ABSTRACT
Determining pay has never been an exact science. Fixing the appropriate level of pay and benefits is at the core of reward management systems and there is a substantial literature on the techniques and data available to do this. Various criteria may be used in fixing the pay of an individual, both within the organisation and in relation to the external labour market. While establishing relationships between different jobs and occupations which meet the needs of internal equity is a primary concern in the design of pay systems, linking these pay and grading structures to the external labour market and keeping pay levels competitive is also a vital concern. As Robinson (1973: 7) has argued:
The concept of fairness when applied to wages is inevitably a concept which requires comparisons. It is not possible to decide whether someone is fairly paid until one knows what other people are paid. . . . Differentials and relativities lie at the very heart of the concept of equity as applied to wage determination.
