← HR Metrics·Compensation & Benefits
Compa-Ratio
Ratio of actual pay to midpoint of salary range
How it’s computed
salary / 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 73%
“12.1.1 Salary Ranges, Range Spreads, Compa-Ratios, and “ Compe-Ratios”When considering your employee’ s likelihood of leaving the company, you should think about how their compensation compares to what “ the market” would offer them. By “ the market” offer I mean the best offer…”
— Strategic Compensation Talentmatch 70%
“Ranges should be designed to provide midpoints that reflect the “going rate” and are reasonably close to what the market establishes as the minimum and maximum for the job. Minimums that are too low will result in a company needing to pay an employee higher in the range in order…”
— Worldatwork Handbook Compensationmatch 68%
Resources: Pay Matters · Strategic Compensation Talent · Worldatwork Handbook Compensation