Problem: Use your knowledge of compensation scorecards to answer the following question. Function Average Performance Rating (1-5) Average Merit Increase (5% of budget) (%) Grade Inflation (%) Compa Ratio (%) Annual Incentive (% of Target) Finance 3.5 6.8 11 120 85 Operations 4.1 5.0 6 95 103 Marketing 4.9 2.7 1.9 70 110 You are the director of compensation at a major pharmaceutical company. As part of the strategy of your unit, you developed a compensation scorecard. The results are shown in the summary table. Based on this information, what can you conclude about the operations function? The average merit increase for operations employees is within the amount budgeted. The operations department is overstaffed. The compa ratio suggests that operations employee salaries are excessively high. The operations function is grossly underpaying its employees.