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Compensation Philosophy Statement

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Compensation Philosophy Statement

  • Course: Compensation 101
  • Module: Strategic Compensation
  • Lesson Type: Video
  • Lesson Duration: 1:08

Lesson Content

Many organizations develop a formal Compensation Philosophy Statement. A Compensation Philosophy Statement is defined as a statement that reflects an organization’s compensation strategy and that provides a framework for designing, administering, and communicating compensation programs in a consistent manner.

The general content includes:

A description of the organization’s total compensation package. For example fixed pay, variable pay, and benefits.

A description of the organization’s competitors for labor

A description of the organization’s market for pay comparison purposes

A balance between internal equity and external market

A philosophy with respect to pay mix

A description of an organization’s target market position with respect to base pay, variable pay, and benefits

The organization’s philosophy regarding relationship of performance to pay

And, guidelines for communicating an organization’s compensation programs

Pamela Sande


Pamela Sande

Pamela Sande, CCP, is the Managing Principal of Pamela Sande & Associates, LLC. Pamela has over 25 years of human resources experience in both consulting and corporate roles, including as...

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