Here is the synopsis of our sample research paper on ORGANIZATIONAL EFFECTIVENESS, INTERNAL EQUITY AND EXTERNAL EQUITY. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 3-page paper discusses whether internal equity or external equity is better for organizational effectiveness. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: AS43_MTintextor.rtf
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Unformatted sample text from the term paper:
organization is one that is better able to meet its goals. One way in which an organization is able to meet its goals is through a fair method of determining
compensation. One point of contention among many organizational members is that of internal equity and external equity, especially when it comes to
pay. The next question we need to ask, therefore, is what is more important for organizational effectiveness - internal equity or external equity? To answer this, lets examine these two
factors. Internal equity is defined as fairness in employment contracts or compensation programs if the employee compares him/herself with other employees in the
organization (Pay Structures/Compensation). The salary, in other words, is being set by internal forces (in other words, employees compare themselves to one another. For example, at Ben & Jerrys it
used to be that executives couldnt earn more than three times the salary of the lowest line worker. This meant that even if a CEO at another company in Vermont
was earning $500,000 a year, if that lowest line employee at Ben & Jerrys was only pulling about $50,000 a year, that meant the CEO would only earn around $150,000
(plus stock options and other benefits, but thats not germane to this discussion). External equity, on the other hand, is market pricing. Its
what a particular job in the field is pulling from an area-wide (or industry-wide) perspective (Pay Structures/Compensation). Going back to our Ben & Jerrys example, if most CEOs of Vermont
corporations are pulling $400,000 annually, then it wouldnt matter what the internal situation was at Ben & Jerrys. The compensation structure would reflect what the market would bear - and
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