Within the HRPA Human Resources Competency Framework (Functional Domain: Total Rewards), HR professionals must be proficient in interpreting and applying compensation metrics such as the compa-ratio to assess pay competitiveness and internal equity.
Compa-Ratio Formula:
A compa-ratio of 100% means an employee’s pay equals the midpoint of their pay range.
A ratio above 100% indicates pay is above the midpoint, while below 100% means pay is below the midpoint.
Extract:
“Compa-ratio measures the relationship between an employee’s pay and the pay range midpoint to assess pay positioning within the structure.”
(HRPA Competency Framework – Total Rewards, CHRP Level, Key Competency: Analyze and Administer Compensation Systems)
Interpretation of 107%:
Employees are paid 7% above the midpoint of the pay range — reflecting a position slightly above market or internal midpoint values.
This often indicates higher experience, strong performance, or pay nearing the range maximum.
Explanation of Options:
A: Incorrect; 93% would mean salaries are below midpoint.
B: Incorrect; 107% means 7% higher, not 107% higher.
C: Incorrect; misstates the difference.
D: Correct; 107% means salaries are 7% higher than the midpoint.
Therefore, D. Salaries are 7% higher than the midpoint of the pay grade is the correct interpretation.
Verified Reference Summary:
HRPA Human Resources Competency Framework – Functional Domain: Total Rewards
CHRP Knowledge Exam Blueprint – Compensation Metrics and Analysis
HRPA Exam Preparation Guide – Base Pay and Market Competitiveness
