When talking with leaders about their compensation programs, I will often ask them what they see as the program's biggest strengths and weaknesses. Often enough, particularly in reference to base salary programs, they will mention the program's flexibility as one of its strengths.
More than a few of them will note, however, that this flexibility can serve as a double-edged sword.
By flexibility, they typically mean some level of managerial discretion. They will say that while they appreciate the program's structure and rigor, they also appreciate that there is some room for maneuvering, for "tweaking", in order to respond to specific circumstances and needs. Effective managers, who have the overall organization's best interests at heart (versus merely their own), use this flexibility to ensure that the program truly works as intended. Less-than-effective managers ... not so much.
Does our increasing attention to and focus on equity change the way we look at flexibility in pay decisions? Should it?
At a minimum, I think it is wise to keep a close eye on the role that flexibility plays in the administration of our wage and salary programs. When we give managers the space they need to do the right things, have we put the conditions and boundaries in place to ensure that outcome?
Creative Commons Image: Caution by Focal Foto
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