What is the Comp-Ratio market analysis?
A commonly used measurement to determine how salaries are different from the market, is the comparative “market compa-ratio”. The calculation is quite simple.
–First you have to set the target salary position. This is the market range position you want you competent staff’s compensation to be measured against (e.g. at market median or market 75th percentile).
–If, for example, your target is to be at the median of a salary range, the market compa-ratio will be calculated using the median of the market group as follows :
Average of all salaries in a specifc job
Median (Market target)
A market ratio of 1 suggests that the average actual pay is in line with the market target.If the ratio is above 1, the average actual pay is higher than the market target. If the ratio is less than 1, the average actual pay is lower than market.
As of 2009 Survey Cycle, CompTrack includes an interactive built-in market compa-ratio tool (following the fore mentioned methodology) that combines your compensation data submission with the market results, merging both in a clear and easy to understand tabular output.
