‘Grand challenge’ or ‘not an issue’? The discourses on income inequality of compensation managers and consultants

Abstract

Within the broader debate on the increase of labor income inequality, social concerns have growingly focused on organizational practices. Among these, market-oriented compensation practices, with their extensive pay dispersion, are deemed crucial ‘inequality-generators’. Based on 49 interviews with Italian compensation managers and consultants, this article explores whether, in their talk, these actors align with (or detach from) inequality-increasing compensation practices, and which discourses they employ to justify their posture. By resorting to the discourses on meritocracy and market, the respondents fully supported dispersed market-based compensation structures, thus endorsing a motivation- (rather than legitimacy-) centered approach informed by a shareholder (rather than a stakeholder) perspective. In countering possible criticisms, they advanced two main discursive responses: ‘transparent communication’, i.e. communication intended to convince critics about the benefits of merit-based and market-based pay dispersion; and ‘populism’, i.e. a term used to discredit those critics that question any type of pay dispersion. Assuming a discursive approach, the paper adds an HRM perspective to the growing debate on the role of organizations in producing and re-producing income inequality, while critically showing that compensation managers and consultants fail as a resource for inequality reduction.

Keywords:

• Income inequality
• compensation management
• reward management
• discourse
• HRM profession
• legitimacy of HRM

Disclosure statement

No potential conflict of interest was reported by the authors.