Reference no: EM132749131

Question 1: An employee at Clearwater Electronics has contacted the HR department about her salary. She had been told that a recent hire with the same job and skill set was offered $1,000 more per year than she was. She wanted to know if the rumor was true and, if so, what the company was going to do to about the situation. After reviewing both jobs, it was determined that the employee should be given a pay raise to match that of the recent hire plus another 25 cents per hour. The employee was appeased, but the situation was messy and awkward. Given this example, why is it important that Clearwater Electronics have internal equity in its compensation system?

Option 1: Internal equity allows a company to compare their salaries to those of competing organizations.
Option 2: Internal equity allows the company to balance two factors-the cost of workers and the rapidly moving job market.
Option 3: Internal equity contributes to a company culture of fairness, and employees are more likely to feel valued and less likely to claim discrimination.
Option 4: Internal equity allows for a company to pay different wages depending on the seniority of its employees.