SHRM Senior Certified Professional (SHRM-SCP) — Question 12

A company recently conducted a market survey of the salaries of apprentice electricians. Which factor of a job-based compensation plan would this be?

Answer options

• A. Internal equity
• B. External equity
• C. Individual equity
• D. Peer equity

Correct answer: B

Explanation

The correct answer is B, as external equity refers to how a company's pay rates compare to those in the external market. Internal equity relates to pay fairness within the organization, individual equity focuses on the compensation of specific employees, and peer equity concerns compensation among similar roles within a specific group.