Finance and HR should be collaborating on a regular basis on employee compensation programs and budget.

The largest expense in most organizations is for their employees’ cash compensation, benefits, and other rewards.

HR/Compensation regularly benchmark jobs to salary survey data and update the pay grade structures and incentive targets. Then they analyze employee total compensation to determine what budget may be needed for the next fiscal year.

And as the year progresses, Finance is looking at how expenses are running in relation to budget. They are providing advice to senior leaders about what their spending is creating in terms of value (revenue, profit, EBITDA, etc.). They are planning for upcoming years as well.

And as the year progresses, HR is working with senior leaders to ensure that employees are focused on the right work, are being productive, and are delivering results that are valuable.

To often HR and Finance aren’t talking to each other often throughout the year. The incentives and base salaries employees are receiving, and the design changes being considered are BIG expenses that need to be reviewed jointly.

“No surprises” should be the motto for both HR and Finance.

In the comments below, tell me what you are doing to ensure that HR/Compensation and Finance are collaborating on compensation related issues.

#compensation #rewards #finance #hr #humanresources #incentives #paygrades #totalcompensation #budget #basesalaries #salarysurveys