Glossary

What is a compa-ratio?

Also known as: Comparatio, Compensation ratio.

A compa-ratio is a salary expressed against the midpoint of its pay band: the salary divided by the band midpoint, usually read as a percentage, so 100 percent means the person is paid exactly at the middle of the range for their role.

The compa-ratio turns a raw salary into a position within a structure. Below 100 percent sits in the lower half of the band, above 100 percent in the upper half, and a cluster of ratios across a team shows whether pay is tracking the structure or drifting from it.

It is arithmetic, not a judgement: the right ratio depends on experience, performance and how the band was set. It is most useful when a team has real bands to measure against, which is the first structure many growing companies build.

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