Salary Structure Exercise

Salary Structure Exercise (A) -- HRM6632

Show all calculations!

Given salary grades SG3 and SG4 shown below, which are part of a 7-grade salary structure for exempt,

salaried (non-executives) employees:

A. Calculate:

1. the range spreads for SG3 & SG4

2. the degree of overlap between SG3 & SG4

3. the midpoint-to-midpoint progression or increase (in percent) between SG3 and SG4

$96,000

$80,000

SG5

$48,000

SG4

$40,000

SG3

SG2

4. Given the data in Part A above, what is your assessment of the design of this pay structure?

5. Could the organization do anything to improve its pay structure? If so, what?

B. Assume that there are six employees in SG3 with the following salaries:

$40,000; $42,000; $48,000; $50,000; $70,000; $74,000.

6. What is the average salary for employees in SG3?

7. What is the median salary for employees in SG3?

8. Why is the average salary so different from the median salary? What are the implications of this difference?

9. What is the group compa-ratio for employees in SG3?

10. What do you conclude from the compa-ratio you calculated for SG3? (Do not just define what the compa-ratio is.)

All questions are worth 10 points each.