Market Pricing Broad Band Compensation System
What is a Market Reference Point (MRP)?
A "Market Reference Point" (MRP) is assigned to each position. It is derived from the average actual paid salary in the external labor market according to salary survey data or, if benchmark data is not available, on comparisons with benchmarked positions. The MRP represents the salary level of an employee who has attained complete mastery of the position requirements to the extent that he/she can fully execute all of the essential job functions of the position. The MRP presumes that the employee has acquired all of the requisite job knowledge, skills and abilities and, importantly, has demonstrated these over some specified period of time. Each MRP has a salary range associated with it comprised of a "hard" minimum, meaning that no employee will be paid below it, and a maximum. An employee's salary within the MRP range is dependent on his/her qualifications, including years of related experience, performance and internal salary equity considerations. As with salary grades, there is overlap among MRP ranges.
How is the salary range calculated with an MRP?
Each position has a salary range based on its MRP. The salary range for each position can be calculated by multiplying the MRP by 80% to arrive at the range minimum and by 120% to arrive at the range maximum.
Position X has an MRP of $40,000.
Minimum of salary range = $40,000 * .80 = $32,000
Maximum of salary range = $40,000 * 1.20 = $48,000
The salary range is then $32,000 to $48,000.
How is the hiring range calculated with an MRP?
The hiring range, indicated on job postings, is the range minimum to the MRP. In the example above, the hiring range would be $32,000 - $40,000.