Which statement best defines compa-ratio?

Which statement best defines compa-ratio?

• A. A total amount of benefits an employee receives.
• B. A number that compares an employee's salary to the midpoint of salaries for the same job.
• C. The process of resolving workplace conflicts.
• D. The legal compliance of an organization's HR policies.

Answer: (B)

Compa-ratio is a way to see how an individual’s pay compares to the market for the same job. It’s calculated by taking the employee’s current base salary and dividing it by the market midpoint (the midrange of typical pay for that job), then usually expressed as a percentage. If the result is around 100%, the pay is at market; below 100% means the employee is paid under the market, and above 100% means they are paid above the market. This measure helps HR assess pay equity and competitiveness and informs decisions about salary adjustments or pay-range updates. It’s specifically about how pay stacks up against the market midpoint, not about total benefits, conflict resolution, or policy compliance.

Compa-ratio is a way to see how an individual’s pay compares to the market for the same job. It’s calculated by taking the employee’s current base salary and dividing it by the market midpoint (the midrange of typical pay for that job), then usually expressed as a percentage. If the result is around 100%, the pay is at market; below 100% means the employee is paid under the market, and above 100% means they are paid above the market. This measure helps HR assess pay equity and competitiveness and informs decisions about salary adjustments or pay-range updates. It’s specifically about how pay stacks up against the market midpoint, not about total benefits, conflict resolution, or policy compliance.