Job Evaluated Survey Contributor Report: Contributor Report

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Job Evaluated Survey Contributor Report Contributor Report:
description of Compa-Ratio ranges.

Compa-ratios are calculated as the ratio of the amount actually paid to an individual, divided by the amount that would be paid to a fully competent performer in the job. This ratio is expressed as a percentage.

The compa-ratio therefore gives a measure of how an individual is paid relative to a competent performer in the job. If the compa-ratio is 100% then the individual is being paid in line with a competent performer. If the compa-ratio is greater than 100% them the individual is being paid more than what a competent performer in the job would be normally. Conversely, if the compa-ratio is less than 100% the individual is being paid less than what the competent performer in the job would be on average.

This analysis can be used to align an individual's pay with their performance and in this regard is a valuable tool in the implementation of reward for performance.

Consider the second job, Engineering Manager, for an example of how the compa-ratio is calculated:

The actual total remuneration paid to the position is $108,040. The total remuneration that would be paid to a fully competent performer in the job is $113,835. This second figure is calculated from the points for the job, 860, and the Total Remuneration practice line formula ($128.06 per point, plus $3,703) as follows:
$128.06 multiplied by 860, plus $3,703

The compario for the position, therefore, is:
$108,040 divided by $113,835, expressed as a percentage, ie 95%.

This 95% expresses the degree to which the position is paid more than what a fully competent performer in the job can be expected to be paid.

The comparatio can be interpreted in terms of incumbent performance requirements to warrant the pay level as follows:

A commonly accepted range for compa-ratios is 80% to 120%, which in turn can be divided into five zones, ie:

80-87%
88-95%
96-103%
104-111%
112-120%

Each one of these zones is associated with a pre-defined level of performance, with 100% representing fully competent performance in the job.

The five compa-ratio zones range from the lowest level for new, inexperienced incumbents, or unsatisfactorily performing incumbents, through to the highest level reserved for those universally recognised as outstanding performers.

A broad definition of each zone is therefore:

80-87% - new, inexperienced, or unsatisfactorily performing incumbents.
88-95% - those gaining experience but not yet fully competent in the job.
96-103% - fully competent performers performing the job as defined.
104-111% - those consistently performing the job at a lever higher than what the job definition requires.
112-120% - those universally recognised as outstanding performers, both inside and outside the organisation.

Returning to the positon Engineering Manager with a compa-ratio of 95%, one would acknowledge this as an appropriate salary for the incumbent if the incumbent were performing at a level consistent with this compa-ratio, ie developing but not yet fully competent in the job, not yet performing competently all major aspects of the job as specified by its job description.

If an incumbent's performance appraisal suggests a higher compa-ratio should be applicable, a series of above average salary increases can be used to gradually raise the individual's compa-ratio.

If an incumbent's performance slips then a lower compa-ratio should be aimed for commensurate with the incumbent's lower performance level. A series of zero or small salary movements can be used to gradually lower an individul's compa-ratio.

Remember also that the highest level of achievement of many individuals is fully competent and that they will plateu in the fully competent compa-ratio range. Compa-ratios do not have to be a continual one-way steet upwards.

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