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Insofar as a company has a compensation policy aside from “pay the executives a lot and everyone else not as much,” why would such a policy be considered the domain of HR?
Let me explain this one clearly and quickly.
Article 1: Executives tend not to care about HR. They do care about money. Compensation policy is inherently a money issue, as salaries are typically your biggest expense going out. So why would a money issue (we care!) be the domain of a “be seen and not heard from” department?
Article 2: Here’s a Wharton interview with a lady who has written three scholarly papers on compensation (she probably knows what she’s talking about). The money quote is:
If there’s one takeaway we want from this research, it’s for people to recognize that these pay policies are not an HR policy. It’s really a strategic decision that firms need to make. As much as firms want to keep their pay under wraps, in today’s day and age, that’s increasingly unrealistic. It was unrealistic 10, 20, 30 years ago as well. And it does have major consequences for what firms can do and how they can compete. That is very important to account for.
So someone who’s written three major papers on salary? She believes this is the “one takeaway.”
