Internal versus external pay equity: two sides of the same coin?
Pay equity is a core component of a fair and effective reward strategy. For maritime businesses, it plays an important role in attracting, retaining, and engaging talent across global teams.
Organisations are increasingly recognising the importance of achieving both internal and external equity, not only to remain competitive but also to build trust, enhance retention, and support reputation.
Internal pay equity in maritime
Internal pay equity refers to how fairly and consistently individuals are rewarded within an organisation, across departments, locations, and job types. In maritime, where career paths, contract types, and working environments can vary significantly, maintaining internal equity is both complex and critical.
Key areas to review include:
Departmental alignment: Ensuring fair pay levels between functions such as technical, commercial, operations, and support services.
Role comparison across job families: Reviewing consistency in pay across similar roles in different teams or regions.
Legacy issues and pay history: Identifying outdated salary structures or inconsistent progression that may create hidden inequities.
Pay decisions: Auditing fairness in promotions, adjustments, and internal mobility.
External pay equity in maritime
External pay equity focuses on how competitive your organisation’s compensation is compared to the wider market. It’s about ensuring your pay practices reflect the value of roles in the external talent landscape, across regions, specialisms, and competitor benchmarks.
In the maritime sector, this can be particularly complex due to global operations, varying market maturity, and talent shortages in key disciplines. Employers that fall behind external market rates risk losing top talent, facing longer time-to-hire, or struggling with poor job offer acceptance rates.
Key areas to consider include:
Benchmarking roles against relevant market data: Using up-to-date, sector-specific insights to ensure pay is aligned with current norms.
Identifying high-demand roles and adjusting accordingly: Recognising where market scarcity (e.g. technical superintendents, crew managers, naval architects) requires more competitive offers.
Understanding regional pay variations: Factoring in cost of living, taxation, and expectations across key hubs like Singapore, Cyprus, Northern Europe, or the Middle East.
Monitoring peer and competitor pay trends: Staying informed on industry movements, counteroffers, and bidding wars.
Two sides of the pay equity equation
Perceptions of equity and fairness in pay
Employees assess their pay not only by what they receive, but by how it compares to colleagues, to market norms, and to what they believe is fair. Even when compensation structures are equitable on paper, perceptions can tell a different story.
Equity focuses on objective fairness, ensuring consistent pay for comparable work across departments, locations, and individuals. Fairness is how employees feel about those decisions. Both directly impact trust, engagement, and retention.
What Shapes Perceptions of Fairness in Pay
Even the most equitable compensation structures can feel unfair if they lack clarity or consistency. Perceptions are shaped not just by the numbers, but by how employees experience and interpret them.
Common triggers of mistrust include:
Peer comparisons: When colleagues in similar roles earn noticeably different amounts.
Opaque decision-making: A lack of visibility into how salaries, bonuses, or promotions are determined.
Role ambiguity: When job responsibilities aren’t clearly defined, it’s harder to justify differences in pay.
Pay compression: When newer hires earn as much or more than long-serving staff.
Unexplained patterns: Apparent links between pay and factors like age, gender, or location that aren't addressed or acknowledged.
How leaders explain pay matters just as much as how they structure it. Consistency, transparency, and proactive communication are essential to maintaining trust.
Building trust in pay: equity and fairness in action
What shapes perception and how to respond:
Peer comparisons: Share salary benchmarking logic and internal equity efforts
Lack of transparency: Explain processes and decision-making criteria
Role ambiguity: Define job levels and expectations clearly
Inconsistent decisions: Standardise pay review and promotion process
Poor communication: Train managers and improve messaging from HR
This insight is an extract from The Strategic Compensation Report 2025.
You can download the full report here.
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