Compa-ratio (also known as comparison or compensation ratios) is a metric that compares an individual’s salary against a salary range. It is often calculated by dividing the actual salary paid to an employee by the salary range for that position. The resulting percentage measures how an individual’s rate of pay compares to the midpoint of the salary range. You can use market / industry salary ranges, geo-region ranges or your own organisation’s ranges. The range of an employee’s compa-ratio should fall between 70-150 percent (or 0.7 – 1.5).
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