Midpoint Progression: How to Space Your Pay Grades
Date Published
Midpoint Progression: How to Space Your Pay Grades
You have scored your jobs, set your grade breaks, and picked a lowest midpoint. Now you face a quiet design choice that shapes every promotion, every offer, and every pay discussion for years: how far apart should the midpoints of your grades sit?
That gap is called midpoint progression. Set it too narrow and a promotion barely moves pay. Set it too wide and you get a structure with big jumps, thin ranges of jobs per grade, and managers who argue about who deserves the next grade up.
This guide shows you how to calculate midpoint progression, what rates are typical at each job level, how it interacts with range spread and overlap, and how to choose a rate you can defend.
TL;DR
- Midpoint progression is the percent difference between the midpoints of adjacent pay grades.
- Typical rates run about 5-10% for administrative and operative jobs, 10-15% for professional and management jobs, and 15-20% for executives.
- Progression and range spread together set overlap. A 10% progression with a 50% spread gives about 80% overlap between neighboring grades.
- Work backward from your lowest midpoint, your highest midpoint, and your grade count, then test the result against your job evaluation scores.
What midpoint progression means
Each pay grade has a midpoint, the target pay for a fully competent employee in that grade. Midpoint progression, also called midpoint differential, is how much the next grade's midpoint rises over the one below it.
The formula is simple:
Midpoint progression = (Higher grade midpoint − Lower grade midpoint) ÷ Lower grade midpoint
If Grade 4 has a midpoint of $54,420 and Grade 5 has $58,773, the progression is 8%. Keep the rate constant and your midpoints form a smooth curve. Vary it by level and you get a structure that widens as you move up, which is what most employers want.
Do not confuse it with range spread. Spread measures the width of one range, from minimum to maximum. Progression measures the distance between two ranges. You need both to understand how a structure behaves. Our guide to salary range spread and range penetration covers the spread side.
Typical rates by job level
Compensation references commonly cite progression bands that rise with job level. The Economic Research Institute lists these typical ranges in its common compensation terms and formulas:
Job level | Typical midpoint progression | Typical range spread |
|---|---|---|
Administrative and operative | 5-10% | 40% or more |
Professional and management | 10-15% | 50% or more |
Executive | 15-20% | 50-65% or more |
The logic is straightforward. Lower-level jobs differ in small steps of skill and responsibility, so grades sit close together. Executive jobs differ in large steps of scope and impact, so grades sit far apart. SHRM makes the same general point, noting that midpoint differentials vary significantly by job level.
Treat these as starting points, not rules. Your own job evaluation scores should have the final say.
A worked example: 12 grades at 8%
Say you need a structure for a 400-person company. Your lowest benchmark job prices at a $40,000 midpoint and you plan 12 grades. You choose a constant 8% progression.
Grade | Midpoint |
|---|---|
1 | $40,000 |
2 | $43,200 |
3 | $46,656 |
4 | $50,388 |
5 | $54,420 |
6 | $58,773 |
7 | $63,475 |
8 | $68,553 |
9 | $74,037 |
10 | $79,960 |
11 | $86,357 |
12 | $93,266 |
Each midpoint is the one before it times 1.08. The top midpoint lands at $93,266, about 2.3 times the bottom. That is a fine span for a structure that stops short of the executive team. If you also need senior leaders, build a separate executive structure with a higher progression rather than stretching this one.
Work backward from your target span
You can solve for progression instead of guessing. You need three inputs: the lowest midpoint, the highest midpoint, and the number of grades.
Progression = (Highest midpoint ÷ Lowest midpoint) ^ (1 ÷ (grades − 1)) − 1
For the example above: ($93,266 ÷ $40,000) ^ (1 ÷ 11) − 1 = 8%. In Excel, the RATE function does the same job, which is the approach ERI describes.
Run this check when someone asks you to "add two grades at the top." Adding grades without raising the top midpoint squeezes progression and shrinks the gap between jobs you just evaluated as different.
How progression and spread set overlap
Overlap is the share of a range that also sits inside the next range up. It is the main reason you care about progression, because overlap determines whether a promoted employee's new range still includes their old pay.
Here is how overlap behaves for a 50% range spread (minimum 80% of midpoint, maximum 120%), measured as the share of the lower range that the next grade also covers:
Midpoint progression | Overlap with next grade |
|---|---|
7% | 86% |
10% | 80% |
15% | 70% |
20% | 60% |
Wide overlap lets a strong performer in a lower grade earn more than a new hire in the grade above. That is normal and healthy to a point. Too much overlap makes promotions feel meaningless and encourages pay compression. Too little makes ranges rigid and drives frequent off-structure exceptions. Our article on pay grade overlap shows you how to calculate it and how much is too much.
A useful rule: if you want a promotion to raise pay by 8% to 10% on average, choose a progression near that figure, then pick a spread that keeps overlap in your target band.
Five tests to pick your rate
Run these before you finalize the structure.
1. The promotion test
Take a typical employee at 90% of midpoint. After a one-grade promotion, would they land at or near the new minimum, and does that feel like a real raise? If the answer is no, widen progression.
2. The job-gap test
Look at your evaluation scores. If two adjacent grades hold jobs that differ by 30 points but their midpoints differ by 20%, you are overpaying for a small difference. Match pay steps to real differences in job size. Our guide on converting job evaluation points into pay grades shows how.
3. The market test
Compare your midpoints with market data for benchmark jobs at several levels. Progression that is steady in your structure but uneven in the market signals that you should vary it by band.
4. The span test
Divide the top midpoint by the bottom midpoint. A span under 2.0 usually means too few grades or too little progression. A span above 4.0 for a single structure suggests it is time to split into separate structures.
5. The grade-count test
More grades with low progression give fine control but more admin. Fewer grades with high progression give simpler structures but coarser pay. See our article on how many pay grades you should have for the trade-offs.
Constant or variable progression
A constant rate is easy to explain and build. A variable rate fits real jobs better. Many employers use a lower rate across clerical and technical grades, a middle rate for professional grades, and a higher rate for executive grades.
Whichever you choose, document the rule. When an employee asks why Grade 9 is only $5,500 above Grade 8, you want a policy answer, not a spreadsheet archaeology project. The same principle applies when you anchor the structure to a pay policy line built from evaluation points.
If you use steps instead of open ranges, progression still applies to the step midpoints. See salary step structure for how steps fit.
Common mistakes
Copying another company's rate. A 12% progression that works for a software firm can break a hospital with a large hourly workforce.
Ignoring the job evaluation results. Midpoint progression should follow job size, not the other way around. If your grades come from evaluation points, your spacing should respect those point gaps.
Changing progression after launch. Shifting the rate moves every midpoint and forces a pay review. Pilot your structure on current employees first.
Forgetting the top and bottom. Narrow progression at the bottom can push entry grades under minimum wage rules in some locations. Check your lowest range against current statutory minimums.
Want to see how your jobs fall across a structure? Start free with PointFactors to see evaluation scores turned into grades.
Frequently asked questions
What is midpoint progression in simple terms?
It is the percent increase from one grade's midpoint to the next. If Grade 5 has a midpoint 8% higher than Grade 4, your progression is 8%.
Is midpoint progression the same as midpoint differential?
Yes. Both terms describe the percent difference between adjacent midpoints. Some teams use "differential" for the dollar gap, so state which one you mean.
What is a good midpoint progression?
It depends on job level. Typical ranges are 5-10% for administrative jobs, 10-15% for professional and management jobs, and 15-20% for executives. Your evaluation scores and market data should confirm the choice.
How does midpoint progression affect promotions?
A higher progression means a bigger pay opportunity at promotion and less overlap between grades. A lower progression means smaller promotion increases and more overlap.
Should I use the same progression for every grade?
You can, and many small employers do. If your job levels vary widely in scope, use a lower rate at the bottom and a higher one at the top.
How do I calculate it in Excel?
For adjacent grades, use (higher midpoint − lower midpoint) / lower midpoint. To solve for a constant rate across a structure, use the RATE function with the number of grades minus one, the lowest midpoint, and the highest midpoint.
How does progression relate to my overall salary structure?
Progression sets how midpoints rise, and range spread sets how wide each range is. Together they define your whole salary structure.
Next steps
Pick your lowest and highest midpoints, choose a grade count, solve for progression, and then test overlap and promotion increases against real employees. Adjust before you publish the structure.
If you want to tie your grades directly to scored jobs, start free with PointFactors and see how evaluation points become a defensible structure.
By Justin Hampton, founder and CEO of PointFactors.
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