Compa-ratio

Compa-ratio (comparative ratio) measures where an employee's base salary sits relative to the midpoint of their pay band — calculated by dividing the employee's salary by the band midpoint and expressing the result as a percentage. A compa-ratio of 100 means the employee is paid exactly at the midpoint; below 100 means below midpoint (common for newer employees still developing); above 100 means above midpoint (common for long-tenured high performers). HR uses compa-ratio distributions to identify compression (too many employees clustered at the top of bands, leaving no room for merit increases), inversion (newer employees paid at or above long-tenured ones due to market rate increases), and equity concerns (demographic groups with systematically different compa-ratio distributions for equivalent roles).