Salaries across departments

(CAT 2008)

There are 100 employees in an organization across five departments. The following table gives the department- wise distribution of average age, average basic pay and allowances. The gross pay of an employee is the sum of his/her basic pay and allowances.

There are limited numbers of employees considered for transfer/promotion across departments.  Whenever a person is transferred/promoted from a department of lower average age to a department of higher average age, he/she will get an additional allowance of 10% of basic pay over and above his/her current allowance. There will not be any change in pay structure if a person is transferred/promoted from a department with higher average age to a department with lower average age.

Questions below are independent of each other.

1. What is the approximate percentage change in the average gross of the HR department due to transfer of a 40-year old person with basic pay of Rs. 8000 from the Marketing department?

a. 9%

b. 11%

c. 13%

d. 15%

e. 17%

2. There was a mutual transfer of an employee between Marketing and Finance departments and transfer of one employee from Marketing to HR. As a result, the average age of Finance department increased by one year and that of Marketing department remained the same. What is the new average age of HR department?

a. 30

b. 35

c. 40

d. 45

e. cannot be determined

3. If two employees (each with a basic pay of Rs. 6000) are transferred from Maintenance department to HR department and one person (with a basic pay of Rs. 8000) was transferred from Marketing department to HR department, what will be the percentage change in average basic pay of HR department?

a. 10.5%

b. 12.5%

c. 15%

d. 30%

e. 40%

For answers click here.