Compensation Pay system full Slide

1. WELCOME TO THE
PRESENTATION
ON
INTERNATIONAL PAY SYSTEM

2. OUR TEAM MEMBERS ARE…
Name Of the Members Student ID
Sk.Md Ebrahim 2018110005035
Iqbal Hossain 2014110005024
Mohammad Habibur Rahman 2018110005032
Nadia Sultana 2018110005037

3. PRESENTED TO :
Md. Abu Bakar Siddique
Adjunct Faculty
School of Business Studies
Southeast University

4. INTRODUCTION
• Technology has greatly assisted the globalization of pay systems
although there are many differences that still require a broad
approach, says David Shon field. We live and work in a global
economy but what globalization actually involves is far less obvious,
especially for the management of pay and reward. Companies
operating in different cultures and economic environments used to
leave most things to be determined at local level.
• That has changed quite significantly over the past few years,
especially in the last 18 months. There is now a strong tendency
towards centralization and the harmonization of policies and practice
in large firms.

5. WHAT IS COMPENSATION PAY SYSTEM ?
• We live and work in a global economy but what globalization actually
involves is far less obvious, especially for the management of pay and
reward.
• Companies operating in different cultures and economic environments
used to leave most things to be determined at local level.
Managing Variations:
• How people get paid around the world depends on differences (and
similarities) in the following general factors
• Economic
• Institutional
• Organizational
• Employee

6. THE GLOBAL GUIDE

7. THE SOCIAL CONTRACT
• Employee Relations-
Government
Organizations
• Individual Employer
• Employer
Consortium
Individuals
•Unions
•Union
Federations
Organizations Individuals

9. CULTURE
Culture is defined as shared mental programming which is rooted in the
values, beliefs, and assumption in common by a group of people and which
influences how information is processed. The assumption pay system must
be designed to fit different national cultures is based on the belief that
most of inhabitants share a national character.
Characteristics of Culture:
Often defined as shared mental programming.
Involves acquiring knowledge that people use to
interpret experience and generate social behavior.
Rooted in values, beliefs, and assumptions shared in
common by a group of people.
Influences how information is processed.

10. TRADE UNIONS AND EMPLOYEE
INVOLVEMENT
• Europe remains highly unionized. Asia is less heavily unionized. In
some countries, workers pay is set by collective agreements even
through the workers may not be union members. In addition to
having higher rates of unionization, Belgium and Germany require
the establishment of worker councils that must be involved in any
changes to a pay plan.

11. TRADE UNIONS AND EMPLOYEE
INVOLVEMENT (CONTINUED)
UNION DENSITY:

12. OWNERSHIP AND FINANCIAL MARKETS
• Ownership and financing of companies differ widely around the
world. These differences are important to international pay.
• Types:
Stock Options
Government Owned
Bank Owned
Multilevel ownership

13.  Managerial Autonomy
• Level of Centralization
• Regulations
• Corporate Policy.
• Comparing Costs: Comparing costs can be very misleading even if
wage rates appear the same expenses for health care, living costs
and other employer provided allowances. Outside the U.S. many
nations offer some form of national health care organization may
pay for it indirectly.

14. CONTINUE…
• Include:
• Labor Costs and Productivity
• Standard of living costs
• Cost of Living and Purchasing Power
• Comparing Systems:
• We have made the points that pay systems differ
• around the globe and that the differences relate
• to various in economic pressures, sociopolitical
• institutions, and the diversity of organizations
• and employees. The caution about stereotyping
• raised earlier applied as well. Even in nations
• described by some as homogeneous, pay systems
• differ from business to business.

15. NATIONAL SYSTEMS : COMPARATIVE
MINDSET
• A national system mindset assumes that most employers in a
country adopt similar pay. Understanding and managing
international compensation then consists mainly of comparing
the Japan to the German to the U.S. or other national systems.
This method may be useful in nations with approaches. Some
even apply it to regional systems, as in the “European Way”, the
“Japanese way”, or the “North American Way”.

16. STRATEGIC MARKET MIND-SET
• Localizer: “Think Global, Act Local”
• Designs pay systems to be consistent with local conditions.
• Business strategy is to seek competitive advantage by providing products and
services tailored to local customers.
• Exporter: “One Size Fits All”
• Basic total pay system designed at headquarters and is “exported” world-wide for
implementation at all locations.
• Exporting a basic system makes it easier to move managers and professionals
among locations.
• One plan from headquarters gives all managers around the world a common
vocabulary and a clear message what the leadership values.

17. COMMON ALLOWANCES IN EXPATRIATE PAY

19. BORDERLESS WORLD - BORDERLESS PAY?
• Corporations attempting to become “globally integrated
enterprises,” are creating cadres of globalists:
• – Managers who operate anywhere in the world in a borderless
manner
• – To support a global flow of ideas and people, companies are
also designing borderless, or at least regionalized, pay systems
• –Testing ground for this approach - European Union

20. CHALLENGES IN INTERNATIONAL
COMPENSATION
• As the world is becoming a global village where entertainment
fashion and music spreads in weeks one can easily get miss
guided by choosing same compensation strategy for every
country but compensation is highly influenced by the national
culture, national patterns of compensation, legislation and
employment relationship context

21. RECOMMENDATION
• Flexible compensation tools will allow us to more accurately
meet resource needs.
• Formal compensation analyst personnel will provide more
efficient determination of market‐based compensation.
• A new system should be flexible enough to adjust as needs
change.
• Clear compensation policies properly applied could leverage
compensation as a tool to help encourage employee job
performance.

22. CONCLUSION
• Studying employee compensation only in your neighborhood, city,
or country is like being a horse with blinders. Removing the
blinders by adopting an international perspective deepens your
understanding of local issues. Anyone interested in compensation
must adopt a worldwide perspective. The globalization of
businesses, financial markets, trade agreements, and even labor
markets is affecting every workplace and every employment
relationship. And employee compensation, so central to the
workplace, is embedded in the different political-socio-economic
arrangements found around the world.

23. Thank You...