Compensation glossary

An employee's pay divided by the midpoint of their pay range, expressed as a decimal or percentage.

When new hires earn similar pay to (or more than) tenured employees in the same role.

A grouping of jobs with similar internal value that share a single pay range.

The minimum-to-maximum pay band an employer assigns to a job or pay grade.

The center of a pay range, typically anchored to the market median for the role.

Where an employee's pay sits within their range, from 0% (at the minimum) to 100% (at the maximum).

The percentage difference between a pay range's minimum and maximum.

The complete framework of pay grades and ranges an organization uses to assign compensation.

A multiplier applied to survey data to project compensation values forward to a current effective date.

The date a survey's data is reported as being valid for, after any aging adjustments.

A survey methodology where employers submit data per employee (per incumbent) rather than per role.

A framework that classifies jobs into consistent levels (e.g., entry, senior, principal, manager, director) for benchmarking and internal equity.

The process of mapping your internal jobs to a survey's standardized benchmark jobs to pull comparable market data.

A survey methodology where employers submit one data row per role, summarizing the pay across all employees in that role.

A statistical cut that shows where a given pay level sits in the overall market distribution.

A discounted price (or sometimes free access) offered to employers who submit data to a salary survey.

The fixed, non-variable annual or hourly compensation an employee earns before bonus, equity, or benefits.

Compensation paid in company stock or rights to acquire stock — typically RSUs, options, or PSUs.

Compensation that vests or pays out over multiple years, typically delivered as equity grants.

A cash bonus paid based on annual performance, typically expressed as a percentage of base salary.

Base salary plus any short-term cash bonus or commission earned in the same period.

Total cash compensation plus the annualized value of long-term incentives like equity grants.

Any compensation that varies based on performance — typically bonuses, commissions, and equity grants.

A documented statement of how an organization makes pay decisions and why.

What employers pay for talent in a specific geography — distinct from cost of living.

A multiplier applied to a national pay range to reflect higher or lower pay levels in a specific geography.

An organization's stated strategy for paying above, at, or below market median.

The principle that pay differences inside the organization should reflect legitimate differences in scope, level, performance, or tenure.

The principle that employees doing similar work should be paid similarly, regardless of gender, race, or other protected characteristics.

Practices and laws that require or encourage disclosing pay information to employees, candidates, and the public.

A pay increase awarded for performance, typically as part of an annual review cycle.

A pay adjustment given when an employee moves to a higher level or pay grade.

A one-time payment offered to current employees in exchange for staying through a defined period.

A one-time payment offered to new hires as an inducement to accept an offer.