The managers believe the compensation strategy should be fully open to employees and managers. It sounds great till the moment, the Compensation and Benefits Manager opens the policy to the public audience in the organization. The rumors and endless discussions start and the employees ask for the salary review.
The compensation strategy is always about the grey zone of Human Resources. The compensation strategy is a part of the competitive advantage of the organization and it has to be precisely managed by a very limited group of employees who know all the details about its setting.
The compensation strategy is about the setting of the compensation components, including the base salary. The base salary is one of the most sensitive compensation components and the employees should not know the exact position of their base salary against the compensation policy and the external pay market.
The transparent and open compensation strategy is usually used by the aggressive organizations as they use the communication about their position on the pay market as the competitive advantage. As they need to build the corporate culture of their uniqueness they need to communicate their top position on the pay market.
The company living on the saturated market, which is focused on keeping its market share, cannot afford to have the exclusive compensation strategy. It has to be focused on keeping the market share and it has to manage personnel expenses strictly.
The employees cannot know the real position of their salary against the compensation strategy and the compensation policy as they would ask for the salary increase and the company would have no argument. The organization would refuse the salary increases and the employees would be de-motivated and confused.
Would you like to work for such a company?
