What is compa-ratio in SAP PA-CM - Compensation Management?

SAP Term: compa-ratio

• Component: PA-CM

• Component Name: Compensation Management

• Description: The relationship between the salary received by an employee and the mid-point of the range covered by the employee's salary group. &EXAMPLE& An employee belongs to salary group MXXX. The employee's annual salary is $59,000. The range covered by salary group MXXX is from $50,000 to $70,000, the mid-point of which is $60,000. This means that the employee has the following compa-ratio: 59,000/60,000 = 0.98.

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• Key Concepts: 
  Compa-ratio is a term used in SAP's Compensation Management (PA-CM) component. It is a numerical value that represents the ratio of an employee's salary to the market rate for their job. It is used to compare an employee's salary to the market rate and determine if they are being paid fairly.
  
  How to use it: 
  Compa-ratio is calculated by dividing an employee's salary by the market rate for their job. The resulting number is then compared to the company's target compa-ratio. If the number is higher than the target, then the employee is being paid more than the market rate; if it is lower, then they are being paid less than the market rate.
  
  Tips & Tricks: 
  When calculating compa-ratio, it is important to use accurate and up-to-date market data. This will ensure that the results are accurate and that employees are being paid fairly.
  
  Related Information: 
  Compa-ratio is just one of many metrics used in SAP's Compensation Management component. Other metrics include merit increase percentage, bonus percentage, and total compensation package value.