diagnosis · evidence-based answer
How do I know if our pay is competitive?
The short answer
Competitiveness is a distribution question, not a single average. Compute a compa-ratio — actual pay against the market benchmark midpoint — by level and function, because a healthy company-wide average routinely hides a lagging level or location that is driving your regrettable attrition. Watch for mix and geography confounds when you compare, and let the spread, not the mean, tell you where to spend the next compensation dollar.
The problem underneath
Competitiveness gets reduced to a single average that hides where pay actually lags — by level, function, or location — and misdirects the budget.
Go deeper
Related questions
- How do I run a compensation benchmarking analysis?
- Are we paying at market rate?
Stop re-deriving this by hand. Is your pay competitive? Model it — Compa-ratio against a defensible benchmark, by level — not one company-wide average.