A past manager's experience: the process is incompetent by design (and if you think about it, perhaps by necessity.) The decisions are made at VP or Director level, depending who holds the budget, and there is a requirement for minimum information going to lower levels of management, who may therefore have no knowledge or influence when the decision is made. They just get to implement it. It gets worse if managers and people below them are being LR'ed since detailed management information about staff capability and what they are doing is entirely missing from the decision.
LRs are defined by headcount, but Finance can be persuaded to interpret purely by budget equivalent. Senior, and older staff on higher pay are more likely to be on the list if the the manager is using a budget target (as long as the staff are below the budget-holder decision level and not one of their network).
Posted originally by @OtINtMr-5pgc.