For each of the following base pay rates for individual employees, calculate the
ID: 331559 • Letter: F
Question
For each of the following base pay rates for individual employees, calculate the compa-ratio for that employee. The compa-ratio can be calculated by dividing an employee’s salary by the midpoint of the range that employee’s job is in. The range midpoints are shown below. Be sure to show your calculations.
(2) Then, determine whether the base pay for each of the following employees falls into the acceptable range for the job structure. If not, discuss whether it is a red- or green-circle pay rate, and discuss how you would deal with it (e.g., raising pay, freezing pay, etc.). Recall that red-circle employees have pay above their range maximum, and green-circle employees have pay below the range minimum. The pay ranges for each job are provided below.
Employees:
K. Adams, Accounting Clerk, $44,000
B. Roberts, Administrative Assistant, $24,050
J. Smith, Copy Writer, $36,150
D. Baker, Customer Service Agent, $34,500
C. Jamison, Director of Customer Operations, $94,200
F. Anderson, Executive Assistant, $51,000
S. Taylor, File Clerk, $28,600
A. Hernandez, Market Research Analyst, $66,350
M. Wee, Marketing Director, $116,000
J. Yang, Office Manager, $59,000
Pay Ranges:
Accounting Clerk
Midpoint: 40301
Minimum: 36271
Maximum: 44331
Administrative Assistant
Midpoint: 28966
Minimum: 26069
Maximum: 31863
Copywriter
Midpoint: 40301
Minimum: 36271
Maximum: 44331
Customer Service Agent
Midpoint: 28966
Minimum: 26069
Maximum: 31863
Director of Customer Operations
Midpoint: 126855
Minimum: 95141
Maximum: 158569
Executive Assistant
Midpoint: 48225
Minimum: 40991
Maximum: 55459
File Clerk
Midpoint: 23831
Minimum: 21448
Maximum: 26214
Market Research Analyst
Midpoint: 54318
Minimum: 46170
Maximum: 62466
Marketing Director
Midpoint: 126855
Minimum: 95141
Maximum: 158569
Office Manager
Midpoint: 54318
Minimum: 46170
Maximum: 62466
Example:
Suppose that S. Rogers is an accounting clerk making $42,000.
His compa-ratio would be $42,000/$40,031 = 1.05.
Because his pay is within range (i.e., more than $36,271 and less than $44,331), he is not green circle or red circle.
Suppose that we have two other accounting clerks, T. Stark and P. Parker, who are paid $45,000 and $35,000, respectively.
T. Stark would be a red-circle employee because $45,000 is above the range maximum of $44,331.
P. Parker would be a green-circle employee because $35,000 is below the range minimum of $36,271.
Explanation / Answer
A formula for Compa Ration:-
Compa Ration = actual pay rate / the midpoint for the respective pay grade
Compa Ratio of Employees:-
K. Adams, Accounting Clerk, $44,000
For accounting clerk:-
Midpoint: 40301
Minimum: 36271
Maximum: 44331
Compa Ratio for K. Adams =$44000/$40301 =1.09
K. Adams is not green circle or red circle as his salary lies between the maximum and minimum pay range.
B. Roberts, Administrative Assistant, $24,050:-
For Administrative Assistant
Midpoint: 28966
Minimum: 26069
Maximum: 31863
Compa Ratio =$24050/28966=0.83
B. Roberts would be a green-circle employee because $24,050 is below the range minimum of $ 26069
J. Smith, Copy Writer, $36,150
For Copywriter
Midpoint: 40301
Minimum: 36271
Maximum: 44331
Compa Ratio =$36,150/40301=0.897
He would be a green-circle employee because $36,150 is below the range minimum of $ 36271
D. Baker, Customer Service Agent, $34,500
For Customer Service Agent
Midpoint: 28966
Minimum: 26069
Maximum: 31863
Comp Ratio =$34,500/$28966=1.19
He would be a Red-circle employee because $34,500 is above the range maximum of $31863
C. Jamison, Director of Customer Operations, $94,200
For Director of Customer Operations
Midpoint: 126855
Minimum: 95141
Maximum: 158569
Compa Ratio = $94,200/$126855= 0.74
He would be a green-circle employee because $94,200 is below the range minimum of $ 95141
F. Anderson, Executive Assistant, $51,000
For Executive Assistant
Midpoint: 48225
Minimum: 40991
Maximum: 55459
Compa Ratio= $51,000/$48225=1.057
He is not green circle or red circle as his salary lies between the maximum and minimum pay range
S. Taylor, File Clerk, $28,600
For File Clerk
Midpoint: 23831
Minimum: 21448
Maximum: 26214
Compa Ration =$28,600/$23831 =1.2
He is red circle as his salary lies above the maximum pay range
Hernandez, Market Research Analyst, $66,350
For Market Research Analyst
Midpoint: 54318
Maximum: 62466
Compa Ratio = , $66,350/$54318 =1.22
He is red circle as his salary lies above the maximum pay range
M. Wee, Marketing Director, $116,000
For Marketing Director
Midpoint: 126855
Minimum: 95141
Maximum: 158569
Compa Ratio= $116,000 /$126855 = 0.91
He is green circle as his salary lies below the minimum pay range
J. Yang, Office Manager, $59,000
For Office Manager
Midpoint: 54318
Minimum: 46170
Maximum: 62466
Compa Ratio = $59,000/$54318=1.08
He is not green circle or red circle as his salary lies between the maximum and minimum pay range
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