Problem
You have learned how to evaluate pay compression systems by the following metrics: Total Compensation Expense Factor, Pay-for-Performance Expense Factor, Total Compensation Revenue Factor, and Pay-for-Performance Revenue. In the "Practice" sheet of the Excel workbook, you will find a new set of compensation, operating, and revenue data for a different company. Again, you will focus on compensation expenses associated with nonproduction employees.
a) First, compute the total compensation expense factors and total compensation revenue factors across 3 years.
b) Second, compute the pay-for-performance expense factors and pay-for-performance revenue factors across the same 3 years.
c) What trends did you notice? What implications do they have?