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Job Grades Salary Ranges Compa-ratios (CR) a compa-ratio (comparative ratio) is a measure of the extent which the average salaries in a grade deviate from the target salary. it is used to compare actual averages with the target salary to indicate the extent which salary levels are high or low. the formula for calculating a compa-ratio is: Average of all salaries in the grade --------------------------------------------------------------------------------------------------------------------------------------------------------------- x 100 Midpoint of the salary range a compa-ratio of 100 indicates that the average salary is aligned to the midpoint of the salary grade and no corrective steps need to be taken. Compa-ratios (CR) a compa-ratio of 80 would indicate a need to investigate why average salaries were low and possibly no longer competitive. a compa-ratio of 120 would suggest either there were a lot of long-service staff or that staff were being overpaid, and that increases needed to be modified. compa-ratio analysis can reveal a situation where earnings drift has taken place. Competitive Posture (CP) Competitive Posture is a measure of how competitive the salary is with respect to a given market benchmark. Competitive Posture can be used to measure the competitiveness of both company’s or individual’s salary competitiveness in the market Competitive Posture for a company is computed as: CR = Average of all Salaries in a given Job Grade Market Benchmark Salary Competitive Posture for an individual is computed by: CR = Salary of the individual Employee Market Benchmark Salary Salary Administration Minimum Salary Points 1. Minimum salary for the grade 2. Minimum for Job In the market 3. Set compa-ratio at 1 .00 4. Overlap between 60% to 80% 5. Avoid leapfrogging tendencies 6. Allow for realistic minimum Salary Administration Maximum Salary Points 1. Maximum salary for the grade 2. Maximum for job in the market 3. Keep salary range short (8 - 12
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