Ccua Case

The current pay practices instituted by CCUA are not externally equitable. Based on the information provided within the case study many employees both current and past were not satisfied with their pay or benefits. Therefore, externally equitable goes beyond pay. However, in the case with CCUA, pay serves as a means to attract and retain workers to the company. The best method to utilize would be to increase the pay for he unsatisfied employees. Thus, turnover does not sit well with CCUA as it is affecting productivity and costs. In order to help remedy the issues with pay it would be beneficial to incorporate an action plan or survey to assess the employee views and opinions on what needs to be done to enhance and increase employee satisfaction.
External equity exists when employees in an organization perceive that they are being rewarded fairly in relation to thos who perform jobs in other organizations. After reviewing the data many other similar jobs are being paid considerably more than data processors IIs at CCUA.

Data Processors IIs currently makes $24,960 per years based on a 40 hour work week.
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
market.

Furthermore, computer analysts Is current salary is $31,500, with paid leave of 9 days off minimum for the first years of service increasing by 2 days for every following year with a limit of 21 days of paid leave and health life insurance covered by the company. Based on the Decision Sciences’ chart the average weighted salary of a ‘junior analyst and programmer’ is $35,156. It seems that this job isn’t externally equitable either. Therefore, computer analysts Is are making less than their average ‘junior analyst and programmer counterparts.

Companies with an external orientation are more responsive to market rates for a wide range of positions facilitating recruitment and hiring efforts but perhaps increasing turnover. Because externally oriented firms hire outside job candidates across the entire spectrum of organizational levels, they are directly subjected to market pay pressures at multiple levels. Additionally, to the extent that externally oriented firms are more likely to hire non-entry-level employees away from other organizations, they may have to pay a wage premium (Weber & Rynes, 1991).

External equity pay is market driven. All the more, compensation strategy plays an important role in not only recruiting and retaining employees but also in measures to increase employee satisfaction, reducing turnover, and rewarding top talent, and equally important to enhance employee loyalty (Liza, 2014). Therefore, external equity focuses on monitoring compensation in order to remain competitive and enhance productivity.

It appears that CCUA suffers from much turnover due to employees both past and present feeling as if they are underpaid and not receiving the proper and adequate pay for the work they perform. Therefore, when evaluating and surveying current and past employees the main reasoning behind dissatisfaction is attributed to pay, benefits, simply the employees are not receiving enough pay and the likelihood that there are not enough fringe benefits.

Overall, external equity refers to the perceived fairness of one's rewards relative to other individuals rewards in other organizations.
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,
1995).

So, all in all I do not consider CCUA to have external equitable pay practices. In my opinion, I believe CCUA at least consider paying the data processors and computer analysts the market value for the position. Marketsurvey results show that CCUA pays it's employees in the data processorposition $1,000 to $4,000 less than market average. CCUA also pays itscomputer analyst I's $2,000 to $9,000 less than the market average. By employees not receiving adequate pay this is causing employees to quit and go to other organizations for employment increasing CCUA's turnover ratio significantly. Survey Results from past and current employees show they felt they are underpaid.

Therefore, since pay is a factor for leaving CCUA it can be concluded that employees left for better paying jobs that paid way more equitably in similar positions. Furthermore it is imperative for CCUA to change and alter their pay structures to avoid losing more employees and further to gain a competitive advantage.