Compensation & Benefits - Moving to Total Rewards philosophy

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In high growth setups, Compensation, primarily should be balanced with the following:

  • Fixed v/s. Variable: Fixed part is generally pegged to Designations @ 80th percentile of the market range, Variable is on Business Outcomes achieved basis (while the current system is also measuring Efforts, Performance etc), Variable can be at Org, Team, Individual Member level.
  • Monetary v/s. Non Monetary: Monetary part is pegged Fixed + Variable on achievements of effectiveness & outcomes, Non Monetary focus on High Recognition & More opportunities needs to be the foremost motivation & driving force to aspirations
  • Short term v/s. Long term: Long term would entail ESOPs. This would be the highest level of rewards & hence needs to be rewarded to only few specifics who are Moving the needle at outcome level + High Discretionary Efforts/3x + effectiveness than the average + Invested in problem statement for long term

Total Rewards = Monetary (Fixed, Variable) + Growth (Role Growth, Career Growth) + Non Monetary (Recognition, Culture, Work Satisfaction, Skill Growth) + Long term Wealth Creation (ESOPs)

Few KPIs to look out for:

  • % of team around 80th percentile of market rate (the percentile is context driven & the number here is tentative to cases where I have delved in) 
  • % of critical roles around 80th percentile, 
  • Any strong anomalies/disparity to market benchmarks

Compensation Upgrades would be heavily influenced / based upon the following:

  • Performance reviews & ratings (High Performers > Medium Performers);
  • Is also strongly influenced by Career Ladder; Having a bigger impact on the company would lead to higher pay;
  • Criticality of skill/capability of the member
  • Performance Evaluations are on Semi Annual / Quarterly basis, Role Upgrades can happen more than Once in Year. However, Compensation Upgrades are limited to Once a year. Comp upgrades would not necessarily have correlation to Role Upgrades, if more than 1 role upgrades happen in a year

Bonuses to teams/PODs which are consistently overachieving their OKRs and/or scoring high on critical behaviors (points rewarded by other teams, not from their own team members) on Quarterly basis.

Well defined ESOP allocation policy with frequent Buybacks of Esops, basis the profitability & fund raises to ensure the ESOP holders are able to translate it to measurable & tangible value creation