HR Mavericks

Eddy’s HR Mavericks Encyclopedia

Midpoint Progression

Midpoint progression is used when building and implementing a salary structure that is consistent and fair.

What Is Midpoint Progression?

Midpoint progression represents the relative increase in a salary structure midpoint from one level to the next, expressed as a percentage. (Click here to see more information on salary ranges.) If your firm doesn’t have a formal salary structure yet, midpoint progression can also refer to the relative increase between market midpoints from one level of job match to the next.

Why Is Midpoint Progression Important?

Midpoint progression is an important part of any firm’s salary structure and job architecture. The distance between midpoints quantifies the relative value of jobs and levels to the firm. This communicates to your leaders and employees how they should think about pay growth and pay opportunities in the context of “climbing the ladder.” For example, an entry level accountant who’s been in their role and performing well for a few years may ask their manager about the next step in their career. Presuming the individual received a merit or other pay increase each year, they’ve likely grown their base pay by 6-10%. If the midpoint progression is 18%, the employee is well-positioned to move to the next level with a promotional increase to reflect the increased scope of role, without feeling undervalued by being back at the very bottom of the pay range.

How to Calculate Midpoint Progression

Thankfully, calculating midpoint progression is quite simple. Let's say you want to calculate the midpoint progression between an entry and intermediate level technician.

Step 1: Identify the Levels

You’ll want to know the midpoint salary/hourly pay values for the two levels of technician in question. In this case, these are $22 per hour and $26 per hour.

Step 2: Subtract

Subtract the lower level midpoint ($22) from the higher level midpoint ($26).

Step 3: Divide

Divide the answer from Step 2 ($4) by the lower-level midpoint ($22).

Step 4: Convert

Convert your answer from Step 3 to a percentage by multiplying it by 100 (4 / 22 = 18.2%) .

How Should Midpoint Progression Be Used?

Midpoint progression in and of itself tells you only the relative value of jobs. It does not tell you the absolute value. The absolute values are indicated by the midpoints and ranges in the salary structure. Therefore, its uses are limited.

Building a Salary Structure

When building a salary structure using your identified “structure jobs,” you’ll end up with some number of levels that align to certain market levels. Sometimes your structure may not align one-to-one with the market structure. This is often the case if you match to more than one survey vendor. Here, having your midpoint progression aligned to the value of each level in your internal structure results in a structure that encourages employee growth, mobility, and equitable compensation.

Crafting Pay Guidelines

Pay guidelines—the rules and policies the firm uses to manage pay—help you manage your compensation program using the right blend of consistency and flexibility. Midpoint progression is a factor you should consider when creating guidelines that inform base pay changes. If your guidelines indicate an 8% increase when an employee is promoted up a grade but your midpoint progression is 32%, you may end up underpaying for that employee’s contributions in the new role.

Validating and Comparing Your Structure

We often need to compare our structures with that of another company or to the market. Other times, we just need to validate that it makes sense. Midpoint progression is one of those helpful metrics that can tell you if what you have makes sense.
Ryan T. Sattler, MBA, PHR

Ryan T. Sattler, MBA, PHR

Ryan currently lead M&T's compensation operations (programs, analytics, platforms) and consult with infrastructure functions on how best to align rewards and business strategy. It's the perfect culmination of his time formulating and articulating business strategy for M&T's Consumer Bank and many years focused on Talent Management and people strategy as an HR Business Partner. He love solving complex business challenges with a keen focus on people implications. After-all, few problems or solutions are independent of people. He tries to stay active on various platforms (you know how hard it is) - LinkedIn, Twitter, and The Careerists [ now defunct :( ]. When invited, he enjoys speaking to students at the University at Buffalo about career development and networking in business.
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