Define compression as an auditing criterion and explain how to obtain the degree of compression for a particular salary level
What will be an ideal response?
ANS:
Compression addresses potential economic growth of employees within a particular salary level or classification level unique to any particular school district. For each salary level or pay grade comprising a compensation system within a public school district, the base rate of the lowest paid employee is divided by the maximum allowable base rate associated with the targeted pay grade within which the employee is assigned. The result of this division is then converted into a percentage. This percentage reflects the actual growth potential associated with a particular pay grade for current employees. The smaller the number obtained by the calculations reflecting compression, the greater the compression exhibited by the compensation system.
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