It is a compensation metric organizations use to determine how an employee's salary compares to the midpoint of the salary range for their position. It is calculated by dividing the employee's current salary by the midpoint of the salary range for their position. The resulting ratio is expressed as a percentage, with a ratio of 100% indicating that the employee's salary is exactly at the midpoint of the range. Ratios above 100% indicate that an employee is paid above the midpoint, while ratios below 100% indicate that an employee is paid below the midpoint. Compa ratio is often used with other compensation metrics to ensure that employees are paid fairly and competitively within their organization. A broader definition of compa ratio is an assessment of the competitiveness of an individual salary point in reference to a comparative point of interest, such as the midpoint of a grade salary range, the market median, the 75th percentile and many other reference points of interest.

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Compa ratios - Everything you need to know

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