Work out compa ratio instantly with clear inputs, formula shown and shareable results.
Compa-ratio is salary divided by band midpoint: 1.00 means paid at the market reference rate. Range penetration expresses the same position as a percentage of the way through the band, which is the more useful measure when bands are asymmetric around the midpoint.
Compa-ratio
Compa-ratio = Salary / Band midpoint
Range penetration
Penetration % = (Salary - Minimum) / (Maximum - Minimum) x 100
Usually 0.85-0.95, leaving room to progress to midpoint as they become fully competent. Hiring at midpoint removes that headroom.
Either a long-tenured team, over-payment relative to market, or bands that have not been updated. All three warrant investigation.