Improving Pay Structure at ABC Corp. with Compa-Ratio
What should ABC Corp. consider for setting starting wages for new hires?
If Gia recommends ABC Corp. to start using a compa-ratio, what is she suggesting?
Final Answer:
Gia is recommending implementation of a Compa-Ratio for determining starting wages for new hires at ABC Corp. This reflects the comparison between an individual's pay and the midpoint of their job's market rate. Compa-Ratio helps assure fairness and transparency in pay structure.
When Gia recommends ABC Corp. to implement a Compa-Ratio in their pay structure, she is suggesting the use of a specific system to determine starting wages for new hires. The Compa-Ratio establishes a direct comparison between an individual's actual pay and the median or mid-point of the market rate for that position.
A Compa-Ratio of 1.0 indicates that a person is being paid exactly at market rate, less than 1.0 means they're paid below market rate, and greater than 1.0 indicates above the market rate. This ratio can help provide fairness and transparency in the company's compensation system, and can help ensure that employees feel valued and adequately compensated.