Compa-Ratio
Also known as Compensation Ratio, Salary Comparison Ratio
Compa-ratio compares an employee's actual pay against the midpoint of their salary band, expressed as a decimal or percentage. A ratio of 1.0 means the person is paid exactly at midpoint; below 1.0 means below midpoint, above means beyond it.
Formula
Compa-Ratio = Employee's actual salary ÷ Midpoint of their salary rangeGroup compa-ratio uses average salary of the group ÷ midpoint, and is the version used to check pay equity across teams or demographic groups.
Worked example
- Scenario
- An employee earning £62,000 in a band with a £68,000 midpoint.
- Calculation
- £62,000 ÷ £68,000
- Result
- Compa-ratio of 0.91 — paid 9% below midpoint
What good looks like
A compa-ratio of 0.80–1.20 is the usual band width, with most employees expected between 0.90 and 1.10. New joiners and recent promotions typically sit lower; long-tenured strong performers sit higher. Sustained sub-0.85 for an experienced employee is a common retention risk.
Why compa-ratio matters
Compa-ratio turns pay into something comparable across roles and levels. It surfaces two problems that raw salary data cannot: individuals drifting below market as their band moves, and systematic gaps between demographic groups doing equivalent work. It is also one of the more reliable inputs into an attrition risk model.
How to improve it
- 1Review group compa-ratio by gender, ethnicity and location as a standing part of the pay cycle, not as a one-off audit.
- 2Flag anyone below 0.85 with more than two years in role for review before they reach the market themselves.
- 3Check compa-ratio against performance rating — a strong performer below midpoint is an obvious and cheap retention fix.
- 4Refresh band midpoints against market data annually; a stale band makes every compa-ratio meaningless.
Common mistakes
- Comparing compa-ratios across bands that were benchmarked in different years.
- Treating a low ratio as automatically unfair — a recent hire or promotion is expected to start below midpoint.
- Using it as the only pay-equity measure, without checking whether people are correctly levelled in the first place.
Frequently asked questions
What is a good compa-ratio?
Around 1.0 for an established employee performing well in role. New hires and recent promotions typically start between 0.85 and 0.95 and move up with experience. What matters more than any individual figure is whether group averages differ systematically between demographic groups.
What is the difference between compa-ratio and range penetration?
Compa-ratio measures position against the midpoint. Range penetration measures position between the minimum and maximum, expressed as a percentage of the full band width. Range penetration is more informative when bands are wide or asymmetric.
Related metrics
The gender pay gap is the difference between average pay for men and women across an organisation, expressed as a percentage of men's pay. It is a measure of workforce composition and progression, and is distinct from equal pay, which concerns whether people are paid differently for the same work.
Flight Risk ScoreA flight risk score is a modelled probability that a given employee will voluntarily leave within a defined horizon, usually the next six or twelve months. Unlike turnover rate, which reports what already happened, it is a forward-looking estimate built from tenure, engagement, compensation position, manager history and internal movement data.
Regretted Attrition RateRegretted attrition rate is the share of departures the organisation would have preferred to prevent — typically strong performers, people in critical roles, and those with scarce skills. It is the retention metric that correlates most directly with business impact, because it strips out the exits that were neutral or beneficial.
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