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1 Fairness, or equity, is an important concept in creating a company's compensation system. Answer the following questions dealing with establishing equity in a compensation system.
a. Why is equity important when creating a compensation system?
b. What happens if employees see the pay system as unfair?
c. Employees will try to determine if their compensation is fair by comparing their salary to those within the company (i.e., internal equity) and those outside the company (external equity). What two HR practices are used to help ensure that internal equity and external equity exist?
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