What is a Compa Ratio and how is it calculated?
The compa ratio calculates an employee's pay rate compared to the midpoint of their salary range as a percentage. This is calculated as Pay Rate ÷ Salary Range Midpoint. The salary range midpoint represents 100%.
How does the Salary Range spread differ by classification?
Non-Exempt and Exempt spread is 80% (minimum) – 120% (maximum), while Executive spread is 75% (minimum) - 125% (maximum).
Why are the salary range spreads different for Executives?
There are several reasons:
- Executives are typically in the highest-level position they are going to be in at that organization. Therefore, these individuals need more room to grow in salary in the position as promotional opportunities are limited.
- The positions are far more complex than most other positions in the organization and therefore require a longer learning curve. The time taken to get the employee to midpoint is typically longer than for other positions in the organization.
When is the salary data in Compease aged to?
For most clients, the data is aged to July 1 of that data year. By doing so, the data leads the market for the first half of the year and lag the market for the second half of the year. The end result is being market competitive. Higher education systems have an aging date of January 1 because the academic fiscal year is different.
Can you tell me if a job should be exempt or non-exempt?
We cannot advise on FLSA determinations. However, Compease provides an FLSA test tool that can assist in providing a determination. If there are any questions as to whether the position should be exempt, we recommend consulting an employment law attorney.
What is the weighting of each compensable factor?
The weighting of the factors is proprietary information to HR Performance Solutions. The weight of the factors varies and is derived based on how the market drives pay. For example, a position’s authority over finances (Organizational Authority) affects pay more significantly than the education required to perform the role. Thus, Organizational Authority will have more weight than Education.
What is a Benchmark Job?
Benchmark jobs are positions that are common in the industry for your organization’s size. These jobs are actually used as the framework for your Compease system and the market data is reviewed annually. In order for a position to be included as a benchmark, the following must apply:
- The position must be commonly understood in the industry and across survey sources.
- The position must have a reliable number of responses within many salary surveys.
- The data must be consistent across survey sources and over time.
Positions which do not meet these criteria do not qualify for benchmark status because the market data is inconsistent year-over-year and would not be a reliable anchor for the salary structure.
What is a Proforma Job?
Proforma jobs are positions which may exist in the industry but do not meet the criteria listed above to be a benchmark position. The large library of proforma jobs is meant to assist you in getting the grading started for a job. While these positions are not market priced each year, you can use the proformas as a starting place for grading a position, rather than starting from scratch. We do, however, always recommend reviewing the skills and responsibilities required of the role to ensure the position has been evaluated appropriately.
When should employees get to midpoint?
- The answer to his question varies based on level of positions. We have a great guide to walk through this in the Salary Administration Guide in Compease. This can be found under Reports > System Templates > Salary Administration Guide (page 19).
- It is important to understand that not all employees will reach their respective midpoints at the same pace. In general, positions on the lower end of the organization (lower pay grades) will likely reach their midpoints faster than positions higher in the organization because the roles become increasingly more complex, and thus take longer to reach proficiency (midpoint). Beyond the complexity of a role, there are other considerations such as prior experience, starting pay rate, performance, organizational growth trajectory, and other items.
How do you get the geographic differentials? Is local data included?
- Our geographic differentials measure cost of employment or cost of wages for a particular city. Ultimately, the geographic differential tries to assess how much it costs to attract and retain talent in a specific city. While cost of living is part of that equation, the geographic differential considers other economic factors and will not move at the exact same pace as a cost of living index.
- All the salary data from surveys is collected nationally as this is the most statistically valid method and the largest amount of data can be obtained this way. We then use the geographic differentials to calculate the cost of wages for a specific city. This drills the data down to the local level.
When should I update my Compease ranges to the next year?
This is up to your organization. The ranges are meant to be applied for the data year listed, so most clients implement the ranges on January 1. However, you can use them in advance for budgeting and planning. We recommend accepting the ranges when the update is available and then switching between data years as needed.
When is the data updated, and why is it only updated once a year?
The Compease ranges are updated annually for several reasons. Most salary surveys are only conducted on an annual basis and those that update the data more frequently don’t see significant enough changes in the data to affect the range. Since Compease provides a wide pay range, organizations can choose to apply mid-year increases or adjust starting wages, even though the range has not changed because it is wide enough to accommodate this. The data for surveys that do a mid-year update changes only a small amount, which would not affect the pay range significantly. It is more appropriate to make the increase to the ranges annually in one larger move rather than multiple, smaller moves. This allows organizations to have a pay range that is stable and does not move every few months in order to have consistent pay practices and equity in starting wages.
How does Compease work with COLA and CPI?
CPI and other economic factors are considered in the range movement. The salary range updates do include an update to the geographic differentials which measure cost of labor, but not cost of living. As Compease does not directly take COLA into account; you may choose to address that separately from the Compease range updates.
When do I need to move into the next asset/revenue size?
We recommend moving to the next asset/revenue cut when the growth is sustainable and you will not drop below the bottom of the asset/revenue size. Some choose to wait and adjust the asset/revenue size in conjunction with the next year’s salary ranges. However, this is an individual organization decision.
Does Compease have anything on incentives or benefits?
Compease is a base pay system so incentives and benefits are not included. If you are considering a total compensation picture, you will need to account for those items in addition to the base pay provided by Compease.
Should I have a different job title for part-time positions? Should they be paid differently?
We generally discourage different job titles for part-time positions because the duties of the position are typically the same whether the position is full-time or part-time. Some organizations do offer premium pay for a part-time employee if they are ineligible for the same benefits a full-time employee would receive. However, both full-time and part-time positions are still in the same pay grade.