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I N T E R N A L • E Q U I T Y

What is an Internal Equity Issue?

    Internal equity issues are usually manifested by salary compression, salary inversion due to years of experience and years of service, and wage creep.

    These problems are typically the results of out-dated policies and unabated practices, in particular:

  • Compensation Philosophy Violations
  • Hiring Policies That Ignores Incumbents and Internal Structure But Places Priorities on Filling "Hard-to-Fill Jobs"
  • Promotion Policies and Practices That Ignore Internal Structures But Ensuring The Happiness Of a Select Few

UM Global HR Steps For Conducting Internal Equity Analysis

  • Review of Internal Salary Structures
  • Review of Dates of Hiring
  • Conduct Descriptive Analysis Using Multiple Regression and Factor Analysis For Years of Experience, Salaries in Ranges, Salaries in Grades, Educaton, and Career Ladders.
  • This type of analysis helps us diagnose compensation problems since it shows years of experience that correlates with pay grades or job classification and annual salaries, for example. The anlaysis informs if salary compression or salary inversion is present within the current compensation schedule.

    The table above is a demonstration of the work we completed for a client in Plano, Texas. It shows status and obvious salary compression between grades, incumbents, and recent hires.