Western Governors University (WGU) MHRM6020 D435 HR Technology & People Analytics Practice Exam

A market ratio above 1 indicates that compensation exceeds the market rate. This ratio is a comparative measure that reflects how an organization's salary levels stack up against the market average for similar positions. When the market ratio is greater than 1, it signifies that the organization is paying more than what is typically offered in the external market for comparable roles.

This scenario can often suggest that the organization is trying to attract or retain talent by offering higher compensation packages, which can be a strategic decision in competitive job markets. It may also reflect organizational policies or performance metrics that allow for greater compensation to maintain a high-quality workforce. Understanding this metric is crucial for HR professionals as it informs compensation strategy and helps ensure the organization remains competitive in attracting and retaining top talent.