Many companies see their compensation plans as an afterthought. We want to help businesses get compensation right from the beginning because it plays a crucial role in how both candidates and employees develop trust with their employer. Too often, the finer points of compensation are set arbitrarily. Particularly as startups grow to include more than one person in a job family, compensation levels may be set based on the individual attributes of a particular candidate, such as what they earned in a previous role. Though compensation should reward the value each individual brings to the team, it’s too easy for a lack of coherent thought behind compensation to result in pay disparities. We know from decades of research that these are uniquely harmful to those with the least historic power, like women and people of color.
That’s where a compensation philosophy comes in. A Compensation Philosophy is a framework for compensation for your candidates and employees. Teams with compensation philosophies develop trust, understanding, and deeper education into the company’s top-line business goals.
To help you get started, we’ve created this free tool to create your first draft of a compensation philosophy, share it with candidates, and edit it in the future, as well. Our tool walks you through the process of building a compensation philosophy, from setting salary levels to structuring your equity packages. Once you’re done, you can download your compensation philosophy as a PDF to share with your current and future team members. Publishing your compensation philosophy on your website alongside a job listing is a great way for candidates to get to know your company’s values as they decide to apply. Building trust from the very start is critical to employee retention. In fact, 75% of professionals were influenced to accept their job offer because of a positive candidate experience. After all, you never get a second chance to make a first impression.
Compensation philosophies should fit the company and there’s so much more that our free tool could include in the future. If you have a suggestion about how we can make this tool even better, email us at firstname.lastname@example.org.