Skip to main content
All CollectionsAdministratorSalary mapping
How is the Salary Dispersion calculated?
How is the Salary Dispersion calculated?
Written by Tobias Danielsson
Updated over a week ago

Salary dispersion refers to how much salaries vary within an organization or a specific occupational group. Salary dispersion can be calculated by measuring the variation in salaries.

A common way to measure salary dispersion is to use standard deviation. Standard deviation shows how much salaries vary from the average salary. The higher the standard deviation, the greater the salary dispersion.

To calculate the standard deviation, one first needs to determine the average salary for the group being measured. Then, for each individual in the group, the difference between their salary and the average salary is squared, and these squared differences are added up for the entire group. Next, the sum of squares is divided by the number of individuals in the group minus one, and the square root of the result is taken. This gives the standard deviation.

It is important to note that salary dispersion is not the only measure of pay discrimination. An organization can have low salary dispersion while still having pay discrimination based on gender or other discriminatory factors. Therefore, it is important to use multiple methods to investigate pay discrimination.

In the summary report of a equal pay audit, the sum of salary dispersion is included. The salary dispersion is calculated as a percentage of the median salary - the formula is the 90th percentile minus the 10th percentile - the sum is then divided by the median salary.

Did this answer your question?