Who Really Decides Your Pay: HR Managers or Hiring Managers? Let's Discuss!

Do HR Managers Make Compensation Decisions or Hiring Managers, and How?

HR managers typically handle compensation decisions within an organization. They are responsible for determining salary ranges, bonuses, and other forms of employee compensation based on factors such as market trends, employee performance, and company budget. HR managers collaborate with hiring managers to ensure that job offers are competitive and align with the organization's compensation strategy. Hiring managers, on the other hand, focus on selecting and recruiting candidates for specific roles, working closely with HR to finalize compensation details as part of the job offer process.

Compensation decisions are a financial aspect that needs to be worked out in concurrence and approval of senior management through a procurement procedure. However, if a defined policy is in place towards the compensation decision-making, it will also assign the powers to the specific authority, which may be the HR manager or hiring manager.

Compensation decision is a financial aspect, and that is right. Thus, in a huge international organization, I don't think that finance will do it. I think line managers will propose it in consultation with the HR manager. Then they will share it with finance to check against the estimated budget. If managers make compensation and promotion decisions without consulting with HR, that will be structured unfairly.

Regards.

Yes, but it's the other way around. Either in the form of a policy in a big organization, the top management will empower the finance/procurement department to allocate for overall compensation on hiring, etc. Or line managers or HR managers need to send an appropriate and justified requirement with compensation details for approval from management. Thus, the management will be able to make a decision on evaluating the CTC as per the allocation of the budget against the talent to be hired. This may be true for hiring senior-level persons.

However, the compensation policy for lower category/junior level employees may assign the power to decide the compensation either to line managers, hiring managers, HR managers, or a combination in mutual consultation. Please correct me if I am wrong, as I am of the opinion that unless there is a clear-cut policy on these issues, one cannot simply make decisions on such financial matters.