Which of the following best describes internal equity?

Internal equity refers to the fairness in compensation within an organization, and the choice indicating this captures its essence effectively. It focuses on ensuring that employees performing similar jobs, or those whose roles require comparable skills and responsibilities, are compensated fairly relative to one another. This concept is crucial as it promotes morale, reduces turnover, and fosters a sense of justice among employees. By ensuring that pay is equitable within the organization, employers can maintain motivation and satisfaction among their workforce.

The other options touch on different aspects of compensation and equity but do not define internal equity specifically. For instance, comparing pay rates with market averages and analyzing external salary surveys are focuses on external equity, which addresses how the organization’s pay compares to the wider job market. Job performance rating consistency is related to performance management rather than how pay is structured within the organization itself. Thus, the choice that describes internal equity best is the one emphasizing fairness in compensation within the organization.