Question

CASE 11.1 : Compensation problems with a global workforce ( global)

1. What would you do if you were the IHR manager ?

2. What kind of global compensation policy would deal effectively with this sort of problem ?

source: adapted from Crandall, L. P. and Phelps, M. I. (1991), Pay for a global work force, Personel Journal, February, 28, 30

Answer 1

1) Role of IHR in Global compensation problem :-

a. It is true that global companies has many complexity and diversity in it, and with different countries comes different currencies. This can create problem while giving compensation to the global employees.

b. Ihr managers also needs to think about the reward system as a whole.

c. Balancing between the domestic and global is quite a difficult task for the IHR manages. Also maintaining a bonus plan and promote the employees on the basis of merit is difficult.

d. Managing compensation without a proper budget is useless. Also the manager needs to think of the budget according to the region and it's people.

Effective global compensation policy :-

a. Providing the traditional compensation the employees can affect the budget, instead the company can make a policy of earning rewards by their merits.

b. Performance basis pay can also solve the global compensation problem.

c. By simply following the global compensation laws, an international company can cope up with the problem.

d. Organization can also adopt the line of sight policy where the Ihr managers compares the reward received by the employees and their given performance to the organization.

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