Pay Administration and Organizational Stewardship: The Balancing Act

The role of direct supervisors and managers in subordinate pay decisions seems to range widely from organization to organization.  In some places, the direct supervisor/manager has input but little real say into the pay decisions for direct reports; these are ultimately made by someone further up the ladder.  In other organizations, supervisors and managers bear the lion's share of responsibility for pay decisions; although there is a review and approval process in place, the recommendations of the direct superior carries a lot of(sometimes virtually all of) the weight in the final decision.

I had a great discussion at a client organization last week about preparing supervisors and managers for a more direct role in pay administration.  In part, this preparation must take the form of information sharing; helping supervisors and managers understand how the pay system works (philosophically as well as mechanically) and their respective responsibilities in making that happen.  But there is a larger and ultimately more important part of this preparation, and that involves positioning these supervisors and managers for the role of stewardship.

Making sound pay decisions involves more than just an understanding of the nuts and bolts of the compensation program, it involves the ability and willingness to carefully balance the needs of the employee with the needs of the organization.  It can be easy for supervisors and managers to see their role simply as advocates for their employees, especially when they have been promoted from the ranks of their subordinates and their sympathies still lie with this group.  But serving successfully in a management role, especially with respect to pay decisions, requires sound stewardship of organizational resources - human as well as financial.

And in the end, as we concluded in our discussion on this topic, preparation for the role of organizational steward requires more than just the information which is disseminated in a compensation training program.  It involves active mentoring, coaching and modeling by organization leaders - all of which require no small amount of discipline and commitment.

But organizational stewardship, and the balancing act that it entails, is a prerequisite for any level of success in implementing paying for performance.