Compa-ratio and Band Penetration are the two most common metrics for analyzing employee compensation (against a compensation band).

Today, only Compa-ratio is included in the Assemble platform, however we define both and describe their differences below.

Compa-ratio is a measure that expresses your current salary as a percentage of your salary band's midpoint. This metric helps provide your relative position within your salary band, where 100% represents your salary being at the midpoint of your salary band.

Calculated as:

Your Salary / [(Min of Salary Band + Max of Salary Band) / 2]

Band Penetration is a measure that expresses your current salary as a percentage of your salary band. Specifically, it measures how close your salary is to the maximum or minimum of the salary band. For example, if your salary is at the minimum, midpoint, or maximum of the band, your band penetration would be 0%, 50%, and 100%, respectively.

Calculated as:

(Your Salary - Min of Salary Band) / (Max of Salary Band - Min of Salary Band)

Compa-ratio can help determine how an employee's salary compares to the market rate, and where they fall within the band for their job.

Band penetration can help to determine how much room there is for future salary increases within the band for a particular job, and is useful for identifying whether an employee's salary is at the low, mid or high end of the band.

Both compa-ratio and band penetration are useful metrics. They can be used together to develop a more complete picture of an employee’s or organization’s salary structure and individual pay levels.

For example, if an employee has a compa-ratio of 90% and band penetration of 80%, this means the employee’s salary is below market rates (“lags the market”), but is near the top of the organization’s salary band. This means the organization has room to increase the employee’s salary to bring them closer to market without exceeding the salary band.