11 Remuneration Metrics to Track

Successful organisations understand that employees are largely motivated to contribute when they are paid well and offered a great employee experience with opportunities for career growth.

Remuneration (or compensation) metrics help business owners see at a glance if they’re paying workers enough to keep them satisfied, while also ensuring each employee’s remuneration correlates with their performance and overall contribution to the business.

Why should you track compensation metrics?

Many managers miss out on this valuable intel because they fail to measure the effectiveness of their HR initiatives, even as they question why they don’t see positive results. Organisations that use metrics effectively are in the minority, but those that do have a distinct competitive advantage.

There are potentially hundreds of HR metrics to track, so selecting the ones that matter is an important first step. Our guide shows you how to calculate 11 key metrics relating to remuneration and covers their importance in the remuneration and performance management process, including:

Compa-ratio (comparison ratio)

The compa-ratio (comparison ratio) compares an employee’s salary with the market midpoint (middle of the range salary) for similar positions at other companies.

Average salary

This metric represents the average (typical) salary earned by employees in a particular department, industry, geographic location or other category.

Percent over range

Percent over range is the percentage of employees who are being paid over the maximum amount within the allocated salary range.

Performance to pay relationship

The performance to pay relationship represents the difference in earnings between performance levels (as a percentage).

Promotion Rate

The promotion rate represents the percentage of employees who have been promoted within a specific time frame.

Employee turnover rate

The employee turnover rate represents the percentage of staff who leave an organisation over a certain timeframe (it’s commonly measured on a yearly basis).

Consumer Price Index (CPI)

The consumer price index (CPI) measures changes in the price of goods and services for households over time, based on the weighted average that comes from survey information.

Wage Price Index (AU) and Labour Cost Index (NZ)

The Wage Price Index (WPI) (AU) and Labour Cost Index (LCI) (NZ) measure changes in wages and salaries for jobs, unrelated to the performance quality or production quantity.

Unemployment rate

The unemployment rate represents the percentage of the total workforce without a paid job.

National minimum wage increase

The national minimum wage is the lowest hourly wage that employers are required to pay their workers before tax, as mandated by law.