Compensation philosophy

Compensation philosophy is a basic plan that explains how a company decides to pay its workers. It helps the company match its pay system with its goals, culture, and the kind of workers it wants to hire and keep. A compensation philosophy tells:

 Who the company competes with to hire workers
 If the company pays the same as, more than, or less than the market average
 How the company balances fairness inside the company (called internal equity) with being competitive in the market (called external competitiveness)
 How the company decides raises, bonuses, and other benefits

This philosophy gives a clear and fair way to make pay decisions. It helps managers make choices that support good work, help keep workers in the company, and show what the company believes in. It also makes sure pay plans are explained well and used the same way for everyone.

 References 

 Related pages 
 Human resources

Category:Business