Global mindset & Compensation

by Marylou Ponzi Kay

Most companies have a hard time dealing with global compensation issues. It’s not that there aren’t lots of surveys out there: Mercer, Towers Watson, Culpepper, ERI, and then all kinds of private surveys, or surveys from companies that conduct surveys in remote areas of Africa and Asia. But many companies are largely unprepared for the complexity they will face when setting up operations in countries around the world. So what do you do when you have a new operation in Russia and your company does not yet have a license?

Do you take the employee over to an ATM and give them some cash? Surprisingly, that’s what one business manager resorted to, totally wrong solution. When you do pay them, it’s usually by month, but how many months per year? Some countries have 12, others 13, still others 14 months of pay, mandated by the government. And what about all those extras? I’m not talking expense accounts or company cars, but food coupons or mandated Christmas bonuses like 60% of Latin America offers employees. Of course there are also taxation issues. Some countries require severance for employees and contractors who leave voluntarily. You can easily wind up on the wrong end of the law if you don’t pay attention to the local legislations. These lessons can be expensive, or worse, they can paralyze your business operations. The first thing you need is an open mind: listen, pay attention to detail, get all of the facts from several sources. You can use the top consulting firms but they can be costly. Sometimes a firm with expertise can be invaluable in helping to set up the appropriate infrastructure for a new operation. You also need to get acquainted with local chambers commerce and business associations. The design of any pay plan has to be linked to the strategy of the business, the nature of the local operation and local regulations and customs. When you create a trust relationship with these parties, many of the troublesome projects become yesterday’s problems. In order to foster trust, you must enter without pre-conceived notions, without the typical structure you would think to impose, rather you must go with what works locally and then tie that back into your corporate practices later. Resolving issues in this way is shorter and more efficient. You can put in a grading system a lot faster than you would have thought. Implementing is not easy, but if you can anticipate the needs of your local colleagues, how much faster can you progress when you hear their concerns, empathize with their plight. It softens that resistance that you might encounter. From there, it’s a process of getting to know and trust, that can take some time, but it will lead to greater cooperation on both sides, and that will get the job done. Remember that unspoken resistance can kill a program faster than any management disapproval. You really don’t want them saying ‘yes’ when they mean ‘no way!’ that hurts both of you. Get next to them, feel their issues, and show them that you’re trying to make a difference. When you come out there with your vulnerable honesty, you’d be surprised how engaged they become. This is the methodology of getting things accomplished in a global setting, a far cry from putting in the standard corporate ‘program’. One size doesn’t fit all as we have learned over the years, and a little thinking and planning can ensure that a project does come to fruition.

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