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Salary Range Penetration Formula:
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Salary range penetration is a metric that shows where an employee's salary falls within a predetermined salary range. It's expressed as a percentage that indicates how far the salary has progressed from the minimum to the maximum of the range.
The calculator uses the salary range penetration formula:
Where:
Explanation: The formula calculates what percentage of the salary range the employee's current salary represents, with 0% being at the minimum and 100% being at the maximum.
Details: Understanding salary range penetration helps organizations ensure fair compensation, make informed decisions about salary adjustments, and maintain internal equity. It's particularly important for HR professionals and managers in Australia's competitive job market.
Tips: Enter the employee's current salary in AUD, the minimum of the salary range in AUD, and the maximum of the salary range in AUD. All values must be valid positive numbers, with the maximum greater than the minimum.
Q1: What does a penetration of 0% mean?
A: A 0% penetration means the salary is exactly at the minimum of the salary range.
Q2: What does a penetration of 100% mean?
A: A 100% penetration means the salary is exactly at the maximum of the salary range.
Q3: What is considered a good penetration percentage?
A: This varies by organization and role, but typically 50-80% is considered healthy, indicating the employee is appropriately compensated within the range.
Q4: Can penetration be negative or over 100%?
A: Yes, negative penetration indicates salary below range minimum, and over 100% indicates salary above range maximum, both of which may require attention.
Q5: How often should penetration be calculated?
A: Typically during annual salary reviews, promotion considerations, or when making new hire offers to ensure appropriate placement within ranges.