Salary Comparison Guide
Fairly easy to most of you. The average is the sum of salaries divided by their count. For example, the average salary of 1500$, 2500$ and 5000$ is (1500 + 2500 + 5000 = 9000) divided by 3 equals to 3000$. The average salary is a good indicator in general but it does not tell the whole story. For example, suppose we want find out the average salary of four bankers with the following salaries: 1500$, 1500$, 2500$ and 11500$. The average salary will be $4000 but does it give you a good idea of a banker's salary? Ofcourse not. All of the bankers earn less than $4000 except for one earning too high above the rest causing the average to be high. In this case the average is a poor indicator. Keep in mind: the more data you have the less likely you are to get a misleading average. As a general rule it's a good thing when your salary is above the average.
Median salary is the middle value that splits the data into two halfs: a lower half and a higher half. In our example above, the median salary of $1500, $1500, 2500$ and 11500$ is 2000$. Half of the salaries are less than 2000$ and the other half are greater. In general, the median is a good indicator when comparing salaries because you can easily tell whether you are on the better or worse side. Use the median to find out to which half you belong: the better or worse half.
The range is nothing but the maximum and minimum values. It is not really tell you much but it gives you a good idea of the acceptable salary figures for a particular job. If the highest paid banker gets 2000$ and the lowest gets 1500$ then your salary should be somewhere between these two figures. In general, it is a good thing if your salary is above the middle value of the range.
Probably the most difficult concept to grasp among all. It can best be illustrated by an example: if we say that the 60th percentile of bankers is 2000$ it means that 60 percent of all bankers earn less than 2000$. The ramaining 40 percent of bankers get more than that. In the salary comparison report we will show your percentile value. If you get for example 70% it means you are earning more than 70% of you colleages. Only 30% are getting more than you. The higher your percentile the better. As a general rule, it is a good thing if your percentile value is more than 50%.
So how do I compare my salary?The diagrams below explain the whole story but read on. First look at the median and determine wehther your salary is more or less than the median salary.
If your salary is above the median then you are on the better half but look at the average. If your salary is above the average then you are in a very good situation. If your salary is below the average, then you are still in a good situation but you may be missing some real good paying jobs in your field.
If your salary is below the median then you are on the worse half but look again at the average. If your salary is above the average then this means that you are not very far from the better half. Most probably the people who are earning better than you are only getting a little bit more. If your salary is below the average then you may want to ask for a raise or consider changing your job.
A very good position:
A good position but you are missing some high paying jobs:
A normal situation. Many people are doing better than you but not by much:
You may want to ask for a raise or consider changing your job:
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