Which department typically has a narrow view of compensation?

Operating departments typically have a narrow view of compensation because they focus primarily on the day-to-day functions and specific needs of their teams. Their perspective is often limited to how compensation affects their immediate workforce, performance, and output. This viewpoint can result in a focus on short-term goals and the specific roles within their department rather than a comprehensive understanding of company-wide compensation strategies, equity, and market competitiveness.

In contrast, departments like Finance and Human Resources take a broader perspective. The Finance department is generally concerned with the overall budget implications and the long-term financial sustainability of compensation practices. Legal has to consider compliance with regulations and laws affecting employee compensation, while Human Resources is involved in strategic planning and aligning compensation with organizational goals. Each of these departments examines compensation from multi-faceted viewpoints, unlike operating departments that may zero in on their singular departmental needs.