In a centralized rewards approach, who makes the decisions?

In a centralized rewards approach, Human Resources is tasked with overseeing and making compensation decisions. This structure ensures that compensation strategies are consistent and aligned with the organization's overall goals and policies. Centralization allows for uniformity in how rewards are administered across the organization, which is crucial for maintaining equity and fairness among employees.

Human Resources utilizes data and research to set compensation standards, and they often implement policies that consider market rates, internal equity, and organizational strategy. By centralizing these decisions, HR can ensure that all employees are treated equally and that compensation aligns with organizational objectives, reducing the risk of discrepancies that can arise when individual managers or employees have the autonomy to decide on rewards.

This approach contrasts with decentralized methods where department managers or individual employees may have more control, which can lead to variations in compensation practices that don't necessarily align with company-wide objectives or standards.