Amara Keller· HR Business Partner, Qasr Holdings
Asked in New Member Welcome ·
Is the midpoint the market rate, the target, or just the middle of the range?
I have been a reward analyst at a building products manufacturer in the Midlands for four months, about 2,300 employees in the UK. Before that I worked in management accounts.
People in my team use midpoint, market rate and reference point as though they were the same word. In our structure the midpoint of grade 6 is 41,500 pounds, but the market median for some grade 6 jobs is 38,000 and for others 46,000.
So what is the midpoint supposed to represent? And when a job's market rate is well away from its grade midpoint, which one wins?
6 helpful · 3 replies · 126 views · 2 following
Accepted answer· by Farrah Grant
Arithmetically it is only the middle of the range. By policy it is usually what the organisation means to pay a fully competent person in that grade, set at a chosen market position, often the median. A grade holds many jobs, so the midpoint is a compromise: roughly the average market rate of the benchmark jobs slotted there. A common tolerance is plus or minus 10 per cent of midpoint. Your 38,000 job is 8 per cent below and fine. The 46,000 job is 11 per cent above, which suggests it belongs a grade higher or needs a market supplement.
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