Pay equity is, in essence, equal pay for work of comparable value. The Pay Equity Act states that jobs must be evaluated and work mostly or traditionally done by women be compared to work mostly or traditionally done by men.
If jobs are of comparable value, then female jobs must be paid the same as male jobs.
Internal equity is, in essence, equal pay within the organization for individuals doing the same job, with the same qualifications, education or other job-related criteria.
An internal equity adjustment may be appropriate when salary inconsistencies are found due to differences in the compensation paid to staff members in the same classification with equal years of service within the classification which cannot be explained by differences in education, training, and/or job performance.
External equity is, in essence, organization’s pay rates based on the market rates.
An external or market equity adjustment may be appropriate when salary inconsistencies are found because salary survey data indicates that the mean or median salary for a like position in the outside market is considerably higher than the compensation paid to a staff member within the organization.