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Calculate The Compa-Ratio of The Various Pay Levels

The document discusses compa-ratio, which is a formula used by compensation professionals to assess how competitive an employee's pay is. It is calculated by dividing an employee's current salary by the market rate defined in the company's pay policy. The document provides compa-ratio calculations for various pay grades at Tata Motors, finding ratios ranging from 0.612587 to 1.448628, with higher grades generally having ratios closer to or above 1.

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Abhijit Panda
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243 views

Calculate The Compa-Ratio of The Various Pay Levels

The document discusses compa-ratio, which is a formula used by compensation professionals to assess how competitive an employee's pay is. It is calculated by dividing an employee's current salary by the market rate defined in the company's pay policy. The document provides compa-ratio calculations for various pay grades at Tata Motors, finding ratios ranging from 0.612587 to 1.448628, with higher grades generally having ratios closer to or above 1.

Uploaded by

Abhijit Panda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Calculate the compa-ratio of the various

pay levels. What does it signify?


Step-1: What is compa-ratio?
Compa-Ratio: The formula used by compensation professionals to assess the
competitiveness of an employees pay level involves calculating a compa-ratio.
It is the short form for Comparative ratio.
Step-2: How to calculate compa-ratio?
Compa-ratio is calculated as the employees current salary divided by the current
market rate as defined by the companys competitive pay policy.
Step 3 : To calculate compa-rate, we have taken the market rate for all pay scales
from Exhibit 5 of the Tata Motors case from the WDA booklet.

As per the calculations, we found that for


Grade A : Avg. Compa-Ratio is 0.612587
Grade B : Avg. Compa-Ratio is 0.732030
Grade C : Avg. Compa-Ratio is 0.900913
Grade D : Avg. Compa-Ratio is 0.746641
Grade E : Avg. Compa-Ratio is 0.776099
Grade F : Avg. Compa-Ratio is 0.757601
Grade G : Avg. Compa-Ratio is 0.849686
Grade H : Avg. Compa-Ratio is 1.088995
Grade I : Avg. Compa-Ratio is 1.099394
Grade J : Avg. Compa-Ratio is 1.448628
Grade K : Avg. Compa-Ratio is 1.2337
Grade M : Avg. Compa-Ratio is 1.199936
Grade N : Avg. Compa-Ratio is 0.849352

Average Compa-ratio vs Grade


1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
A

F
Series 3

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