Compensation Policy Development

Be Market-Informed, Not Market-Led. Compensation survey data is a guide, not a rulebook. Too many companies take raw survey benchmarks and turn them directly into salary bands. The result? ❌ Pay structures with inconsistent jumps between levels. ❌ Career paths that don’t make sense internally. ❌ Overpaying or underpaying without a clear strategy. What percentiles actually tell you: 25th = Lower-paying employers or early-stage startups 50th = Mid-market positioning 75th = Competitive for talent 90th = Top-tier pay for rare skills None of these are inherently “good” or “bad.” What matters is what fits your strategy. Instead of being market-led (rigidly following percentiles), aim to be market-informed: ✅ Use market data as a starting point — not the final answer. ✅ Build structured salary bands that align with career growth. ✅ Ensure pay progression supports internal mobility. Compensation should be strategic, scalable, and intentional — not dictated by a percentile.

Every pay decision tells a story — about what the organization truly values. If that story hasn’t changed in years, your pay mix may be rewarding the past, not the future. In today’s landscape, compensation design has become far more than a mechanism for retention, it is a strategic instrument that shapes culture, drives performance, and signals what the business stands for. I’m sharing The Strategic Pay Mix Toolkit to help leaders re-think how their compensation architecture supports strategy, agility, and well-being. Key insights include:  🔹 The evolution from tenure-based pay to a Total Rewards mindset 🔹 Market practice pay mix ratios by level and impact 🔹 Design principles for building sustainable, high-impact reward structures #TotalRewards #PayMix #CompensationStrategy #RewardDesign #PeopleStrategy #HRTransformation #Leadership #EmployeeExperience

A salary review impacts company culture more than any offsite. Yet, companies spend months planning offsites, and then speedrun their salary reviews. New data from Ravio shows most reviews happen without proper market data or clear frameworks. 40% European tech companies still use spreadsheets to manage compensation. 😳 What’s more, 60% of companies price new roles based on candidate salaries collected by their recruitment team. These techniques result in mistakes. And even small salary mistakes can create big retention problems. So, here’s some advice on how you can can improve your compensation reviews: 1️⃣ 𝗗𝗼𝗻’𝘁 𝗿𝗲𝗹𝘆 𝗼𝗻 𝗺𝗮𝗻𝘂𝗮𝗹, 𝘁𝗶𝗺𝗲-𝗰𝗼𝗻𝘀𝘂𝗺𝗶𝗻𝗴 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 Spreadsheets, while functional, are prone to errors and can be incredibly time-consuming. There are plenty of tools out there (like Ravio) which can do the heavy-lifting now. Automating part of the process will make you 10x more efficient, freeing up HR and execs time to focus on managing compensation, not spreadsheet formulae. 2️⃣ 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝘃𝟭 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗽𝗵𝗶𝗹𝗼𝘀𝗼𝗽𝗵𝘆, 𝗶𝘁 𝗱𝗼𝗲𝘀𝗻’𝘁 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗯𝗲 𝗺𝗮𝘀𝘀𝗶𝘃𝗲 I’m often asked by HR leaders when they should write a compensation philosophy. In my opinion, the sooner the better. Without it, it’ll become very hard to rationally explain compensation decisions to employees or management. It doesn’t need to be complicated, just 1-2 pages that aim to answer why you pay the way you do. 3️⃣ 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝗰𝗹𝗲𝗮𝗿 𝗷𝗼𝗯 𝗮𝗿𝗰𝗵𝗶𝘁𝗲𝗰𝘁𝘂𝗿𝗲 𝗮𝗻𝗱 𝘀𝗮𝗹𝗮𝗿𝘆 𝗯𝗮𝗻𝗱𝘀 Without a well-defined job architecture and corresponding salary bands, it’s hard to compensate employees fairly. The absence of clear structures leads to inconsistencies, particularly when hiring new employees or promoting from within, resulting in potential salary discrepancies for similar roles. A well-structured framework ensures transparency and equity in pay across the organisation. 4️⃣ 𝗕𝗲 𝗰𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗮𝗻𝗱 𝗿𝗶𝗴𝗼𝗿𝗼𝘂𝘀 𝘄𝗶𝘁𝗵 𝘀𝗮𝗹𝗮𝗿𝘆 𝗿𝗲𝘃𝗶𝗲𝘄𝘀 Not conducting salary reviews with rigour, is another common mistake. Inconsistent reviews can lead to growing salary imbalances and missed opportunities to address issues proactively. This is especially common amongst smaller, faster growing companies with limited HR processes, where I sometimes see companies rushing pay reviews “for speed”. Reviews help demonstrate a commitment to employee development and retention. They’re worth the effort. What steps have you taken to improve compensation reviews? You can get the full report here https://bit.ly/4nFbjfP 

Compensation Grades in Workday What’s Actually Changed? Most HR teams still treat compensation grades like a static table in Workday. But in 2025, grades have quietly become one of the most powerful levers for fair, global, compliant pay. If your company is hiring across countries and compensation feels…messy, the issue isn’t your managers. It’s your grade architecture. Let me break down what’s changed ⬇️ 1️⃣ Grades are no longer just ranges...they’re the backbone of job architecture ->Old way: -Create a range → assign it to a job → hope it works. ->New way: -Build a global job architecture, then anchor each level to a grade: -Job families -Clear levels (Analyst → Manager → Director → VP) -Competencies & skills -A unified global grade per level -1 role → 1 level → 1 grade. That’s how you create internal equity at scale. 2️⃣ Localization happens in Grade Profiles, not new grades Instead of cloning grades for every new country, smart teams now: -Keep the global grade structure -Localize using Grade Profiles: -Currency -Market variations -Statutory minimums -Full-time vs part-time -Regional rules This keeps things clean....Fast... Auditable. 3️⃣ Workday 2024–2025 upgrades make grade integrity stronger ->A few game-changers: -Propose Compensation Hire embedded in the new hire UI -Range visibility + templates at the point of offer -New compliance features (minimum wage logic, red/yellow/green alerts) -Modern comp review grids that handle huge populations without breaking -Better auditability for out-of-range workers -Less spreadsheet chaos. -More manager-proof compensation. 4️⃣ Market data is finally integrated like it should be This is the biggest shift. ->Companies now combine: -Survey data -Workday benchmark data -Third-party real-time compensation intelligence (yes, live offer data) -Making min/mid/max ranges living, breathing, market-aligned inputs...not static PDFs from last year. This is vital when expanding internationally. 5️⃣ Promotions, transfers, and location moves run off grade rules In 2025, you don’t fix pay after a promotion. ->Workday recalculates automatically: -Eligibility -Plans -Ranges -Localized profiles -Compliance rules -Red/green-circle alerts Your compensation model becomes self-cleaning. If you’re scaling internationally, this stuff is not optional anymore. Want to learn how to build systems like this inside Workday? Two ways I can help 👇 1️⃣ Workday HCM 40-Hour Self-Learning Program For busy professionals who want project-style training at their own pace. Core HCM → Staffing → Compensation → Recruiting → Reporting → Integrations and more.... 2️⃣ Interview Prep Accelerator (Beta Cohort) Designed for people who finished a Workday course but still struggle in interviews. We deep-dive scenarios, confidence, storytelling & real configuration logic. Comment "workday" or DM me and I’ll send you the details. Image Src: Philippe Lauret on LinkedIn

How strong is your compensation foundation? Do you have the right elements in place? For HR/Compensation team members to be true business partners, the right foundation must be in place. Without it, the function risks being seen as reactive and administrative. With it, rewards can fuel revenue growth, employee retention, and support a healthy workplace culture. It can also give leaders the insights they need to make confident talent investments. Here’s what that foundation looks like: 1 - Market-aligned pay structures, balanced with internal equity – providing base salary ranges leaders can trust while ensuring fairness within teams. 2 - A consistent job architecture framework – applied across jobs  and employees to support career development, transparency, and comparability. 3 - Well-documented compensation guidelines and processes – consistently followed and clearly understood by executives, managers, and HR. This ensures alignment, reduces risk, and drives confidence in every pay decision. 4 - Compensation training, annually – equipping HRBPs, Talent Acquisition, and people managers with the knowledge to make sound decisions and communicate them effectively. 5 - An annual compensation planning cycle supported by robust software – guiding the budget spend, merit increases, bonus payouts, and LTI grants while giving managers clear guardrails for discretion. 6 - Pay equity software used daily  – ensuring equity is built into every pay decision, with real-time reporting to identify and address inequities before they become risks. 7 - Up-to-date market pricing – with accurate job matches and employee data so you can confidently answer: Are we paying competitively? 8 - Custom reporting capabilities – surfacing insights like pay compression, workforce planning considerations, and geographic differences in pay that need to be recognized. 9 - Accessible pay related resources for managers and employees – so the purpose and impact of each program are understood, empowering decisions without bottlenecking the compensation team. 10 – Up-to-date job descriptions – reviewed annually by those who oversee and do the work. 11 – Short-and long-term incentives – aligned to the business goals and with metrics that are influenceable by the eligible employees. Line of sight is clear and the payouts reward high performers more than low performers. When these pillars are in place, compensation transforms from process and fire drills to strategy. Leaders gain trusted insights, managers make informed and equitable decisions, and employees experience transparency and fairness. The question is: Does your organization have this foundation in place or are you still building it? If you are building it and need help, let’s talk. #Compensation #TotalRewards #HR #FairPay #PayEquity #PayTransparency #FutureOfWork #Incentives #Pay #CompensationConsultant

Compensation is capital allocation. Yet most companies make pay decisions without a clear framework. Here are the questions I use to align with executives on compensation design principles: 1️⃣ Talent strategy Do we want to attract a specific type of talent (e.g., skills, experiences, traits)? Do we want to retain a specific type of team member? Over what time horizon?  2️⃣ Market positioning Do we want to be below, at, or above median market value overall? By role or impact? According to what geographic or industry “market” standard? 3️⃣ Culture and inclusion Do we want to enhance aspects of culture (e.g., encourage peer-to-peer recognition) or inclusion (e.g., pay equity) through total rewards? 4️⃣ Behavioral incentives How do we want compensation and benefits to encourage people to act (e.g., in the best interest of the customer, company, themself)? 5️⃣ Financial sustainability Under what circumstances does the model need to be fiscally sustainable? ☝️ You won’t make a ton of decisions in one meeting. But you will surface the hidden assumptions that lead to misalignment later. If you want your People team to stop playing referee on every comp decision, start by getting your execs aligned on what matters—and why. I’ve run this session at multiple startups. The answers are always different — that’s why your compensation practices should be too.

A total compensation approach should reinforce the right behaviors, engagement, and business outcomes. It’s not just talent attraction or even retention. Because compensation influences how people focus, how managers make decisions, and how the organization indicates where the priorities are. But friction shows up everywhere in performance conversations, hiring decisions, equity concerns, and budget debates. HR teams know this, yet they sometimes lack the tools to build a compensation foundation that scales with the business. These resources give teams the structure to make compensation decisions more consistent, transparent, and aligned with strategy: 1. RACIS Matrix: Clarifies decision rights so compensation actions move with speed and accountability. https://lnkd.in/g_T92wf9 2. Job Description Template: Creates consistency in role expectations, leveling, and market comparisons. https://lnkd.in/gEkEY36j 3. Total Compensation Statement: Shows employees the full value of their compensation package to strengthen trust and engagement. https://lnkd.in/gK8YeWXr 4. Merit Matrix: Guides salary adjustments based on performance and equity principles. https://lnkd.in/gEqRbKQN 5. Sales Compensation Pay Mix Assessment: Aligns incentives with revenue priorities and role requirements. https://lnkd.in/g4fAJE5S 6. Interpolation Calculator: Supports salary decisions with scalable, data-driven ranges. https://lnkd.in/g_VTDiXT These tools help HR and business leaders operate with more discipline and reduce the ambiguity that makes compensation one of the most sensitive parts of the employee experience. 👉🏽 Explore these tools and the full Total Compensation program at Wowledge. ~~~ Click Carlos Larracilla and follow me [+🔔] for daily resources from Wowledge. ⤷ We’re ending the cycle of reinventing the wheel in HR by providing a shortcut to amplifying HR impact with: ✔ A scalable system of best practices » wowledge.com/catalog ✔ An intelligent HR roadmapping tool » wowledge.com/roadmap ✔ A seasoned community of experts » wowledge.com/about

After advising 40+ startups, I’ve noticed a pattern... The biggest compensation mistakes don’t happen at Series B or C — they’re baked in at Seed and Series A. In the early stages, comp decisions are often driven by gut decisions, inconsistent data, and the pressure to hire fast. As you scale, those early choices show up as pay inequities, title misalignment, and offers that don't fit the business you've become, which are hard (and expensive) to unwind. That’s why I partnered with Paula Judge and Peter Clarke from the Accel Talent Team to create Scaling Startup Compensation: A 3-part series for founders and people leaders looking to build intentional compensation systems that scale. ⚙️ Part 1: Build Compensation Foundations that Scale You’ll learn how to: 📝 Evolve your approach from Series A → B → C 📝 Define your compensation philosophy that reflects your values 📝 Create job levels that grow with the company 📝 Build salary bands that balance fairness and competitiveness This work wouldn’t have been possible without insights from compensation experts, Armina Behrouzi, CEP, CECP, Matt McFarlane, Lola Han, Ashish Raina, and Tudor Havriliuc, plus resources from Complete, Kamsa, Carta, Pave, ChartHop, and other trusted compensation tools. Coming next: ⚙️ Part 2: Using the right market data and tools to operationalize your strategy ⚙️ Part 3: Designing equity programs that attract and retain top talent For now, dive into Part 1 and learn how to build a scalable compensation framework that’s clear, fair, and built to last. Read Part 1 👉 https://lnkd.in/emrsieQ2

The most expensive mistake I see startups make? Waiting until 50+ employees to build their compensation strategy. By then you've already: - Created random job titles - Set arbitrary pay bands - Built comp inequity into your culture - Lost key talent who couldn't see their career path Here's what happens: You're growing fast. Hiring like crazy. Someone asks "what's our career ladder?" or "how do we level engineers?" *crickets* You scramble to implement performance reviews and engagement surveys. But those are bandaids if people don't know their career trajectory. The fix? Build your pay & career framework by employee #25. Not employee #50. Your comp strategy IS your career strategy. Quick framework to start: 1. Define clear job architectures 2. Set market-aligned pay bands 3. Create transparent growth paths 4. Build flexibility (cash vs equity trade-offs) 5. Document it all The companies that nail this early avoid the painful reorgs and retention issues later. Curious - at what stage did your company implement a formal comp strategy? Drop a comment below. Want more comp planning tips? Follow my page or shoot me a DM. #startup #compensation #careers #hiring

When I hear a leader say, 'I want my team to take more ownership,' I look for misalignment in how total compensation is linked to company growth. 🔍 Exercise to Realign Your Total Compensation: 1. List and Map Compensation Elements: Start by mapping out each component of your total compensation. Use the matrix below to align each piece with both individual and company growth, in the short and long term. Include both variable and fixed elements. 2. Justify Each Component: For every item on your list, clarify why it's part of your compensation strategy. For example, why does your company offer profit-sharing bonuses? This helps ensure each component supports your overall objectives. 3. Draft or Update Your Compensation Policy: The explicit and specific document on how your company wants to balance revenue growth with team member growth and the unique talent required to achieve your specific core business objectives. The above exercise sets the foundation for your Compensation Policy, beginning with the crucial first pillar: 🧩 Compensation Matrix: Define the elements of compensation that will attract and motivate your team. Continue on to the other pillars of a Compensation Philosophy: 📐 Market Position: Identify the specific talent types (e.g., highly specialized, generalists) your business needs. 🌎 Location Strategy: Decide on the market data to use for setting pay percentiles. 💪 Performance Review Frequency: Determine how often performance evaluations and compensation adjustments should occur. 🪟 Transparency Level: Decide how much compensation data you will share with your team and why.