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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.
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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.
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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.
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