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What is a midpoint differential?

The percentage difference between the midpoints of adjacent pay ranges The width of a pay range The difference between the top and bottom of a range The difference between market rate and midpoints

Correct Answer:

The percentage difference between the midpoints of adjacent pay ranges

Explanation:

Midpoint differential is the percentage difference between the midpoints of adjacent pay ranges. It measures how far apart the salary targets are from one range to the next, creating the ladder of progression within a pay structure. For example, if one range has a midpoint of $50,000 and the next adjacent range has a midpoint of $60,000, the midpoint differential is 20% because (60,000 − 50,000) / 50,000 = 0.20. This spacing helps ensure promotions yield meaningful increases and keeps pay progression consistent. It’s not the width of a range (that’s the range spread) nor the difference between the top and bottom of a single range, and it’s not the gap between market rate and midpoints.

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