Compensation And Development: An Integrated System

Since I started, more than twenty years ago, my journey in the world of human resources, I have found myself faced with the question: "Do you deal with the soft side or the hard side of human resources management? Even looking around, in the way our department is organized in the most disparate companies, beyond the number of Competence Centers or the level of centralization of management responsibility, we tend to find dualism: on the one hand, the hard functions, i.e., labor cost, compensation, administration, and on the other, the soft aspects, recruiting, development, and training in the first place.

Surely the specialized skills required are distinct, but are we so sure that those who define rewarding processes and policies must be distinct from those who design processes and policies of development and growth in the organization?

More and more, I think it is essential to keep in mind that doing human resources means putting the person at the center. At the heart of an integrated system of policies, processes, and tools that share the common mission of "creating the conditions in which each person wants and can give his or her best". This means that, regardless of what field of specialization I have, first of all, I share this superordinate mission and  feel part of a system that measures its effectiveness through the engagement of people, the level of organizational learning, and the retention rate.

In addition to this, experience has taught me that systemic strength increases when the company defines a central competence center that puts development and compensation under the same umbrella. In particular, a competence center that designs, develops, and implements processes and tools for organizational clarity, skill development, and recognition of results. Organization, development, and compensation are different sides, different colors of a prism that illuminates a person's professional path.

The keywords to make it happen are:

 Transparency: every policy, process, or decision in each of the three areas must be based on clear and acceptable criteria. This does not mean not guaranteeing confidentiality: the content of each compensation or development action is confidential, but the system is shared. People know the criteria behind their decisions.

Coherence: Every policy, process, or decision in each of the three areas must be designed with impacts in other areas and possible synergies in mind. This does not mean that the decision-making autonomy and specificity of each discipline are lost, but that the purpose is not the optimal solution within the single discipline, but rather the best possible solution for the well-being and effectiveness of people.

Fairness: Every policy, process, or decision in each of the three areas must be inspired by two fundamental principles: internal equity and meritocracy. We should keep in mind that fairness doesn’t mean treating everyone the same way, but using the same criteria. The differentiation among people based on specific contributions, needs, and competencies is the basis for a meritocratic approach.

At the very core of my idea of human resources is the awareness that a person is one, complete, and complex. We cannot separate the different aspects; we should adopt a holistic approach to enhance every potential, respond to every need, and sustain every effort toward the maximization of individual and company success.