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**The variation in pay among jobholders relative to the practice line becomes an
important measure for determining salary review outcomes.**
This variation can be measured, and the measure for a particular job is called
its **compa-ratio**.

**2.0 Compa-ratios.**

If the organisation's practice line is a straight line, then the formula for the line has the following form:

Salary = job points multiplied by the slope of the practice line, plus a fixed value.

The procedure for calculating the line of best fit to the company data (the practice line) yields two figures: the slope of the line, and the fixed value.

In our example these two figures are:

Slope = $130.58c per point Fixed value = $17,043

Which gives, for our sample company, the practice line formula:

Salary = job points multiplied by $130.58c, plus $17,043

Using this formula we can calculate the practice line salary (deemed to be the competent performance salary) for any job size in our sample company. Take a job of size 500 points for example. Applying our practice line formula we have:

Salary = 500 multiplied by $130.58c, plus $17,043

Which equals $82,333.

From Table 1 we see that Job D, with 500 points, is paid $85,000. This is just above the practice line value of $82,333, as also shown on Chart 2.

The ratio of actual pay for a job relative to the practice line level of pay for the job (i.e. fully competent level of pay for the job), expressed as a percentage, is called the compa-ratio for the job. In this particular example, Job D, it is:

$85,000 divided by $82,333

Which, expressed as a percentage, equals 103%.

Hence the compa-ratio for Job D is 103%.

The compa-ratios for all six jobs in our sample company are as follows:

Table 2

Job | Job Points | Practice Line Salary (Job Points x $130.58c plus $17,043 |
Actual Salary | Compa-ratio(%) Actual Salary divided by Practice Line Salary |

A | 1,200 | 173,739 | 170,000 | 98 |

B | 900 | 134,565 | 150,000 | 111 |

C | 750 | 114,978 | 100,000 | 87 |

D | 500 | 82,333 | 85,000 | 103 |

E | 300 | 56,217 | 60,000 | 107 |

F | 200 | 43,159 | 40,000 | 93 |

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