Taking Corporate Programs Global – Your Mileage May Vary!

Jacque Vilet – Vilet International

Companies these days are always striving for global consistency, and one of the ways to achieve it is to use the same corporate programs around the world.  But such an approach can sometimes present unexpected challenges.  I would like to share some of my experiences in this regard, to get you thinking about all the possible ramifications in rolling out corporate programs in multiple countries, and how each of those countries may be impacted.

Stock Plans in the Philippines

My company decided to offer our corporate Employee Stock Purchase Program (ESSP) to all employees worldwide.   The move was well received by the employees in the Philippines who had been upset that prior to this, only employees in the headquarters country could participate.

Employees could agree to have up to 10% of their pay deducted each payday and pooled in a special account.   Semi-annually, stock would be purchased on the open market at the fair market price.   Stock certificates would be given to employees based on the amount of money they had put into the program.  However, upon closer inspection, we became aware of some unexpected results.

For example, a production operator who made 130,000 pesos per year participating at the 10% level, would receive only 4 shares per year at a market price of $65 per share of stock.   Because of their low pay, many did not even participate at the 10% level.  Many only received 1 or 2 shares.  What corporate had perceived as a benefit, and employees had said they wanted, actually turned into a source of discontent among employees.  Employees did not fully understand what the program would net for them.   They only saw that employees in the headquarters country had a benefit  that they didn’t have.

In addition to employees perceiving no benefit, corporate headquarters ended up paying for administration for a program that failed.  This is a good example of not clearly thinking through the possible impact of taking a program global.

Incentives in Japan

The Japanese culture is very group-oriented, and  it is contrary the Japanese culture for an employee to be singled out for recognition or praise.   They believe that groups should receive recognition, not individuals.

The company that I worked for decided that all sales commission plans would be designed the same way worldwide.   All design features of the plan were exactly alike.   The commission payout was based on each individual’s achievement of his/her sales goal.  Suggestions were made by the Managing Director of Japan that paying commissions to individual salespeople was against the cultural norm.   Regardless, the plan stood as designed by corporate.

About two years later, I happened to be in Japan talking to the Managing Director.   I remembered that the Japanese salespeople had been unhappy about individual commission payouts and asked him whether the salespeople had adapted to the concept of individual sales commissions.   He thought a moment and then rather sheepishly told me that they had found their own way of dealing with the issue.   When the commissions were paid, all of the money was put into a pool and then divided equally and given to everyone in the office.   In some cases, employees find ways around corporate dictates.  I never told anyone back at corporate and secretly congratulated them for their ingenuity!    They technically abided by the plan and yet dealt with the actual payout in a way that did not violate their culture.

Does anyone have examples of corporate programs gone wrong when rolled out globally?   Please share them in the comments section below.  We all learn from the experience of others.

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