Multiple Country Compensation Programs

Local National Total Rewards

In this section of the course, we'll discuss various forms of compensation and policies specific to local nationals:

• Compensation structures
• Base Salary
• Bonuses
• Equity plans
• Benefits
• Work Schedules
• Termination

Compensation structures

Compensation structures differ from country to country. You may be tempted to take a currently used salary structure and apply it to a different country such as Canada, but this will produce ineffective results. Each country has different market values of jobs due to different currencies, tax systems, laws, social security programs, benefits, and hierarchy of jobs.

As you create salary structures in multiple countries, it is important to:

• Develop "Global" salary grades or bands for consistency throughout your business
• Use "Globally" managed job codes to ensure your compensation plan and jobs are accurately reported through your Human Resources system
• Use "Local" market data to ensure local market competitiveness
• Develop "Local" salary ranges or bands within your headquarters' grading structure
• Finally, ensure "Local" legal compliance.

Impact of the local labor market on global talent. The supply and demand for labor affects pay levels and can upset the established compensation structure. In many less developed countries, a high supply of low-skilled employees drops pay below poverty levels. This socio-economic manifestation is generally referred to as the “race to the bottom” where labor regulations are pro-employer to encourage foreign investments. Conversely, in these countries, the available supply of professionals and top-level managers is so low that pay levels in these categories can exceed those of the United States.