Pay for Empire

Another type of pay structure that interferes with stewardship is commonly called the “Hay system.” It is a widely accepted method of using job descriptions—including the number of direct reports, type of budget responsibility, and levels of responsibility and decision-making authority—to make rational the different pay levels within an organization. For what it was asked to accomplish, this system has done an elegant and durable job. But we must question exactly what it was that we asked the Hay system to do: to pay people based on the size of their territory, number of subordinates, budget size, level of authority.

Soften it if you like, but these are measures of empire, not contribution to the organization. The effect is to ...

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