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HR doesn't make that decision, the upper management does.

lumost 5y ago
not really, the basic mechanics for most companies are 1) The CEO was consulted on a particular comp plan for the new year with budgets for promotions/new hires/retention etc. 2) The CEO was almost certainly given a "generic" plan that the investors of the company + whatever data the HR team has indicates is warranted. 3) The CEO has to decide between going to bat for the employees with the investors (his boss), pushing back on HR with no data, or just accepting it. Unsurprisingly the CEO always takes option 3 - everyone is breathing their own exhaust on what a good raise for the year is and the investors will often present a generic comp plan. You'll usually hear things like "we pay the median" or similar to justify this, but the root cause is always the same, bad data driving bad decisions. Also note that generally these comp plans are made regardless of role. Engineering being more cyclical tends to have rapidly increasing comp on the up-cycle and struggles to match this model. On the flip side we all may be great full that HR doesn't mark comp to market.
- nojito 5y ago
  The CEO has literally no say in creating Capital Allocations. That's what the CFO is there for.
  - lumost 5y ago
    This will vary from company to company - In some companies the CFO was selected by the board to keep finances in order as the CEO is not trusted, in others the CEO will defer this to the CFO by choice or through collaboration, and some CFO's will probably do not much more than do what the CEO tells them to.
    - nojito 5y ago
      Absolute nonsense. CEOs are facilitators. Maybe this is a case of startup culture seeping in but there is always a firewall between the CEO and the rest of the c suite.
  - pc86 5y ago
    Who does the CFO report to if not the CEO?
    - nojito 5y ago
      It’s mind boggling how many people don’t understand what a CEO actually does.
      - lumost 5y ago
        Why do you believe there is only one way to structure a c suite?

not really, the basic mechanics for most companies are 1) The CEO was consulted on a particular comp plan for the new year with budgets for promotions/new hires/retention etc. 2) The CEO was almost certainly given a "generic" plan that the investors of the company + whatever data the HR team has indicates is warranted. 3) The CEO has to decide between going to bat for the employees with the investors (his boss), pushing back on HR with no data, or just accepting it. Unsurprisingly the CEO always takes option 3 - everyone is breathing their own exhaust on what a good raise for the year is and the investors will often present a generic comp plan. You'll usually hear things like "we pay the median" or similar to justify this, but the root cause is always the same, bad data driving bad decisions. Also note that generally these comp plans are made regardless of role. Engineering being more cyclical tends to have rapidly increasing comp on the up-cycle and struggles to match this model. On the flip side we all may be great full that HR doesn't mark comp to market.

nojito 5y ago
The CEO has literally no say in creating Capital Allocations. That's what the CFO is there for.
- lumost 5y ago
  This will vary from company to company - In some companies the CFO was selected by the board to keep finances in order as the CEO is not trusted, in others the CEO will defer this to the CFO by choice or through collaboration, and some CFO's will probably do not much more than do what the CEO tells them to.
  - nojito 5y ago
    Absolute nonsense. CEOs are facilitators. Maybe this is a case of startup culture seeping in but there is always a firewall between the CEO and the rest of the c suite.
- pc86 5y ago
  Who does the CFO report to if not the CEO?
  - nojito 5y ago
    It’s mind boggling how many people don’t understand what a CEO actually does.
    - lumost 5y ago
      Why do you believe there is only one way to structure a c suite?