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Dear Workforce Our CFO Is Granting Unequal Pay and Forgoing Performance Reviews. How Do I Persuade Him to Rethink This Danger?

September 7, 2011

Dear Stymied:

It is certainly true that salary administration is included in the HR function in most organizations. However, I have a feeling your boss is not going to be convinced by such an argument. Since he is a CFO, I think your best bet is to make a case for how HR can help manage cost by participating in a very direct way in salary administration. There are two arguments you can use to do this.

First, to effectively manage its cost, the organization must have a good grasp of marketplace compensation data. Otherwise, you could easily overpay on salaries and as a result take much-needed funds away from other areas. The skills required to analyze this reside in the HR function. The HR professional either possesses the ability to conduct the analysis or will be in a position to oversee a consultant who can conduct it. In either case, the HR function can play an important role in ensuring that there is some objective basis for the salaries the organization pays.

The second approach involves internal equity. Without having an objective basis for its compensation structure, it is easy for an organization to get into legal trouble. Without guidelines based on objective data, organizations often slip into the practice of offering salaries based on a host of subjective factors driven by managerial preferences. It appears that something like this is occurring at your organization now. This is dangerous and can lead to situations where charges of unfairness or even discrimination can be leveled at the organization. The resulting fallout can be very expensive. The HR literature is full of examples of organizations that went down this path and lived to regret it.

Your challenge will be to use these arguments to prepare a good case, pick the right time, and be convincing. Not knowing your boss, of course, it is difficult for me to provide a more specific plan for a successful discussion. The most important point: You must approach this as a business issue. In the end, it doesn't matter whether other organizations involve HR in salary administration or not. What does matter is that there is a good business reason to do so. This is the case you have to make. Good luck.

SOURCE: John White, J.D. White & Associates, McLean, Virginia, April 28, 2005

LEARN MORE: Please read Dear Workforce: How Do I Get Managers to Embrace Performance Evaluations?

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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