← HR Metrics·Compensation & Benefits
Aggregate Compa-Ratio
Average rate actually paid over a population divided by the range midpoint — a manager-drift detector. <1 = paying below intent; >1 often from longer tenure / few new hires / low promotion. Computable per range, unit, function, or org (distinct from the employee-grain compa-ratio).
How it’s computed
mean(rates_paid) / range_midpoint
What the evidence shows
Evidence (effect sizes, priors, validity) is syncing from Principia.
Run it on your data
This metric is computed in the People Analytics Toolbox on your own numbers. See pricing — posted, no quotes.
sources: toolbox:metrics-catalog
What the literature says
The measurement literature behind this signal — sourced, so you can defend it.
“What is a Compa-ratio and How Do You Calculate it?In chapter 5, I talked about the market ratio, as in how well your internal pay compares to the market rate. Now I want to explain something called the compa -ratio , which is the relationship of your actual pay to the midpoint…”
— Pay Mattersmatch 66%
“In some cases, paying above 1.2 market-ratio is ok if your employee has many years of relevant experience, and unique skillsets. If you have difficulty keeping and hiring employees in location A, but you can’t get rid of employees in location B. You can calculate the average…”
— People Analytics Text Mining with Rmatch 65%
“If the average market-ratio for employees in location A is 0.6 (below market), while the average market-ratio for employees in location B is 1.4 (percent above market) -> it shows that you’re paying too high in location B and too low in location A - These market-ratios explain…”
— Predictive HR Analyticsmatch 64%
Resources: Pay Matters · People Analytics Text Mining with R · Predictive HR Analytics