In this survey, more than 9 in 10 companies have a compensation philosophy. Sixty-two percent have a written policy and 31% have an unwritten policy. For the purposes of this survey, compensation philosophy is defined as a statement explaining an organization’s beliefs about how people should be paid, as well as how that pay should support the business strategy and fit within organizational culture. A key component is how the organization intends to pay its people relative to its competitors (i.e., the desired market position). While the majority of all organizations have a compensation philosophy, 53% indicate that most or all employees do not understand it.