the achievement of the company goals (Knesl et al.,2013). In the quest to ensure external
equity, companies must continuously evaluate how other companies in the same line of
profession compensate their workers. The primary motive is to ensure that all parties or
employees are receiving the same benefits as their peers working in the same or other
organizations but within the same line of expertise.
Companies need to convince their workers that they are compensating them
competitively. Incidences of overpayment or underpayment will create a different and unfair

COMPENSATION AND BENEFITS

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atmosphere that can have a detrimental impact on an organization. Employees need to be assured
that every employee in the organization receives the same wage and benefits. Additionally,
employees have to feel that the compensation package matches the value of their work.
Companies have to emphasize equivalent responsibilities and qualifications rather than the
similarity of each job (Gerhart et al., 1995). This means that internal equity can be evaluated
against the external equity due to the aspect of universality. Responsibility refers to the degree of
knowledge, level of expertise and...


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