Pay Structure
Range penetration
Also called: range pen, salary range penetration
Where an employee's pay sits within their range, from 0% (at the minimum) to 100% (at the maximum).
Range penetration measures an employee's position within their pay range as a percentage. It's calculated as (salary − range minimum) ÷ (range maximum − range minimum).
A new hire might enter a range at 25% penetration (lower end). A tenured high performer might be at 80% penetration (upper end). 100% means they're at the range maximum and can't receive merit increases without a promotion or a range adjustment.
Range penetration is more granular than compa-ratio for tracking pay progression. It's especially useful for managers planning increases — moving an employee from 40% to 60% penetration is a clear story; moving them from a 0.95 to 1.05 compa-ratio is harder to interpret.
Example
A range runs $60,000–$90,000 (spread of $30,000). An employee earning $72,000 has a range penetration of (72,000 − 60,000) ÷ 30,000 = 40%.