Is the midpoint the market rate, the target, or just the middle of the range?

Director, Total Rewards, Copperfield Mining

Accepted answer

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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Omar JimenezGRS, CSI1y ago

Head of Reward, Ravenna Chemicals

On which one wins: the grade midpoint, unless you are losing people. I would not move a job on survey data alone. Look for evidence in turnover and declined offers over 12 months before treating it as a market problem.

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Kenji Novak1y ago

Director, Total Rewards, Meridian Health Systems

Coming from management accounts you will like this: treat the midpoint as the budget rate and the market rate as the actual. The variance by job is the report your team should be looking at each year. Ours runs to one page and it settles most of the regrading arguments.

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Is the midpoint the market rate, the target, or just the middle of the range?

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