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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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Basé sur la classification professionnelle SOC
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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