Compensation bands define salary ranges for each role at each level in your company.
Compensation bands are pre-defined salary (and equity) ranges for each role and level in your company. They exist to solve one problem: without bands, every offer becomes a negotiation, negotiations reward the loudest candidates, and internal pay equity erodes until half the team learns via Blind that they're underpaid. With well-designed bands, hiring managers close candidates fast, offers reflect market and internal fairness, and comp reviews become manageable.
Standard: each role has 3-5 levels (e.g., IC1 through IC5 for engineering, plus separate manager tracks). Each level has a band with a minimum, midpoint, and maximum — typically the max is 30-50% above the min. Bands are set against market data (Radford, Option Impact, Pave, Levels.fyi) at a target percentile (typically 50th-75th for cash, sometimes higher for equity). Same-level bands vary by geography if you have multiple pay zones.
Bands only work if you have a clear leveling framework — what does IC3 mean vs IC4? Without it, level assignments become inconsistent, bands become meaningless, and 'let's just bump them to Senior' becomes the escape hatch. Leveling rubrics should be documented with specific behavioral descriptors per level: scope of ownership, technical/functional depth, autonomy, cross-team influence.
Debate: publish bands to the whole company or keep them private? Fully-public (Buffer, GitLab): maximum transparency, most equity, some recruiting complications. Manager-visible: managers see all bands, ICs see their own. Private: only leadership and HR. Trend is toward more transparency, driven by pay-transparency laws (NY, CA, CO, WA) that now require salary ranges in job postings anyway. Fully-private bands increasingly indefensible.
Compa-ratio = individual salary / band midpoint. Track distribution across the team: healthy is a curve centered around 1.0 with most people in 0.85-1.15. Systematic patterns (all women below midpoint, all one race above) signal pay equity problems that need active correction. Adjustments happen at annual comp reviews with a specific pay-equity budget.
Standard cadence: full band review annually against fresh market data. Mid-year adjustments if a role's market has moved materially (during 2021-22, engineering bands moved 20%+ mid-year in many companies; during 2023-24, some moved down). Company-wide band changes are communicated openly with methodology — mystery band changes destroy trust faster than the underlying decision.
Investor directory · Fundraising library · Articles A–Z · Company funding database