Compensation
twinmaker305The current state of globalization has resulted in a high level of connectivity between the economies of various parts of the world. U.S. employers will increasingly conduct business with entities in a variety of other countries as former underdeveloped parts of the world experience tremendous economic, trade, and standard-of-living growth. In addition, the move from traditional manufacturing to knowledge- and service-based employment also means that jobs as well as markets are more likely to be dispersed geographically. As the need for employers to interact globally increases, HR management professionals are going to have increased opportunities to develop compensation and benefits programs for U.S. employees in foreign assignments, as well as for local employees in foreign offices of the parent company.
It is essential that compensation professionals know the basic legal employment context and the minimum statutory employment standards of the country where they propose to do business. After that, compensation professionals may consider the norms for competitive pay and benefits needed to attract the desired talent.
In this module, we will provide a glimpse of the wide variation in compensation and benefits practices across several regions of the world. We will review governmental structure, norms, and historical events that help shed light on pay and benefits. For each country, we will examine statutory minimum wage rates. Next, we will consider such basic benefits issues as paid time off, protection programs (including retirement and health care), and stand-out benefits in particular regions. We will note where such protection programs as retirement and health care are required by the government or offered at the discretion of the employer. It is important to note that many other governments do not regularly assess pay levels in their economies, which stands in stark contrast to the wealth of data provided regularly on U.S. markets by the U.S. Bureau of Labor Statistics. The U.S. Bureau of Labor Statistics regularly compares the hourly compensation costs in several countries (U.S. Department of Labor, Bureau of Labor Statistics, 2010; International Labour Organization, 2013).
References
International Labour Organization. (2013). ILO database on conditions of work and employment laws. Retrieved from http://ilo.org/dyn/travail
Martocchio, J. L. (2015). Strategic compensation: A human resource management approach (8th ed.). Upper Saddle River, NJ: Prentice Hall.
U.S. Department of Labor, Bureau of Labor Statistics. (2010). USDL: 10-1173. Retrieved from www.bls.gov