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Exam SPHR topic 1 question 64 discussion

Actual exam question from HRCI's SPHR
Question #: 64
Topic #: 1
[All SPHR Questions]

What is the compa-ratio for an employee that earns $75,000 per year, but the midpoint for the role is $85,000 per year?

  • A. 88 percent
  • B. 113 percent
  • C. $10,000 difference
  • D. 1:88
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Suggested Answer: A
Answer option A is correct.
The compa-ratio helps organizations determine how closely an employee's pay is in synch with market. You must also consider the length of employment, service, skills, and other factors in the decision for compensation. The ratio is found by dividing the employees' salary ($75,000) by the midpoint for the role ($80,000) for the ratio of 88 percent.
Answer option B is incorrect. 113 percent is the inverted formula by dividing $80,000 by $75,000.
Answer option C is incorrect. $10,000 is the difference of the two values, but this isn't the compa-ratio.
Answer option D is incorrect. This isn't a valid figure for the question.
Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US HR Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Compensation


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3 months, 2 weeks ago
The midpoint is actually $85,000 - but the answer is correct.
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