What are compensation plans?

Compensation plans are guidelines for employees' salaries, bonuses, and equity. They are sometimes referred to as comp plans. These plans help to give a clear view of an employment package to current and potential employees of a company.

Compensation plans often represent the value that a company is presenting with its job offer. Along with that, they often outline roles and levels and show how performance is evaluated at the company. Ideally, compensation plans should be part of a total rewards plan, which shows your comp plan plus the benefits offered.