Hands down one of the most mis-managed things a business does, is how it budgets for the compensation cycle.
Here's what happens:
It comes up to review season.
No goals get set for the compensation review, simply "we need to do this or people will get upset/we've always done this"
Finance picks a number it can incorporate into forecasting (usually 2-4%)
The People team gets tasked with distributing it across employees.
What ends up happening?
That 2-4% budget ends up being used for:
Market adjustments
Merit increases
Promotions
Corrections that got held over until the comp review because it's "coming up soon anyway, let's just deal with it then"
And year on year, everyone leaves the cycle decidedly unhappy.
Employees feel like it was never enough and don't have any context about the payment
People team try to run a structured process that ultimately gets ignored or overridden
Finance get upset because all this negotiation happens afterwards from unhappy people, which means their budget was pointless anyway.
This is what happens when there is no owner. And guess what?
-> It's the People teams fault.
If this is you — don't wait around — this is 100% one of those beg for forgiveness vs ask for permission types of scenarios. And I assure you, the business will thank you for it later.
I'm not going to spend this post talking about how to budget for the comp review (follow up post if you're interested?), instead the point of this post is that: the People team needs to own the budgeting process for salaries!
It's the biggest cost on any business, and it's being ignored.
Rather than let it be a crappy process year in and year out, take ownership of it. The business will thank you, your people will thank you, and you'll be a commercial leader who takes charge of one of the most critical aspects of the company.
What's stopping you from taking this on?