Challenges in International Benefits and Compensation Systems of Multinational Corporation
The African Economic and Business Review, Vol. 3, No. 1, Spring 2002
1
Challenges in International Benefits and Compensation Systems of Multinational Corporation
Semere Haile
Grambling State University
Abstract
The aim of this paper is to examine developments on the type and amount of compensation necessary to attract technically and culturally qualified international managers and technical professionals to the three nationals or country categories involved international human resource management activities from which employees are selected whether the people are PNCs, TCNs or HCNs. This paper will draw on research, which has been completed over the last ten years with the growth of international business and workforce. Since the principal problem of salary levels for the same jobs differ among the three primary labor pools nationals, this papers also examines and sees if any progress has been made toward restructuring compensation and reward systems among the three types of employees of an MNC who perform the same job in the same subsidiary. MNCs’ HR managers have a special role in ensuring that international compensation policies deal fairly among the three types of employee’s managers who perform the same job. Such fairness may maximize international employees’ performance. In particular, we are interested in how international compensation is practiced among the three types of labor pools of all managers regardless of nationality in an
MNC.
The African Economic and Business Review, Vol. 3, No. 1, Spring 2002
2
Introduction
A multinational corporation (MNC) is usually defined as a company with operations in more than one country (Porter, 1990). This means that an MNC has significant assets in terms of plants and/or offices in one or more foreign nations and derives some of its profits from these operations (French, 1998). The growth of the global economy has increasingly pushed MNCs into all corners of the world. The impact of
1
Challenges in International Benefits and Compensation Systems of Multinational Corporation
Semere Haile
Grambling State University
Abstract
The aim of this paper is to examine developments on the type and amount of compensation necessary to attract technically and culturally qualified international managers and technical professionals to the three nationals or country categories involved international human resource management activities from which employees are selected whether the people are PNCs, TCNs or HCNs. This paper will draw on research, which has been completed over the last ten years with the growth of international business and workforce. Since the principal problem of salary levels for the same jobs differ among the three primary labor pools nationals, this papers also examines and sees if any progress has been made toward restructuring compensation and reward systems among the three types of employees of an MNC who perform the same job in the same subsidiary. MNCs’ HR managers have a special role in ensuring that international compensation policies deal fairly among the three types of employee’s managers who perform the same job. Such fairness may maximize international employees’ performance. In particular, we are interested in how international compensation is practiced among the three types of labor pools of all managers regardless of nationality in an
MNC.
The African Economic and Business Review, Vol. 3, No. 1, Spring 2002
2
Introduction
A multinational corporation (MNC) is usually defined as a company with operations in more than one country (Porter, 1990). This means that an MNC has significant assets in terms of plants and/or offices in one or more foreign nations and derives some of its profits from these operations (French, 1998). The growth of the global economy has increasingly pushed MNCs into all corners of the world. The impact of
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