Understanding salary terms
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When reviewing salary, there’s some terminology and metrics you need to understand.
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Salary ranges are the set of numbers that represent the minimum and maximum pay for a grade. The maximum is an important metric to track because it shows the highest end of the salary range. The minimum reflects the lowest end of the salary range. The salary range midpoint is the middle point between the salary range maximum and minimum. It typically represents the fair and competitive rate for a specific role. Salary range position compare a person’s salary with the salary range, and is expressed as a percentage of 100. If a person’s salary range position is 50, their salary is equal to the salary range midpoint.
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The compensation ratio, or compa-ratio for short, compares people’s salary levels relative to the salary range midpoint and is expressed as a percentage. If a person’s compa-ratio is 100, their salary is equal to the salary range midpoint.
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In salary metrics, a quartile refers to dividing a salary range into four equal parts, while a quintile divides the same range into five equal parts. Essentially, a quartile represents a quarter of the range, while a quintile represents a fifth of the range, allowing for more granular analysis of salary distribution within a group.
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