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Comp Ratio Formula:
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Comp Ratio (Compensation Ratio) is a metric used in compensation analysis that compares an employee's current salary to the midpoint of their salary range. It helps organizations assess how an individual's pay compares to the market rate for their position.
The calculator uses the Comp Ratio formula:
Where:
Explanation: A comp ratio of 100% means the employee is paid exactly at the midpoint of their salary range. Values below 100% indicate the employee is paid below the midpoint, while values above 100% indicate payment above the midpoint.
Details: Comp ratio is crucial for salary benchmarking, pay equity analysis, and compensation planning. It helps organizations ensure fair and competitive compensation practices aligned with market rates.
Tips: Enter current salary and midpoint values in Philippine Pesos (PHP). Both values must be positive numbers greater than zero.
Q1: What is a good comp ratio?
A: Typically, a comp ratio between 80-120% is considered acceptable, with 100% being the market midpoint. The ideal range may vary by organization and position.
Q2: How is midpoint determined?
A: Midpoint is typically established through market salary surveys and represents the median salary for a specific position in a given geographic location.
Q3: Why use comp ratio in salary analysis?
A: Comp ratio provides a standardized way to compare salaries across different positions and levels, helping identify pay disparities and inform compensation decisions.
Q4: How often should comp ratio be reviewed?
A: Comp ratios should be reviewed annually during compensation planning cycles or when significant market changes occur.
Q5: Can comp ratio be used for all employees?
A: Yes, comp ratio can be calculated for any employee with a defined salary range, though it's most meaningful for positions with established market benchmarks.