Asked by Isabelle Manaytay on Jun 04, 2024
Verified
Fresher Inc. is a whole-foods distributor. Its human resource department gathers the following data for computing compa-ratios of some positions. Based on the data, for which position is Fresher Inc. most likely underpaying for human resources?
A) shipping clerks: average salary of $22,000, range midpoint of $24,000
B) inventory clerks: average salary of $20,000, range midpoint of $30,000
C) order packers: average salary of $24,000, range midpoint of $22,000
D) purchasing agents: average salary of $30,000, range midpoint of $25,000
E) warehouse workers: average salary of $20,000, range midpoint of $20,000
Compa-ratios
A metric used in human resources to compare an individual’s salary to the midpoint of a salary range for their position or grade within an organization.
Underpaying
The practice of compensating employees with wages that are below their job's market value or not commensurate with their skill level.
Human Resources
The department within an organization that deals with the hiring, administration, and training of personnel.
- Assess and quantify compensation ratios (compa-ratios), acknowledging their role in the governance of compensation frameworks.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
B
Explanation :
The compa-ratio (average salary divided by range midpoint) for inventory clerks is only 0.67, meaning their average salary is significantly lower than the midpoint of the salary range for this position. This suggests that Fresher Inc. is likely underpaying its inventory clerks compared to industry standards.
Learning Objectives
- Assess and quantify compensation ratios (compa-ratios), acknowledging their role in the governance of compensation frameworks.