Pay equity is the concept that employees should receive proportionally fair treatment in terms of pay based on their contribution and investment in the employment relationship and on clearly-defined expectations as communicated to the employees from time to time. When discussing pay equity, perception is the same as reality because employees’ perception of their compensation directly impacts job satisfaction and engagement; both of which are critical to the achievement of business objectives.

In recent times, the issue of pay equity has generated more debate, with countries setting up laws to guide fair treatment in the workplace. These laws typically examine pay equity from the perspective of eradicating unwarranted pay discrimination based on race, gender and other factors.

This article looks at pay equity from the perspective of utilising an effective pay structure to achieve an organisation’s reward strategy.

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