Answer to Question 1
Answer: Balancing global consistency in compensation with local considerations starts with establishing a rewards program that makes sense in terms of the employer's strategic aims. Then the employer turns to more micro issues, such as, is how we're paying our employees abroad competitive? Steps to follow in creating a global pay system include these:
Step 1. Set strategy. First, formulate longer-term strategic goals, for instance, in terms of improving productivity or boosting market share.
Step 2. Identify crucial executive behaviors. Next, list the actions you expect your executives to exhibit in order to achieve these strategic goals.
Step 3. Global philosophy framework. Next, step back and ask how you want each pay component (salary, bonus, incentives, and so forth) to contribute to prompting those executive actions.
Step 4. Identify gaps. Next, ask, To what extent do our pay plans around the world now support these actions, and what changes if any are required?
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.
Answer to Question 2
Answer: TRUE
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