WORKED EXAMPLE

(12,000 − 10,000) ÷ (15,000 − 10,000) × 100 = 40%.

What this tells you: The employee is 40% of the way from the range minimum to the maximum.

Use with care: The source names this PRR; many compensation teams call this range penetration. Do not confuse it with the current salary divided by the range maximum.

WORKED EXAMPLE

12,000 ÷ 13,000 × 100 = 92.31% (the original source’s separate example).

What this tells you: A ratio below 100% means the salary is below the selected midpoint; 100% is equal to it.

Use with care: Compa-ratio is not a pay-equity verdict. It does not establish underpayment without considering job fit, progression, experience and peers.

WORKED EXAMPLE

(15,000 − 10,000) ÷ 10,000 × 100 = 50%.

What this tells you: Shows how wide the salary band is, relative to the minimum.

Use with care: A 50% spread is not a 50% increase from the midpoint, nor a guaranteed salary-growth opportunity.

WORKED EXAMPLE

10,000 + [(0.50 × 10,000) ÷ 2] = 12,500.

What this tells you: For this symmetric example, the arithmetic midpoint is halfway between minimum and maximum.

Use with care: If the band is 10,000–15,000, its arithmetic midpoint is 12,500 , not 13,000. The PDF presents the 13,000 compa-ratio example separately; never mix those reference values into one grade.

WORKED EXAMPLE

(10,000 − 9,000) ÷ 10,000 × 100 = 10%.

What this tells you: The example’s female average is 10% lower than the male average, using male average pay as the denominator.

Use with care: This is a simple mean-based gap from the supplied PDF. Official pay-gap indicators vary in method: the OECD uses median earnings, and Eurostat uses mean gross hourly earnings. State your population and method clearly.

WORKED EXAMPLE

9,000 ÷ 10,000 × 100 = 90%.

What this tells you: The average female pay is 90% of the average male pay in this example.

Use with care: Despite the name in the source, this group ratio is not a controlled pay-equity assessment. Review comparable jobs, grades, work hours, experience and justified pay factors before interpreting causes.

WORKED EXAMPLE

1,000 ÷ 10,000 × 100 = 10%.

What this tells you: Indicates the relative size of a bonus compared with the chosen base-pay period.

Use with care: Match the time periods: a full-year bonus divided by one month of pay can dramatically mislead; annualize the base pay first when required.

WORKED EXAMPLE

(11,000 − 10,000) ÷ 10,000 × 100 = 10%.

What this tells you: Shows the percentage change in base pay between two points in time.

Use with care: Separate performance-related merit awards from promotion, general adjustments, correction of inequities and one-time payments.

WORKED EXAMPLE

12,000 ÷ 13,000 × 100 = 92.31%.

What this tells you: The salary equals 92.31% of the chosen external benchmark.

Use with care: Although the result matches the compa-ratio example numerically, its denominator is different: market benchmark versus internal salary midpoint. Match job scope, geography, effective date and cash-pay basis.

WORKED EXAMPLE

10,000 + 2,000 + 1,000 + 1,500 + 3,000 = 17,500.

What this tells you: Illustrates the total cash and incentive package included by the source’s definition.

Use with care: Use a consistent measurement period and clearly state whether LTI is granted, vested, earned or paid. Do not treat non-cash benefits as cash compensation unless your definition expressly includes them.

WORKED EXAMPLE

3,000 ÷ 10,000 × 100 = 30%.

What this tells you: The benefits value equals 30% of the employee’s base salary in this example.

Use with care: Identify whether benefits are valued at employer cost or employee-perceived value; avoid double counting items in compensation.

WORKED EXAMPLE

12,000 + 3,000 + 1,000 + 500 = 16,500.

What this tells you: Provides the broader employer outlay under the source’s cost categories.

Use with care: Define all categories first and avoid overlap: for example, a paid allowance already included in compensation must not be counted again as a perk.

WORKED EXAMPLE

12,000 + 1,500 + 2,000 = 15,500.

What this tells you: Estimates direct employer employment cost as defined in the source.

Use with care: CTC definitions differ by country and employer. Bonuses, insurance, end-of-service liabilities, training, taxes or overhead may be treated differently; disclose inclusions and exclusions.

The Perinvo Takeaway

Measure the right thing. Make the right decision.

“A strong reward strategy is not built on more formulas , it is built on better decisions from the right formulas.”

The objective is not to replace management judgment. It is to give leaders a reliable basis to balance fairness, market relevance, employee growth and long-term cost sustainability.