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Use when articulating or revising a comp philosophy — covers market positioning, geo strategy, mix, transparency, and differentiation.
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Use when designing or applying progressive discipline — covers the escalating sequence, documentation, gross misconduct exceptions, and consistency.
Use when conducting or scoping workplace investigations — covers intake, scope, interview protocols, evidence, findings, and outcomes.
Use when auditing or designing the candidate's journey — covers communication, time, transparency, and the link between candidate experience and employer brand.
Use when designing career frameworks, level rubrics, IC and management track parity, and promotion processes.
Use when planning organizational change — covers communication architecture, sequencing, manager enablement, and predictable failure modes.
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| name | compensation-philosophy |
| description | Use when articulating or revising a comp philosophy — covers market positioning, geo strategy, mix, transparency, and differentiation. |
A philosophy answers, in writing:
From Work Rules!: "best-in-class" companies pay top performers materially more than middle performers — often 2x or more for similar role/level. The mechanism: structured calibration plus manager judgment within budget; not a formula.
This requires:
Pay-for-performance for creative work has limits (Pink, Deci): contingent extrinsic rewards crowd out intrinsic motivation. The answer is differentiation within a frame, not raw per-rating multipliers.
| Target | Implication |
|---|---|
| 50th percentile | Below market average (cost-conscious, often risk = retention) |
| 65th–75th percentile | Common at growth-stage tech; competitive but not extravagant |
| 90th percentile | Premium positioning; signals "we pay top of market" |
| 50th cash + heavy equity | Common pre-IPO; equity carries the upside |
The choice signals what the company believes about talent and risk. Document.
| Pattern | Pros | Cons |
|---|---|---|
| Single national band | Simplicity | Over-pays low-cost; under-pays high-cost; arbitrage |
| Multi-zone bands (Tier 1: SF/NY; Tier 2: regional; Tier 3: low-cost) | Common; balances market reality | Complexity; equity questions across tiers |
| Follow-the-employee | Simple when people move | Cost surprises |
| Follow-the-role | Comp set by primary location | Some constraints on remote flexibility |
Document the choice. Apply consistently.
Typical pre-IPO:
Sales typically has commission structure separate from this; align via on-target earnings (OTE).
| Level | Practice |
|---|---|
| Closed | Bands undisclosed |
| Bands shared | Employees see bands for their level |
| Full transparency | All comp public |
| External transparency | Bands on job listings |
Default recommendation: bands shared internally; ranges on offers and job postings; legally required jurisdictions drive minimum.
A company without an explicit refresh philosophy ends up with retention bumps for people threatening to leave — corrosive.
The philosophy should be communicable to:
If the philosophy can't be repeated in 2 sentences, simplify.
compensation-strategist agentpay-bands-market-data skillpay-equity-analysis skillequity-design skill