Problems with Inconsistent Midpoint Differentials

Salary Formula 35L

Source: Compensation Force

Anne Bares wrote the following in her article “Screwy Midpoint Differentials Leads to Screwy Salary Management” that appeared in Compensation Force website: “It matters because inconsistent midpoint differentials play havoc with an organization’s attempts to manage promotions, job re-evaluations and/or job upgrades in an equitable and consistent manner.

If a one-grade promotion means a 5% increase in job value in some cases, and a 23% increase in job value in other cases, it is difficult to conceive and manage salary treatment guidelines that address each situation in a fair manner.  The same holds true for job re-evaluations or upgrades.

It might be easier to defend upgrading a job in a situation where moving up entails only a 5% difference in value versus the situation where a grade change entails a 23% leap, making it difficult to handle these decisions in an equitable way.”