FNDN Series Budgeting for Comp Cycle with Melissa Theiss, Head of People Ops at Kit & Founder of Fledge
Jun 7, 2025
Melissa Theiss, a four-time head of business and people operations and founder of Fledge, shares her expertise on budgeting for startup compensation cycles. She breaks down five essential compensation buckets every startup needs. The discussion emphasizes the importance of collaborating with finance teams to allocate budgets effectively. Melissa offers practical strategies to reward high performers, avoid common pitfalls, and foster goodwill with finance throughout the year. Tune in for insights that enhance your approach to compensation management!
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Five Compensation Buckets
- Separate your compensation budget into five buckets: merit-based increases, promotions, market adjustments, international inflation adjustments, and signing/retention bonuses.
- Collaborate with your finance team to understand how to calculate and allocate funds across these categories effectively.
Merit Raise Budgeting Tips
- Allocate merit-based raises only to a percentage of employees according to your review cycle, not 100%.
- Use benchmarking data to set raise percentages and consider performance ratings in your decisions.
Avoid Market Adjustment Pitfalls
- When conducting market adjustments, increase the overall compensation budget rather than reallocating from merit or promotion pools.
- Avoid reducing funds for high performers by not pulling from merit or promotion increases to cover market changes.