HRM textbook

CHAPTER 17 MANAGING GLOBAL HUMAN RESOURCES 593
decisions on credible and defendable market data ? 103 Steps to follow in creating a
global pay system include these: 104
Step 1: Set strategy. First, formulate strategic goals for the next five years, for
instance, in terms of improving productivity or boosting market share.
Step 2: Identify crucial executive behaviors. Next, identify the actionable behaviors
you expect your executives to exhibit in order to pursue these strategic goals.
Step 3: Global philosophy framework. Next, step back and ask how you want each
pay component to contribute to prompting those executive actions and
achieving the company s strategic goals.
Step 4: Identify gaps. Next, review your existing rewards programs around the
world. The question is, To what extent do our pay plans around the world
support our strategic aims?
Step 5: Systematize pay systems. Next, create more consistent performance assessment
practices, and establish consistent job requirements and performance
expectations for similar jobs worldwide.
Step 6: Adapt pay policies. Finally, review your global pay policies (for setting
salary levels, incentives, and so forth). Conduct surveys and analyses to
assess local pay practices. Then, fine-tune the firm s global pay policies
so they make sense for each location.
Labor Relations Abroad
Firms opening subsidiaries abroad face substantial differences in labor relations practices
among countries and regions. This is important, because while union membership is
dropping in the United States, it is still relatively high abroad, and unions abroad thus
tend to be more influential. Walmart, for instance, has successfully neutralized attempts
to organize its U.S. employees, but had to accept unions in many of its stores in China.
As an example, unions in Europe are influential and labor management
bargaining and relations reflect this fact. In general, four issues characterize European
labor relations:
* Centralization. Collective bargaining in Western Europe tends to be industrywide,
whereas in the United States it generally occurs at the enterprise or plant
level.
* Employer organization. Due to the prevalence of industry-wide bargaining
in Europe, employers tend to bargain via employer associations, rather than as
individual employers.
* Union recognition. Union recognition is less formal than in the United States.
For example, even if a union represents 80% of an employer s workers, another
union can try to organize the other 20%.
* Content and scope of bargaining. U.S. labor management agreements specify
wages, hours, and working conditions. European agreements tend to be brief and
to leave individual employers free to institute more generous terms.
Terrorism, Safety, and Global HR
TERRORISM Whether it s off the coast of Somalia or walking down the street in
Brazil, businesspeople may be subject to express kidnapping , wherein they re kidnapped,
hopefully for just long enough to get a ransom payment from a bank or ATM. 105
Even stationing employees in assumedly safe countries is no guarantee there won t
be problems. A few years ago workers (certainly not terrorists) in French factories
of Sony Corp., Caterpillar Inc., and 3M Co. took their managers hostage in order to
foreign service premiums
Financial payments over and above regular
base pay, typically ranging between 10%
and 30% of base pay.
hardship allowances
Payments that compensate expatriates
for exceptionally hard living and working
conditions at certain locations.
mobility premiums
Typically, lump-sum payments to reward
employees for moving from one assignment
to another.