Compa- ratio is also known as compensation or comparative ratio. It is a measure used to compare current pay rates with midpoints of the salary range. The midpoint of a pay range represents the average pay for that range in other organization’s. An employee’s actual salary to midpoint ratio indicates whether he is paid below and above market rates.
Compa-Ratio Formula
Compa-Ratio = Actual salary rates / Midpoint of the pay range
Individual Compa-Ratio:
The individual compa-ratio is a metric that compares a person’s position within a pay range to the midpoint of that range. If an individual’s salary is excessively high or low, it can be adjusted using this calculation.
Individual Compa-ratio = Actual pay range / Midpoint range
Group compa-ratio:
The group compa-ratio measures the difference between privacy and policy for the whole organization.
Group Compa-ratio = Sum of actual pay / Sum of job reference point rate.
Average Compa-Ratio: The average compa-ratio is computed by summing the individual’s compa-ratio and dividing by the number of individuals.
Average compa-ratio = Sum of Individual Compa Ratio / Total Number of Individuals
