Looking to Benchmark Pay?
Percentages
Percentages are the most commonly used form of fractions. Computed in hundredths, they allow a representation of a fraction in terms of "cents" or 100's, providing a basis for making comparisons. In salary administration, you can use percentages for several purposes, some of which are to find the:
- fraction of a gender or racial group in a certain pay grade
- fraction of employees being paid in a certain salary range
- percentage increase in salary from previous year
Example of percentages
The total base compensation paid out to employees in your organization last year was $1.2 million. You expect this amount to increase to $1.5 million this year. What is the percentage increase in base compensation paid to your employees?
($1.5 million - $1.2 million) / $1.2 million = 0.25
0.25 x 100 = 25%
The amount of $1.5 million represents a 25% increase from last year to this year.
Memory Jogger
The total base compensation paid out to males and females in your accounting department was:
| 2012 | 2013 | |
|---|---|---|
| Males | $3.2 million | $3.4 million |
| Females | $2.4 million | $2.7 million |
Which of the statements below is correct?