# The Finer Points of Position in Range

Aug. 23, 2019, 2:35 a.m.

Life is full of difficult decisions: Pizza or Tacos? Apple or Android? Ford or Chevy? Chocolate or Vanilla? Fahrenheit or Celsius? Compa-Ratio or Position in Range?

While the merit of tacos can be discussed at length, most compensation professionals are focused on the finer points of position in range and compa-ratio. Position in range and compa-ratio both seek to guide how an employee is compensated relative to a data point, or data points. Position in range, (also referred to as range penetration), provides a number 1 - 100 that is correlated to what the employee's salary is, relative to the minimum and maximum of their respective salary range, with 1 being the minimum, 50 being the midpoint and 100 being the maximum of the range. Position in Range can be calculated using the following formula:

**Position in Rage: (Salary – Minimum) / (Maximum – Minimum)**

Compa-ratio, on the other hand, provides a number that is the ratio of an employee's salary as compared to their midpoint, and can be calculated using the following formula, which is much simpler to calculate than position in range. The ease of calculating the compa-ratio is a significant reason that compa-ratio has such prevalence in the Compensation and HR world:

**Compa-Ratio: Salary / Midpoint**

However, although compa-ratio is easier to calculate than position in range, using position in range can quickly provide more information at a glance, such as how far an employee is from the midpoint as well as how far they have penetrated the salary range. Additionally, position in range makes it extraordinarily easy to identify which tertile, quartile, quintile, sextile, etc... an employee is in and finally - most importantly, position in range doesn't get flagged by spell check like compa-ratio does!

It is important to note, however, that while the argument can be made that position in range provides more information with a single value, company preference and culture may determine which is more aligned to the Company values and compensation philosophy.