How do organizations compare actual pay to pay structure?

What will be an ideal response?


As part of its management responsibility, the HR department should compare actual pay to the pay structure, making sure that policies and practices match. A common way to do this is to measure a compa-ratio, the ratio of average pay to the midpoint of the pay range. Assuming the organization has pay grades, the organization would find a compa-ratio for each pay grade: the average paid to all employees in the pay grade divided by the midpoint for the pay grade. If the average equals the midpoint, the compa-ratio is 1. More often, the compa-ratio is somewhat above 1 or below 1. Assuming that the pay structure is well planned to support the organization's goals, the compa-ratios should be close to 1. A compa-ratio greater than 1 suggests that the organization is paying more than planned for human resources and may have difficulty keeping costs under control. A compa-ratio less than 1 suggests that the organization is underpaying for human resources relative to its target and may have difficulty attracting and keeping qualified employees. When compa-ratios are more or less than 1, the numbers signal a need for the HR department to work with managers to identify whether to adjust the pay structure or the organization's pay practices. The compa-ratios may indicate that the pay structure no longer reflects market rates of pay, or maybe performance appraisals need to be more accurate.

Business

You might also like to view...

The profitability index is computed by dividing the present value of net cash flows by the initial investment.

Answer the following statement true (T) or false (F)

Business

The higher the expected rate of inflation:?

A. ?the lower is the loss in purchasing power of investors. B. ?the higher is the required rate of return on investment. C. ?the lower is the maturity premium required by the investors. D. ?the higher is the money supply in the economy. E. ?the lower is the tax rate in the economy.

Business

Division A makes a part with the following characteristics: Production capacity in units 15,000unitsSelling price to outside customers$25 Variable cost per unit$18 Total fixed costs$60,000 ?Division B, another division of the same company, would like to purchase 5,000 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $24 each.?Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division A refuses to accept the $24 price internally and Division B continues to buy from the outside supplier, the company as a whole will be:

A. worse off by $10,000 each period. B. worse off by $35,000 each period. C. worse off by $30,000 each period. D. better off by $15,000 each period.

Business

A loss of _________ is the disruption of access to or use of information or an information system

What will be an ideal response?

Business