Which metric measures the difference between the minimum and maximum of a pay range?

The metric that measures the difference between the minimum and maximum of a pay range is known as Range Spread. This term refers specifically to the width of the salary range for a particular position or level within an organization. By evaluating the Range Spread, HR professionals can assess the competitiveness of their pay structures and ensure they are appropriately compensating employees within a given role.

Understanding the Range Spread is essential for making informed compensation decisions, as it provides insight into the flexibility within the pay structure. A wider spread might indicate more room for increases and progressions within a role, while a narrower spread could signify a more rigid pay structure.

In contrast, the other options relate to different aspects of compensation strategy but do not specifically address the calculation of the difference between minimum and maximum pay ranges. For example, a Market Ratio typically compares an organization’s pay rates to the market rates for similar roles, while a Green Circle rate refers to a pay rate that is below the minimum of the established pay range for a job. Additionally, a Geographical Differential accounts for cost-of-living differences in various locations, impacting pay scales but not directly measuring the pay range itself.