Compensation

A compensation philosophy allows you to be transparent with all of your employees about your approach to total rewards. To help you get started, we’ve put together a sample compensation philosophy below. It’s designed for technology startups that pay employees with a mix of base salary, bonuses, and equity. You can use this compensation philosophy as a template for your own, or just use it as a source of inspiration.

A compensation philosophy is one of the key elements of a thorough compensation management plan. A well designed compensation philosophy describes a company's approach to determining and providing pay and benefits to its employees. It also serves as a framework for how the company rewards its employees for the contributions that they make to the organization.

Total compensation or “TC” as it’s colloquially (and somewhat sarcastically) referred to across the tech industry, is a term referring to the sum total of all of the monetary compensation that an employee receives in a given year. In tech company circles, it has become a common term that allows employees at different companies to compare their compensation and determine whether they’re being paid a market rate. 

Compensation bands are an integral part of a great compensation program. Compensation bands simplify decision-making, prevent salary compression, and ensure pay equity. They’re an important tool as you level up and ensure that your comp plan is effective. If you don't have bands in place yet, here are some tips on how to get started.

It's easy to establish pay ranges directly from compensation survey data, but that is not a good approach. It's important to make decisions based on all your data, including current employee and offer numbers.

Falling behind in compensation in today’s market can mean disaster: missed hiring targets and regrettable attrition. To avoid these issues, many companies are considering proactive raises for some or all of their teams in order to match or exceed market compensation. Here are a few points to keep in mind on emergency market adjustment raises and how to run them: