How Do You Allocate Salary Budgets Across Departments? Seeking Insights and Ideas

Hello friends! I am trying to find out what the ideal percentage of salaries for each department is. I mean, from the total salary budget, say for Rs.100, what should be the ideal percentage for each department's salary? As per my knowledge and understanding, a major chunk of the total salary budget should go to the Sales department and other revenue-generating departments. But is there any blueprint about it or any concept/idea that can help us identify this kind of budget allocation?

Kindly advise.

Thanks,
Ranjana

I have never heard of any rules that prescribe how salary is distributed in an organization. Every organization is different and builds its business according to what they are trying to achieve.

What happens if there are more HR people than Sales people?

In your organization, HR might get the highest proportion of the salary budget. In my view, the area that is likely to get the highest proportion of the budget would be management, as their salaries are much higher.

Theory vs. Reality in Salary Distribution

It may be an admirable theory to assign the highest proportion of the salary budget to revenue-earning departments, but I have some doubts as to whether it would work in the real world. In my long experience, many organizations seem to be top-heavy with administration people, e.g., HR, Finance, and other assorted pen pushers and paper shufflers, etc.

How can you just allocate an 'ideal' salary to each department? This is ridiculous!

Budget Allocation Concerns
The budget provides for the cost of each function and department and for each element of cost. How did you make a total company-level budget without departmental budgets?

Mr. Banerjee, please read the query carefully. It's not about the ideal salary but the ideal percentage. The question itself inquires if such a concept exists (nowhere have I mentioned that such a thing exists). Just a piece of advice: if you find a post ridiculous or funny, please don't waste your time on it. Instead, go ahead and comment on another query that may catch your attention.

Thanks!

My question is the same. How did you get the idea that there is an ideal percentage of salary across divisions for any industry? Incidentally, can you determine an ideal percentage without an ideal salary? I am also wondering if you are aware of how budgets are even made.

Budget Considerations
Will you make a budget without knowing the salary and number of people in a department?

You have put a query on a public forum, and I am a member of the forum. If I find a particular concept ridiculous, then yes, I will comment on it. You can't expect that on an open forum you will have a selective list of people who will respond in the manner you wish.

Ranjana Lal Sharma

Your comment on Mr. Banerjee's post borders on being inappropriate. Please maintain a respectful attitude when replying to posts, even those you do not agree with.

We can have a "robust" discussion about various HR topics, but at all times, this discussion must be respectful.

Focus on Salary Discussion
In this thread, let us confine our remarks solely to the points raised regarding salary.

Rajana, can you tell us why or how you came to the understanding suggesting a nexus between salary allocation and revenue-earning departments? I am not questioning the theory as I do see some merit in it. The idea is akin to another axiom, i.e., spending money on the things that generate income for a business and cutting back on things that drain resources.

I've not been able to find anything on this subject, but there is a wealth of material online regarding salary, e.g. https://www.google.com/search?q=shou...ng+departments