However the average weighted salary of a data processor is $27,500 therefore, the current pay for a data processor IIs is not externally equitable. The data processors are getting far less even considering the paid leave time than their counterparts in the …show more content…
Moreover the equity theory shows that individuals who are underpaid should not only be less productive but they should also be less satisfied than their equitably paid coworkers. The importance of internal and external equity exists in part because of the way pay structures are set in organizations. Pay is generally based on 3 types of information. It is based on 1. The organization present pay structure, 2. Market surveys of jobs in other organizations, and 3. Results of job evaluations done within the organization. Furthermore, market surveys are designed to reflect the external worth of jobs. So all in all, companies with a stronger external influence on pay structure may be more interested in recruitment and hiring which would essentially increase turnover. Market rates account for the greatest differences in pay suggesting that managers place more importance on external factors than internal factors (Livingstone, Roberts, & Chonko,