Elif Eriksen· Job Architecture Lead, Ravenna Chemicals
Asked in New Member Welcome ·
Can someone explain compa-ratio and range penetration as if I were new? I am.
I am an HR coordinator at a renewable energy company in Gothenburg, about 500 employees, and I have just been moved into a role supporting our compensation lead. I am two weeks in.
In every meeting people say things like 'she is at 0.92' or 'he is only 30 per cent into the range' and everyone nods. I have looked both terms up and I can repeat the formulas, but I do not understand why there are two measures for what looks like the same thing, or which one I should use when.
A worked example with real-looking numbers would help me a lot.
10 helpful · 1 insightful · 2 agree · 4 replies · 147 views · 2 following
Accepted answer· by Vera Bauer
Take a range of 400,000 to 600,000 kronor with a midpoint of 500,000, and someone paid 460,000. Compa-ratio is pay divided by midpoint: 460,000 over 500,000 is 0.92. Range penetration is how far up the range they are: 60,000 above the minimum, out of a range 200,000 wide, so 30 per cent. They answer different questions. Compa-ratio compares pay with the target rate for the job, so it works across grades. Penetration shows how much room is left before the maximum, which is what managers ask about at review time.
Read in the conversation ↓
