5 Real-World Compensation Policy Examples and Key Takeaways for You

Compensation is one of the most sensitive and strategic aspects of an organization’s operations. A strong compensation policy does much more than outline how much people get paid; it also sets expectations, drives equity, and helps organizations stay competitive in the labor market.

For many HR and finance teams, the question isn’t why to have a compensation policy—it’s what to include and how to structure it. Should raises be tied to performance, tenure, or retention risk? What rules govern salary adjustments across geographies or job levels? How should you handle volunteer roles, contract work, or temporary assignments?

The most effective policies answer these compensation planning questions with clarity and consistency. To explore what this looks like in practice, we’ve analyzed five real-world compensation policy examples from global institutions, public universities, and lean nonprofits. Together, they offer practical insights for organizations designing or refining their own compensation strategy.

UNICEF: Compensation built with high-risk accommodations

The United Nations Children’s Fund (UNICEF) is a UN Agency with a compensation philosophy that clearly matches its cause:

Unified compensation structure

UNICEF doesn’t treat compensation as a flat, global system. It adapts pay, benefits, and support mechanisms to the realities of different job types and locations, all within a unified structure. The result is a layered, flexible model prioritizing fairness, safety, and retention in some of the world’s most complex environments.

UNICEF uses a tiered staffing model:

• International Professional (IP): Globally recruited roles with relocation support
• National Officer (NO): Locally recruited professionals with national responsibilities
• General Service (GS): Support and administrative roles recruited locally

Each category has its own compensation structure, tailored to duty station conditions and job classification.

For IP staff, salaries are based on a UN-wide scale. Still, total compensation is adjusted for local cost of living, family size, and hardship level. NO and GS staff are paid according to localized surveys of prevailing wages, reviewed periodically to keep pace with economic conditions.

High-risk accommodations

UNICEF’s compensation design allows the agency to remain competitive in developed and conflict-affected regions while maintaining parity within each staff tier. Staff assigned to high-risk or emergency duty stations may receive:

• Hardship allowances
• Hazard pay
• Rest and recuperation breaks
• Non-family post bonuses

Wellbeing as a compensation component

Wellbeing isn’t an optional benefit; instead, the agency integrates it into the employee experience by stating, “Our staff wellbeing program is focused on the psychosocial wellbeing of all staff.”

This is particularly important given that many UNICEF employees work in emotionally demanding settings. Support includes:

• Onsite staff counselors and peer support volunteers
• Global access to mental health resources, including Headspace
• Evidence-based resilience training to prevent burnout and manage trauma
• Flexible working policies embedded across teams and contract types

UNICEF’s policy shows how a large, distributed organization can structure pay equitably while remaining responsive to local realities. Combining rigorous compensation benchmarking with a strong focus on wellbeing and flexibility allows the organization to support its workforce in stable and crisis contexts.

Footprint to Freedom: Compensation rooted in mission and legal clarity

Footprint to Freedom is a Netherlands-based nonprofit working to end human trafficking. Survivor-led and grassroots in nature, the organization has a compensation policy that reflects two core priorities: strict legal compliance and ensuring that people—especially those with lived experience—can contribute meaningfully without financial hardship. Its policy states:

Reimbursement for board service

Although board roles are unpaid, the policy includes provisions to reimburse them for:

• Travel and accommodation
• Supplies or meeting-related costs
• Other necessary, pre-approved expenses

Reimbursements must be reasonable and documented. The goal is to support participation without violating ANBI regulations or introducing informal compensation.

Paid staff within legal and financial limits

While governance roles are unpaid, salaried staff receive compensation aligned with sector standards. Pay is benchmarked against comparable roles in the nonprofit and advocacy space, with all employment governed by Dutch labor law. This includes provisions for:

• Paid annual leave
• Sick leave
• Pension contributions
• Workplace protections

Performance reviews inform any adjustments to compensation, but increases are only considered if the organization is financially able to support them.

Volunteers receive stipends

Footprint to Freedom allows small, tax-exempt stipends for volunteers outside the board, as permitted under Dutch law. These are explicitly framed as cost offsets, not wages. The goal is to make participation possible for a broader range of contributors without undermining the organization’s legal or financial integrity. Stipends must:

• Fall within the national tax-free limits
• Be pre-approved
• Include proof of participation or expense

Footprint to Freedom’s policy is compact but rigorous. It doesn’t rely on generous budgets or complex HR systems but sets clear rules around who is paid, how, and why. This structure offers a grounded and replicable model for ethical compensation for small, mission-driven organizations, particularly those led by survivors or operating in sensitive areas.

Georgetown University: Structured flexibility for salary adjustments and temporary pay

Georgetown University’s compensation policy outlines how the institution manages salary changes outside of routine merit increases. It covers acting pay, additional assignments, equity adjustments, and retention-based raises, each governed by formal limits and approval requirements to maintain consistency and fairness across departments.

Acting pay for temporary higher-grade assignments

When an employee temporarily fills a vacant position at a higher salary grade, Georgetown allows for a short-term increase in direct compensation. This is capped but designed to recognize the employees’ additional responsibilities.

Conditions include:

• The employee must meet the qualifications for the higher-grade role
• The assignment must be temporary (not exceeding 12 months)
• Prior approval from the department’s Vice President is required

This gives managers a controlled way to recognize stopgap leadership or coverage while maintaining salary band integrity.

Targeted salary adjustments for equity, skills, or retention

For employees who are not changing jobs or classifications, the university offers narrowly defined pathways to increase pay up to 10% of base salary, as justified by business need.

Approved reasons include:

• Internal equity (e.g., correcting salary gaps within a department)
• Acquisition of new skills or increased responsibility
• Retention, especially in cases of external job offers

Raises above 10% require a formal justification and approval from both the Vice President and Human Resources. In all cases, the new salary must remain within the assigned salary grade range. Some additional requirements include:

• Employees must have held their position for at least one year
• Must have a performance rating of at least “Successful” in their most recent review
• Georgetown will only grant one such adjustment per 12-month period
• Increases greater than 10% may be considered only in extraordinary circumstances, such as a documented competing offer.

Georgetown’s policy reflects an effort to balance flexibility with standardization. Managers can recommend salary changes in specific circumstances. However, strict caps, review timelines, and performance thresholds are necessary to minimize arbitrary decision-making and maintain pay equity across the institution.

UNDP: Compensation framework for global mobility and local relevance

The United Nations Development Programme (UNDP) operates in more than 170 countries, and its compensation policy is built to support that scale. Rather than using a single global model, UNDP aligns salary and benefits with the contract type, duty station, and recruitment category, creating a flexible system that supports both international mobility and local competitiveness.

Compensation tailored to role and recruitment context

UNDP’s staff are hired under several categories, each with its own pay structure:

• International Professionals and Directors are recruited globally and compensated based on a UN-wide scale, with adjustments for dependents and the cost of living at the assigned duty station
• National Officers and General Service staff, on the other hand, are recruited locally and paid according to a salary scale based on prevailing local market conditions
• Personnel Services Agreements (PSAs) may fall under either international or local terms, depending on how the role is filled

This model allows the UNDP to remain consistent with the standards of the UN system while responding to local labor markets and economic conditions. Salary scales for locally recruited staff are reviewed periodically to reflect the “best prevailing conditions in the locality of employment,” ensuring compensation remains fair and competitive.

A broader view of staff wellbeing

UNDP’s compensation approach extends beyond salary. As its policy states, “While you are taking care of building a fairer and more equitable world for everyone, we make it our mission to take care of you.”

In practice, the organization integrates a wide range of benefits, such as financial, logistical, and personal, to reflect the realities of life and work in international development. Staff may be eligible for:

• Relocation and settling-in support, including travel, shipping, and visa arrangements
• Hardship and non-family post allowances for high-risk duty stations
• Rental subsidies where housing costs exceed a particular share of net salary
• Medical insurance and automatic enrollment in the UN Joint Staff Pension Fund (for fixed-term or qualifying temporary contracts)

As a bonus, UNDP’s policies include generous leave entitlements, including 18 to 30 days of annual leave, home leave for internationally recruited staff, and 10 UN-recognized holidays, which vary by location. Flexible work arrangements, including remote work, staggered hours, and part-time options, are also embedded into the organizational culture.

Indiana University: Balancing market competitiveness with internal equity

Indiana University ’s compensation program for non-exempt staff represented by CWA, Local 4818, is built on the principles of internal consistency, market competitiveness, and legal compliance. The policy outlines a structured, formalized system for salary administration, supported by regular market data analysis and job evaluation. This statement speaks to the policy’s core:

Salary structures informed by internal and external data

IU maintains a defined salary structure composed of grades, each with a minimum, midpoint, and maximum salary. These structures reflect competitive labor markets and compensate jobs with similar responsibilities equitably.

Jobs are placed within this structure based on an evaluation process that determines their internal value. The policy promises “a formal methodology for determining the relative internal value of jobs will be developed and consistently applied to all jobs.”

Market alignment is also maintained with the help of regular benchmarking. To achieve this, IU’s HR department gathers salary survey data for comparable roles and uses that data to update salary ranges as needed. This is a regular, scheduled activity:

Compensation decisions guided by policy and review

Salary increases will always comply with IU’s salary administration policies based on job-related factors such as job content (not title), performance, and documented justification.

The policy also reinforces compliance with federal and state laws and prohibits discrimination in compensation based on protected characteristics. The policy states it will provide:

A system integrated with the broader HR strategy

Indiana University’s compensation management program works in concert with other human resource systems and functions. In particular, the policy highlights alignment with position management, performance management, employment and selection, training and development, grievance resolution, and benefits administration. Overall, the educational setting creates a cohesive framework for managing the staff experience.

5 best practices to extract from these real-world examples

Although each of these compensation policy examples varies widely in scale, structure, and purpose, several shared practices emerge. If you’re trying to decide what to include in your own compensation policy, work through the following best practices:

1. Define the scope of your compensation policy

A well-structured compensation policy clearly outlines which pay practices it governs, such as base salary, bonuses, stipends, and temporary adjustments, and to whom it applies.

Distinguishing between full-time employees, contractors, board members, and volunteers also prevents confusion and ensures consistent application across the organization.

2. Establish procedures for salary changes

Policies that govern raises, whether merit-based, equity-driven, or tied to retention, are backed by specific caps, approval workflows, and performance requirements.

To ensure consistency in your organization, define how raises should be proposed, evaluated, and approved, then connect increases to documented criteria. Your managers will thank you for providing a structure to follow when advocating for exceptions.

3. Build in review and benchmarking cycles

Markets shift, so compensation policies can’t afford to sit still if they want to keep pay competitive and attractive to talent. Follow in the footsteps of UNDP and IU’s robust policies and include mechanisms for annual or periodic reviews of salary structures, often tied to external benchmarking.

4. Make room for global or role-based flexibility

UNICEF and UNDP demonstrate how to manage compensation across diverse geographies and employment types without sacrificing coherence. If you operate across regions or hire different types of workers, your policy should account for that from the start. To accommodate local context, use a unified framework, then layer in localized details like region-specific salary bands, tiered role structures, or variable benefits.

5. Tie compensation to broader people strategy

A compensation policy works best when part of a larger, well-aligned employee lifecycle strategy. Indiana University’s policy shows how compensation lives alongside other core HR systems, including performance management, job classification, and benefits.

Achieve similar alignment by linking pay decisions to hiring goals and reinforcing how you evaluate and reward talent.

Manage global compensation with Deel

Creating a compensation policy is a strong start, but Deel helps you operationalize it across every market you hire in. Deel Compensation is an all-in-one solution built to manage pay transparency, equity, and performance-based rewards at scale.

With Deel, you can:

• Run merit and compensation review cycles with built-in workflows
• Manage and update compensation bands across roles and regions
• Enable pay transparency where and when it matters
• Access real-time salary benchmarks through the Deel Salary Insights tool
• Provide workers with a personalized total rewards portal
• Link pay to performance with our complementary talent management module, Deel Engage

Ready to explore how Deel can support your global compensation strategy? Book a free platform demo today.