The era of pay transparency will also be an era of consistency — and not just in terms of pay levels.
Employers will also need to ensure their actions align with their words. After all, if a company’s compensation policy is out of line with the values it claims to uphold, it may face dissatisfaction from employees and candidates alike.
I’ve often said that the new North Star of compensation and benefits is this: employers must be able to justify and explain every pay decision they make. And no, saying ‘because the market dictated it’ isn’t good enough. A solid compensation policy should be based on clear, well-defined values.
Of course, not everyone needs to agree with the reasoning behind a pay decision or apply the same logic in their own company… but employers shouldn’t be criticised for paying in line with their core values.
That’s the theory, anyway. But what does this look like in practice? After all, thinking of compensation strategy as a coherent, value-driven system is a nice idea. But it’s not always easy to see how things like ‘team spirit’, ‘innovation’ or ‘ambition’ translate into concrete pay policies.
Luckily for us, some of the leading companies in this area have recently shared detailed insights into their compensation systems. This gives us a clear view of how companies can turn their values into a practical compensation strategy — one that helps guide offer decisions and compensation reviews.
Below, I’ll look at two companies that are doing this particularly well: Revolut and Danone. Both have recently shared details about their compensation strategies — here’s what we can learn from them.
Revolut: a company driven by excellence
‘A high-performance organization is A-player centric (top 15%-25%), focusing resources to retain and promote top talent while exiting underperformers as fast as possible.’
This is the principle that opens the ‘playbook’ shared by Revolut — a detailed guide to how the company aims to improve team performance. At the heart of Revolut’s approach is the belief that the company’s success relies on a small group of individuals — no more than 25% of the workforce — delivering exceptional results.
That’s why Revolut’s entire talent strategy is focused on identifying and rewarding these top performers — the so-called A-players.
I highly recommend reading the full playbook — not least because it outlines the performance review process Revolut uses to identify its A-players. Little is left up to chance or to discretion (which can, after all, lead to unfairness). The criteria used are clear and consistent across the organisation.
When it comes to compensation (our focus here), Revolut’s values are translated into clear, actionable policies:
- Merit raises are reserved for A-players, with or without a promotion. There are no across-the-board increases — other employees only receive market adjustments.
- Bonuses are awarded centrally, even though many companies are moving away from this approach. In some contexts, bonuses introduce room for discretion and can be hard to justify in the era of pay transparency. That’s not the case at Revolut, where bonuses are calculated with precision, based on both company and — especially — individual performance. As a result, top performers can receive bonuses that are three to five times higher than those of other employees.
That’s proof if we needed it that it's still possible to recognise and retain top talent in a way that’s as objective and transparent as possible, rather than opaque or based on subjective judgement. There’s often a concern that pay transparency leads to rewards being clustered around the average or scattered evenly across an organisation.
Revolut shows the opposite: the company is embracing transparency with ease, thanks to a system that identifies A-players as objectively as possible. This approach can also make a company like Revolut more attractive to certain candidates who are highly motivated by individual reward.
Whether or not we share Revolut’s values (they’re quite different from mine), it’s hard not to admire the company’s clarity and consistency.
Danone: a company driven by people
We often think innovative, transparency compensation practices are the domain of the early-stage startup. But that’s a misconception — one of the most impressive recent examples of pay transparency comes from a well-established company: Danone.
Last year, I had the pleasure of co-hosting a webinar (in French) with Margot Mugnier, then Compensation and Performance Manager at Danone. A big thank you to Margot — and to Robin Monet — for their openness and willingness to share their experiences. I’ve rarely had such positive feedback on a webinar!
During the session, Margot shared the approach her team uses during hiring and salary reviews to maximise pay equity. We also talked at length about the internal communication and training efforts Danone have put in place internally. Here, I’ll focus solely on how Danone’s values are reflected in concrete compensation policies.
Danone describes itself as a ‘people-centric’ organisation. Strong, close relationships are the cornerstone of Danone’s operations, and building and maintaining them is a top priority. From a talent management perspective, this translates to a strong focus on retaining talent. The idea is to enable ‘Danoners’ to have long, varied and fulfilling careers within the organisation.
As a result, Danone’s compensation system is designed to reward loyalty and encourage internal mobility.
The company has made some bold choices — some of which may be seen as surprising — but which aim to strengthen consistency with its values and enable employees to move smoothly between roles.
- No variation based on role or location (within France): All professional level roles in France are classified according to grades, and each grade has a corresponding pay band. In simple terms, whether you’re an engineer in Paris or an HR specialist in a regional office, if you’re in the same grade, you receive the same pay. (This setup is very unusual on the market.)
- Internal mobility is rewarded, even for lateral moves: How do you retain talent in a market where the best way to get a raise is to change companies? At Danone, every internal move is recognised, even when it’s not a promotion but ‘just’ a lateral shift. This might offer a response to the hyper-mobility of younger generations: various surveys show that Gen-Z and Millennial employees are much more likely to change jobs than older generations.
- The same team oversees all salary proposals: Margot’s team ensures consistency across offers and salary reviews. This centralised approach is designed to maximise fairness — and it also supports internal mobility, by making it easier for employees to move between departments.
What the law doesn’t say
At first glance, the approaches taken by Revolut and Danone might seem like opposites. After all, the two companies have very different values and worldviews. But they share one important trait: their compensation policies are closely aligned with their core beliefs. That makes them better prepared than most to meet the demands of upcoming pay transparency laws.
Across Europe, countries are beginning to implement the EU Pay Transparency Directive. While we don't know what the final text will look like in every country, we do know that companies will be required to make pay decisions that are objectively measurable and justifiable. Decisions that are defensible in court.
The law won’t dictate what those decisions should be or which criteria companies should use to make pay decisions. Instead, each company will be expected to remain consistent with its own internal logic and values.
This means that the new law won’t lead to uniformity. In fact, the opposite is true: the more companies develop clear, distinctive policies, the more they’ll stand out. A strong culture that drives some candidates away will attract those who truly align with the company’s values. Meanwhile, generic, bland statements will fail to make a mark.
Right now, nothing gives me more satisfaction than seeing companies that have the courage of their convictions — publicly sharing their sometimes divisive compensation choices. If you know of other examples, I’d love to hear about them.
And if you want to discuss concrete ways your company’s values can be translated into compensation policies, my inbox is always open.
