The compensation received is equal to the value of work performed which is known as the motivation value of pay equity.
One's level of motivation depends on the attractiveness of the rewards sought and the probability of obtaining those rewards which compensates the pay expectancy.
Explanation:
- Pay equity : Degree to which the actual pay of an employee matches what he or she thinks to deserve. High pay equity means high employee satisfaction with his or her job, low pay equity increases the potential for absenteeism, grievances, strikes, and turnover. Also called pay satisfaction.
- Compensating employees the same when they perform the same or similar job duties, while accounting for other factors, such as their experience level, job performance and tenure with the employer.
- Ensuring employees are paid equitably, employers can increase efficiency, creativity and productivity by helping to attract the best employees, reduce turnover and increase commitment to the organization.
