Internal Equity

What is Internal Equity?

Internal equity is the practice of paying employees fairly and equitably for similar roles, responsibilities, and experience. When completing a compensation review, positions are compared to similar positions within the department, division/college and across the University. This analysis is done for a variety of reasons, including a need for a compensation recommendation for a newly created position, positions needing to be filled due to a vacancy and promotion requests. Based on both the internal equity analysis and market data, the Human Resources department is able to make a fair and equitable compensation recommendation for a position.

Why is internal equity important?

Applying fair and equitable pay policies is critical for fostering a fair and inclusive workplace. The Equal Pay Act of 1963 (EPA) prohibits wage discrimination, on the basis of sex, and furthermore emphasizes the importance of compensating positions consistently and equitably based on the University’s compensation philosophy. 

Internal equity example:

There are two Administrative Associates hired in two different areas of the University. While there may be slight differences in their positions based on the area they support, the core duties for both Administrative Associates are the same. Because of this, the employees should be compensated similarly.