One team member who was in a group that was making far more compensation than their higher titled colleagues in another part of the organization asked, "Why is that person a Vice President and I am only a Director?" Another commented, "We have VPs making manager-level salaries." And the more general theme shared by others surveyed, "I want to know where I stand." These weren't complaints from only a handful of disgruntled team members, rather they were themes surfaced across dozens of team members at a growth stage company that grew to over 2,000 team members. During their earlier period of growth, they had amassed nearly 950 unique job titles. Every title was negotiated individually and there was no common language or defensible logic other than, "It was a phase of high growth, we needed to make hires, and we didn't have the time to build a standardized system." While it may have gotten them by at 200 and even 500, the cracks from those earlier decisions turned into crevasses as the organization exponentially grew and the talent demands changed.
And this is what a compensation program looks like when it grows without a foundation.
Building one from scratch—or fixing one that's broken—isn't as intimidating as it sounds. But the sequence matters more than most people realize. Here's the sequence I've used in both growth tech and, most recently, VC. The only difference between the two was the data sources used.
Step 1: Define your data sources first. Before philosophy, before ranges, before anything—decide what surveys you're going to trust and why. Your data source determines your market definition. No data means no foundation.
Step 2: Map your people to levels using the survey's definitions—not your internal titles and certainly not what someone negotiated three years ago. This is where you find out how much drift has happened—and it's almost always more than leadership expects.
Step 3: Assign all your team members to job families and regions. Again, follow the survey architecture. Consistency here is what makes the whole structure defensible later.
Step 4: Now determine your desired philosophy. What percentile are you targeting? Are you competing on base, equity, or total rewards? Only after you've mapped reality can you make an honest decision about where you want to land.
Step 5: Run the numbers and pressure test affordability. This is where the conversation with Finance must happen. A beautiful comp philosophy that blows your budget isn't a philosophy, rather a path to burning runway.
Step 6: Based on where you land on Step 5, this is where tradeoffs that define the working philosophy are made. This is also where you will likely need to get creative to make the philosophy come to life. Decisions will need to be made on which job families need more aggressive benchmarking on cash and
equity, in which regions can the company afford to be competitive, where we offset cash for higher benchmark levels of equity. This step will require a tight partnership with Finance and executive leadership and will likely end with a different direction than you set in Step 4 as it will be the workable
solution.
Step 7: Audit. Map every team member and future budgeted role against the new structure before anything goes live. Know where your gaps are before your team members do.
Step 8: Roll out, train your managers, and make pay corrections where necessary. This is the step companies are most tempted to delay. Don't. Identified inequities that don't get corrected erode trust faster than if you'd never done the audit at all.
Step 9: Iterate. I think this should happen at least once a year, but no more than twice. It should be aligned with budget planning for future fiscal cycles so there are no roadblocks if adjustments need to be made during future pay exercises.
You don't decide your philosophy until later steps. Most leaders want to start there. But if you don't know what your people are truly doing and how the market defines those roles, your philosophy is built on assumptions rather than reality, which could be a fatal error that could impact your ability to hire and retain or your financial runway to support growth and financial sustainability.
The most dangerous compensation advice a founder or leader can get is a spreadsheet of titles and market rates with nothing underneath it. I've seen well-meaning talent and HR partners hand this to leaders and let them run with it, which is a slippery slope. A title and a percentile without the foundational work is a guess dressed up as an answer—and building on it will cost you far more to fix later than if you'd started from scratch and built a leveling, title, and pay foundation that scales with the business.