Assignment Overview The compa-ratio helps organizations determine if they are paying their employees fairly or if they are mismanaging their finances

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Assignment Overview

The compa-ratio helps organizations determine if they are paying their employees fairly or if they are mismanaging their finances. The compa-ratio can also help employees raise their awareness of their worth when compared with similar types of professional occupations. This Case Assignment is designed to help you raise your awareness of this ratio and use that information to make appropriate financial and business operations decisions. 

Case Assignment

Start by reading the following short article that can found in the Trident Online Library:

Ladika, S. (2005). Decompressing pay. HRMagazine, 50(12), 79-82. Retrieved from ProQuest in the Trident Online Library.

Next, complete the following steps to see if you are a red-circled employee or green-circled employee, and more importantly, determine your market value both as a civilian and (if applicable) as a service member. If you are not currently working, then complete this assignment based upon a prior job. Please know that the information within this assignment will remain completely confidential within the course and will only be assessed based on the assignment requirements.

We understand that this assignment can be a little tricky if you are in the military. However, the learning objectives in this assignment will assist you in a number of ways. Furthermore, the following site has some useful information for those in the military where you can put in your MOS and receive civilian work equivalents: O*Net Military Crosswalk Search: https://www.onetonline.org/crosswalk/MOC?b=A&s=MOS-25C-001&g=Go

Step 1

Research what the pay range is in the market for a position that is comparable to yours. This information can be located using the U.S. Bureau of Labor Statistics (www.bls.gov) or the Occupational Network Online (https://www.onetonline.org/).

Step 2

Find the midpoint or average of the market pay range for your position.

Step 3

Divide your current pay by the pay range midpoint. If your compa-ratio is above 100 percent, your pay is above market value and, if it is below, then it is below market value.

Example:

$76,000.00 (current pay)

Employee Joe Smith = ---------------------------------------- x 100 = 76% (Compa-ratio)

$100,000.00 (midpoint)

Strategically using the compa-ratio values during performance appraisals can be helpful to determine the maximum and minimum amounts for salary increases. Usually, an 80%-100% compa-ratio is the norm; however, each organization will have their own standards. In the example above, a raise would be necessary.

As a practical example, if an employee “exceeds expectations” in all areas of a performance review and has a current compa-ratio of 76%, then the HR manager can recommend a higher raise to meet the specific organization’s minimum standard of all jobs having a 80% - 90% compa-ratio to stay competitive in the market.

Once you have finished computing your compa-ratio, write a 1- to 2-page paper addressing the following questions:

1. Discuss your calculations, your compa-ratio, and the impact of your compa-ratio compared against the market. How satisfied are you with your pay and why?
2. Next, as an HR Manager, what are the implications of all employees being underpaid in a company? How would you deal with this dilemma? How does employee and organizational performance relate to compensation?
3. After conducting some research and reading the background readings, how would you determine a fair pay adjustment budget?