In order to determine how much to pay each employee, managers evaluate the job they do. Most do this informally and by guesswork. And yet as the firm grows, pay is one of the key sources of injustice felt by employees - injustice in both the resulting pay awarded and in the method by which the pay is determined. This video sets out five methods by which pay can be arrved at rationally. Using these pay decisions can be justified.
Managers must strive not to get pay wrong. Staff evaluate their effort/reward ratio and compare it with the perceived effort/reward of their colleagues. Feelings of injustice and lack of fairness arise where one employee perceives that one person's effort/reward is not in line with their own.
This video describes five methods of job evaluation from the simplest Job Ranking through to the more complex Point Factor Analysis where jobs are described by factors and points awarded to each.