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Importance of managing pay equity and the consequences of the failure
Pay equity can be described as the art of paying an employee for work
of equal value. Whereas a seniority system may exist under applicable
employment legislation, the bargaining agents and the employer can
negotiate equal pay or pay equity. It is critical to note that employers
must take into consideration the aspect of managing pay equity.
Employees have become extremely proactive in the search of their rights
in terms of pay for equal work. Failure by employers to harmonize pay
may lead to prolonged court battles (Audrey, 2013). In addition, it is
paramount to note that managing pay equity is critical in retaining
employees and job satisfaction. Retention of employees on the other hand
aids in the good reputation of the organization in the market hence
improved sales.
Employers must take note that failure to manage pay equity may have
adverse effects on their organizations. For instance, if an employee
successfully wins a complaint regarding low salaries, the employer may
be compelled to back date the pay to over six months (Audrey, 2013). In
addition, the failure to manage pay equity may lead to numerous times
being wasted in court rooms as both parties seek to win the case.
Therefore, it is critical for employers both in the private and public
sector to comply with the set standards for pay equity to avoid cost and
time wastage.
Pay equity is a critical factor in job satisfaction. It is evident that
an employee who is satisfied with his or her pay will translate this
satisfaction into enormous job output. When there is harmonization of
pay, employees are motivated, hence their productivity goes up. Pay
equity is one of the primary strategies applied by the Human Resource
managers to improve the morale of employees and enhance productivity.
References
Audrey, W. (2013). Tackling the challenge of pay equality. Sutton: Reed
Business Information UK.
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