Examples of Salary Growth Rate Calculations
These examples show you how compensation history calculates the salary growth rates.
| Type | Description | Calculation |
|---|---|---|
| Average annual growth rate | The statistical average of the total percentage increase from January to December of each full year | SUM(Annual Growth Rate per Year in Period) / Number of Years in Period |
| Cumulative Growth Rate | The total percentage of salary change over the period | (Ending Salary for Period - Starting Salary for Period) / Starting Salary for Period |
Salary Change Information
These example starting and ending salaries span 5 years and show the corresponding annual growth rates. The 3-year calculations use the information for 2017 through 2019.
| Year | Starting Salary | Ending Salary | Annual Growth Rate |
|---|---|---|---|
| 2015 | 38,000 | 41,000 | 7.89 |
| 2016 | 41,000 | 43,000 | 4.88 |
| 2017 | 43,000 | 49,000 | 13.95 |
| 2018 | 49,000 | 54,000 | 10.20 |
| 2019 | 54,000 | 54,000 | 0.00 |
Example Calculations
Here's how the calculations look using the sample information.
| Type | Period | Example Calculation | Example Growth Rate |
|---|---|---|---|
| Average annual growth rate | 3-year | (13.95 + 10.20 + 0.00) / 3 | 8.05 |
| 5-year | (7.89 + 4.88 + 13.95 + 10.20 + 0.00) / 5 | 7.38 | |
| Cumulative Growth Rate | 3-year | ((54,000 - 43,000)/43,000) * 100 | 25.58 |
| 5-year | ((54,000 - 38,000) / 38,000) * 100 | 42.10 |