Mine (about 4000 records) are broadly organised:
- Period (Medieval, Renaissance, Baroque, Classical, Romantic, 'Modern'/20c)
- Within period - Composer (roughly in date order within period)
- Within composer - Genre (solo instrumental, chamber, vocal, choral, symphonic + concerto)
Mono records are maybe 15-20% of the collection and organised separately the same way. I don't listen to that much romantic or 20th century music so those are in another room along with whatever rock and pop I own and also duplicate copies (mainly of favourites, held for safety reasons) plus a lot of box sets acquired for completist reasons but probably not listened to as much as they should be.
My jazz listening has increased so a lot of my jazz is in the main living room. I have about 2000 CDs but never been disciplined enough to do the same with them, they are a bit haphazard but roughly grouped in a sort of mish-mash of period and genre (Lieder, Renaissance, baroque, piano music).
The rationale is essentially that when I want to listen to music it's generally a category that comes into my head (renaissance lute/instrumental, some Lieder, a Bach cantata) so my hands are drawn to a general area ... the records themselves then jump out at me, demanding to be listened to.