Many companies develop compensation programs without first determining and understanding what the compensation philosophy should be. A compensation philosophy establishes a company’s position on total rewards (compensation and benefits) relative to internal and external factors, and serves as the baseline upon which compensation decisions are made. A compensation philosophy should be unique to your company, based on your current business strategy, culture, peers, long-term goals, etc., and a clearly defined philosophy will enable an organization to design solid compensation programs that serve to accomplish the key goals of attraction, retention, and motivation. Once the philosophy is adopted, its success is dependent on the communication to staff, while ensuring that any compensation program developed is abiding by its concepts.