SPHR · Question #19
In compensation system development, internal equity conflicts directly with which other element?
The correct answer is C. Market competitiveness. Internal equity ensures fairness among current employees, while market competitiveness is about offering externally attractive pay. These can conflict when market rates exceed internal benchmarks, creating compression or morale issues. Extract from HRCI-aligned HR knowledge…
Question
In compensation system development, internal equity conflicts directly with which other element?
Options
- ARecruitment efforts
- BEmployee satisfaction
- CMarket competitiveness
- DProcedural fairness
How the community answered
(20 responses)- A10% (2)
- B5% (1)
- C60% (12)
- D25% (5)
Explanation
Internal equity ensures fairness among current employees, while market competitiveness is about offering externally attractive pay. These can conflict when market rates exceed internal benchmarks, creating compression or morale issues. Extract from HRCI-aligned HR knowledge (Total Rewards): SPHR guidance includes "balancing internal consistency with external competitiveness in pay structures." HR leaders must mitigate conflicts through pay bands, variable pay, or phased market adjustments.
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