Question

"Equity" is a key concept in compensation. Read Matthew 20:1-15. As we see, it was also important to workers two thousand years ago. Why does equity matter? What steps can be taken to see that employees are compensated equitably?

Answer 1

"Equity" is a key concept in compensation. Read Matthew 20:1-15. As we see, it was also important to workers two thousand years ago. Why does equity matter? What steps can be taken to see that employees are compensated equitably?

Equity literally means ownership. If you buy equity share of a company, you become owner of that company in the amount of shares you hold. Similarly equity in compensation means non-cash pay that represents ownership in the firm. Such equity can take place in various forms; options, restricted stock and performance shares. It allows employer to share profit with employees via appreciation and courage retention.

This not culture of 21^st century but choice of emperors since thousands of years ago. Where the king handovers a small bag of gold coins to a person who does great job. This recognition is very precious and necessary for employees or people who work for employer.

Steps can be taken to see that employees are compensated equitably

There are various steps that an employer can take to ensure that the employees are compensated equitably

1. Male v/s female: The pay scale of both the gender should be same, since the male candidates can be recruited from outside whereas females can be promoted internally.
2. Comparable compensation: HR should have a look at what the rivals re paying in which location and budget CTC should be prepared accordingly, so as the comparison with peer group doesn’t harm employees.
3. Flexible schedule: In our society it is often believed that a women has to take are of home, she is mother, wife and home maker, if she is willing to work with you, offer him flexibility to work from home, telecommuting the work or discounted hours. So that she can manage her office and home together.
4. Periodic training: It is very important to keep the employees updated with the changes in industry and position of peers. Accordingly a proper training should be given to employees, hence they are confident enough to beat the changes.

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