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Is your comp strategy built to last, or built on vibes?
The four pillars every comp framework needs in 2025 (and no, "gut feeling" isn’t one of them).
Erik Bates
June 11, 2025
Building a Strategic Comp Framework (That’s Actually Strategic)
A lot of companies say they have a compensation strategy. What they really have is a budget and a vague sense of guilt during merit season.
Heading into 2025, that’s not going to cut it.
A real, working compensation framework is built on four key pillars—ones that can actually withstand a shifting market, growing employee expectations, and your CFO’s spontaneous math edits.
1. Market Competitiveness
You don’t have to pay at the top of the market. But you do need to know what the market even is. Competitive benchmarking is the starting point—not the strategy itself.
2. Internal Equity
It’s not just about what the market says—it’s about what makes sense inside your organization. If your new hires are out-earning your veterans, don’t be surprised when retention dips.
3. Budget Management
Strategy dies in the spreadsheet if it doesn’t align with budget reality. Sustainable pay practices mean making smart tradeoffs—not crossing your fingers during comp planning.
4. Employee Value Perception
How employees feel about pay matters as much as what you’re actually paying. If your comp program is fair but confusing, it won’t feel fair at all.
TL;DR: A strong comp framework balances market pressure, internal fairness, financial limits, and human perception.
If you’re leaning too hard on just one, the whole thing starts to wobble.
Until next time,
Erik
CompCatalyst