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Range Spread Formula:
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The Salary Range Spread Percentage measures the difference between the maximum and minimum salary in a pay range, expressed as a percentage of the minimum salary. It helps organizations understand the width of their salary bands and ensure competitive compensation structures.
The calculator uses the range spread formula:
Where:
Explanation: This formula calculates the percentage difference between the highest and lowest salary points in a pay grade, providing insight into salary progression opportunities.
Details: Range spread percentage is crucial for compensation planning, ensuring internal equity, maintaining market competitiveness, and supporting career progression within organizations.
Tips: Enter the maximum and minimum salary values in dollars. Both values must be positive numbers, and the maximum should be greater than or equal to the minimum.
Q1: What is a typical range spread percentage?
A: Typical range spreads vary by job level but generally range from 30% to 50%, with higher percentages for senior positions.
Q2: How does range spread differ from compa-ratio?
A: Range spread measures the width of the entire salary range, while compa-ratio measures where an individual's salary falls within that range.
Q3: Why is range spread important for HR?
A: It helps determine appropriate salary progression, supports promotion planning, and ensures competitive pay structures that attract and retain talent.
Q4: Can range spread be too wide or too narrow?
A: Yes, too wide may indicate inadequate progression, while too narrow may limit growth opportunities. Both can impact employee motivation and retention.
Q5: How often should range spreads be reviewed?
A: Annually during compensation reviews, or when significant market changes occur that affect salary benchmarks.