How to Calculate Compensation Position in Range

by Dennis Bortolus; Updated September 26, 2017

Many employers create salary ranges or grades used to assign compensation to individual jobs within the organization. The salary range allows you the ability to recruit employees of varying abilities and allows for salary increases for employees already holding positions. Ranges are also used in budgeting and planning. Salary ranges are often dictated by the employment market and the region in which your company does business.

Step 1

Assign each job title a salary range. You can maintain your own organization's ranges based on budget.

Step 2

Set a high and low salary for each range. Ranges can be reused for more than one job type.

Step 3

Calculate the midpoint in the range. This is done by adding the low salary to the high salary and dividing by 2.

Step 4

Cut your salary range into quarters or "Quartiles." You already have two sections from the midpoint calculation in Step 3. Find the quarter points between the low salary, midpoint and high salary. You now have 4 ranges of salaries. Quartiles are numbered from one to four based on low to high salary range.

Step 5

Compare the employee's salary to the quartiles. If the salary falls within one of the quartile ranges, the number of that quartile is the position in range.

About the Author

A consultant with more than 30 years experience, Dennis Bortolus has been writing business articles, newsletter columns and speaking at conferences since 1998. His work has appeared in "HR Focus," "HR/PC Quarterly," "Business Officer," "PayTech," "Dialog" and "Employer Practices" among other publications. Bortolus holds a Bachelor of Science in business from Fairleigh Dickinson University.