Author:
Mariana Villa da Costa – Littler Mendelson
On June 11, the world has seen the launch of one of the biggest sporting events – the World Cup, this year being hosted in South Africa. 
The World Cup is a passion to millions and millions of people around the world, and a much anticipated month-long series of games that unfortunately, for those who love futbol (soccer) like me, only happens once every 4 years.
Guest Author:
Jacqueline Vilet – TriNet
Editor’s Note: We are pleased to welcome Jacque Vilet as a guest author for the International HR Forum. Jacque is a Global HR/Benefits Consultant for TriNet, providing global Human Resources services to SME’s with international operations. She has over 20 years experience in International Human Resources with both local nationals and expatriates, and has been an expat twice during her career. Jacque holds the Certified Compensation Professional (CCP) designation from World at Work, and the GPHR (Global Professional in Human Resources) designation from the Society of Human Resources Management.
Everyone has heard the question “What keeps you up at night?” The answer usually depends on the context. If we ask C-level executives, the answer might cover such topics as market share, profit margins, stock price, ROI, etc.
Executives might also worry about their international operations – whether they picked the right people to run them, whether these managers are making inroads into the company’s potential customer base, hiring the right employees and remaining on target to meet business goals that are so important for expanding the company’s global market.
Posted in General, Global HR Expertise, International Employment Law
The Author in her tent
Guest Author:
Yolanda Adrian
Why would anyone volunteer to live in a tent and sleep on a cot? Well I did. I had the opportunity to work in Afghanistan for three months from November 2009 through January 2010. The company I work for is a defense contractor and we won a contract in Afghanistan; I volunteered to help with the phase-in of the program.
My assignment was to assist with the hiring of the incumbent workers employed by the current supplier as employees of my company. While this might seem like a simple task, there were many challenges – not knowing who the employees are, not being able to contact the employees at the work site during working hours, and the many different locations involved.
Posted in Cross Cultural Insights, General, Global HR Expertise
Tagged Developing Markets, emerging markets, Global HR
Author:
Chuck Csizmar – CMC Compensation Group
I once supervised a Compensation Analyst who had learned her craft through professional seminars and workshops. One result of that education was her favored response when faced with a challenge at work: “the greatest minds in Compensation say that . . . ” It took patience to educate this budding practitioner about the difference between classroom / textbook answers and workplace reality.
Authors:
Han van der Pool – TNT N.V.
Lex Lindeman – HRBoosters
A growing number of African Countries are now connected to high-speed internet connections, and with increasing competition in the global economy, organizations are forced to look for more efficient and effective ways to create, spread and to apply functional and managerial knowledge.
E-learning and knowledge management have become key words in organizational learning processes in the Africa as well. Many organizations invest in managing the knowledge within the organization and e-Learning, as a supporting tool, is used more and more.
Author:
Mariana Villa da Costa – Littler Mendelson
Hello Readers! Sorry about the radio silence, but I am back with another edition of our “International Employment Law Quick Facts”! Based on our readers requests, I have chosen India for the next in this series.
India is a place of exotic food, beautiful architecture and Bollywood! But, it’s also a developing country with the world’s second largest labor force and an economy that is taking over many others, and becoming one of the best places for global companies to invest. One important observation – Indian Labour and Employment Law is among one of the most complex in the world, so while I know the outline that follows is a good start, it is always a great idea to consult a lawyer.
Posted in Global HR Expertise, International Employment Law
Tagged Global HR, India, international hr, Labor Law, law
Author:
Warren Heaps – Birches Group LLC
Expats are expensive. With more and more focus on the cost of international assignments, companies are looking for ways to reduce expenses. The challenge is finding the most effective way to do it.
I believe one of the alternatives companies should consider is to simply reduce the number of expats! But this is easier said than done.
Localization is one approach which can be used to achieve this goal, but it’s hard to get it right. Let’s look at some approaches and pitfalls when considering localization.
Localization Approaches
One of the most common approaches to localization is to convert the expat to local terms and conditions, and provide a phase-down of expat allowances and benefits. For example, the expat would receive a salary according to the host country salary scale and participate in the host country benefits. During a transition period (usually one to three years), the employee also would get some expat benefits. This usually includes a transition allowance which provides the full net difference for a year, reducing in equal installments to zero after three years. In addition, companies often provide continued schooling assistance for several years.
Some of the challenges with this approach are in the areas of benefits, taxes, immigration, schooling and housing.
Saving on Expat Costs
Localization generates savings for the company when the cost of local salary and benefits is less than the expat package. When calculating the savings, don’t forget to consider the cost of transition benefits (including any tax gross-ups). You may find the savings to be elusive for the first few years.
Useful Tools
One excellent tool to help employers calculate localization costs is the Permanent Transfer Calculator from Airinc. This tool calculates the net differences for all of the key package elements and illustrates the level of transition benefits needed. It is a very useful tool which enables companies to make informed decisions when localizing staff.
Other Considerations
The most common localization options are usually applied in host locations such as the US and Western Europe. It is usually easier to localize staff in higher wage locations, and in developed countries. Some companies localize staff in lower-wage locatio ns in the developing world, but these cases can be very challenging and demotivating for staff. In addition, family assimilation can be much more difficult.
Companies sometimes localize staff only to re-expatriate them a few years later. This is generally a bad practice and causes a lot of confusion, especially for retirement benefits. Instead, look at your career and succession planning and evaluate the chances of another expat assignment in the future. It may be more practical to consider reduced allowances instead of full localization in these situations.
Finally, always consult with your legal counsel when changing terms and conditions for expats. In many countries, laws limit the ability to reduce compensation.
Summary
Localization can be a useful technique to save money and reduce expat costs. Careful analysis and planning is required to make it work, and attention to family transitions is essential for success.
Author:
George Bashaw – Atlas Global Benefits
It is time to unlock the power of hidden benefits. Each year when preparing to communicate new benefits changes, we tend to get bogged down in the delivery of rising medical costs and medical benefit changes. Understandably, medical hits the company’s bottom line and the employee’s wallet the hardest. This singular focus on medical benefits causes us to neglect the communication of other valuable benefits that may directly or indirectly save money for the company and your employees. Prior posts in this series include Enrollment and Billing Audit, Dependent Eligibility Audit, Know Your Claims and Duplication of Coverage.
Secret Five: Hidden Benefits
Hidden benefits are services and benefits that your employees may not fully understand or have no knowledge they exist. They could be stand alone plans or riders on policies. Either way, they have a purpose and can be very useful.
They key is identify your hidden benefits and communicate them properly. Here is a list of typical hidden benefits and some additional information about them:
The importance of an international EAP plan could merit several blog pieces on its own. The obvious benefits of EAP are credit, substance, marital, emotional counseling, and the list continues. Take anyone one of these common issues and multiply the stress of being a thousand miles from home and your support group and you have a serious problem. A problem that needs to be addressed by someone who can support the cultural issues, language barriers, and the exponential stress associated of being abroad. Not utilizing a good EAP plan can create loss of productivity and maybe the loss of your expat.
Some international medical plans come with EAP riders and other useful riders like medical evacuation and repatriation. You have to determine if the rider is adequate for your needs compared to a standalone plan. Either way, it is important employees understand their benefits and how they can utilize them.
Communication
Make sure you take the time to communicate all your benefits each year and not just the changes. Ensure that everyone has a summary of the plan in an easy to follow handbook that can be accessed via the internet. Additionally, you should issue new cards each year for wallets and purses.
My final recommendation on communication is bit outside the box but I have seen very positive results with my clients. I recommend you consider inviting spouses to the meetings or at least include them in the communication. In every home, you have a quarterback on issues like benefits and half the time it is the spouse. Effectively communication with the spouse may pay off in the long run.
Good luck unlocking the power of your hidden benefits. I would love to hear your thoughts on this issue.
More about George:
Posted in Benefits, Expatriates, Insurance, International Benefits
Tagged expatriate, Global HR, International Benefits
Author:
Chuck Csizmar – CMC Compensation Group
“What is the competitive market price for a particular position?”
It’s a simple question. If you work in Compensation, this is what you do. And if you’re in the US, the survey sources you can call upon are numerous and well-stocked with participating companies and benchmark matches – the blessings of a large country. In fact, it is a common practice to segment the data (report separately) on the basis of industry, revenue size, or geographic region. In some instances you can further refine your analysis by operating budget, staff size or even years of experience.
For those accustomed to such robust analysis it can be a real wake-up call when asked to conduct a similar analysis for operations in another country. Suddenly your content-rich environment has disappeared, and in its place you find that the availability of good information can no longer be taken for granted. Now what do you do?
Your large country database is gone. Instead, you face a limited selection of survey sources and each offers only a fraction of your normal participant count – a far cry from business as usual.
Such is the key challenge when pricing international jobs – the limited number of companies included in surveys, even by the major vendors. For example, Mercer Netherlands has 81 participating companies. So it is not unusual for a market pricing analysis to include only 4 – 5 “matches” – but is that representative of common practice?
If you’re the one on the asking end of the original question, let me share the challenges your analyst is likely to encounter.
Impact of Reduced Participation
What to do?
Frustrating, isn’t it? You can’t very well throw your hands into the air, complain about poor survey quality and move on to something else. The limitations are there and you have to play with the cards you’ve been dealt. Management is waiting, wondering what is taking you so long.
Working with limited resources is a test. Your challenge is to balance an understanding of the subject position, the industry and the vagaries of limited data points in order to determine which figure best represents your position’s competitive value.
To succeed you must utilize subjectivity and your professional judgment to consider the available data and gauge which figures best reflect the job under review. The correct answer will no longer jump off the page at you. Compensation has become an art, not a science.
All this subjectivity means that your judgment might suffer from more skepticism, even criticism, as you cannot simply point to a survey page and say, “there it is.”
Does all this subjectivity ruin the value of your analysis? Not at all, as long as you inform management about how limited survey resources have impacted your analysis. They expect an answer to their question (market value?) and you need do the best that you can with the resources you have available.
More About Chuck:
Author:
Warren Heaps – Birches Group LLC
I read an article today from the Wall Street Journal by Dr. Samuel Culbert of the Anderson School of Business at UCLA. In the article, the author states:
“This corporate sham [performance appraisal] is one of the most insidious, most damaging, and yet most ubiquitous of corporate activities. Everybody does it, and almost everyone who’s evaluated hates it. It’s a pretentious, bogus practice that produces absolutely nothing that any thinking executive should call a corporate plus.”
I recommend you read the rest of the article. You also might want to refer to this video interview with the author from 2008 – you can find it here.
It is true that most folks dislike the performance management rituals that exist in their organizations. For the most part, few managers are very good at providing meaningful feedback, and there is a “check the box” attitude from managers and staff alike. And the problem is with the whole concept — it’s not just a question of making a better form, or applying the latest Web 2.0 technology to automate a bad process. That just results in a very efficient, but no more effective, bad process.
I will leave it to Dr. Culbert to describe what else is wrong with performance appraisals. Instead, I would like to challenge you to think about a couple of concepts which could actually improve performance management for everyone.
At Birches Group, we did some research a few years ago for a client, which involved interviewing staff in every corner of the world about their company’s performance management system. We asked employees if they liked performance appraisals as they were conducted in the organization; they did not. Then we asked if they could identify the “good” and “bad” performers; without exception, they could. So we started investigating how it was possible they could figure out who was a strong performer and who was not, despite the formal performance management system they disliked so much.
The answer was incredibly simple. For the “good” performers, the answers to these questions were YES:
That’s it. Our research indicated that if we could answer these four questions we would have enough information to evaluate the performance of an individual in any organization.
Think about it. Apply it to your company. Does it work? Can you think of anyone in your company that can answer yes to all of these questions? Are they a good performer? Imagine the implications of such a simple approach.
We built a system, called Community™, which is based on this simple model. With just four questions to evaluate performance, we gather feedback from employee, manager and peers (inside or outside the company). The system is straightforward and requires no training (it has to be, since non-employee peers are invited to participate in the process, and there is no way they could be trained). And, surprise, it actually works!
Another key issue with performance management is how it is used in tandem with rewards – usually merit pay and short-term incentives. “Pay for Performance” is the rule now in most organizations, but stop and think about how performance really influences pay.
In most companies, salary ranges or bands are defined using a combination of external market data and internal equity issues. Once these bands are defined, the range of base salary is locked in. Performance management is then used to help determine the following:
Should all staff be treated equally when it comes to performance management? Certainly all employees should receive feedback on their performance from their supervisor. But should performance ratings be used for “pay for performance” across the board?
We sometimes think about this as a wedding cake. As you know, the base of a
wedding cake is tall and wide. Additional tiers of the cake are shorter and narrower, and as you go higher and higher up the cake the tiers get even smaller. We can draw an analogy between a wedding cake and broad organizational categories.
For example, the lowest tier might correspond to support staff, for whom rewards could easily be designed based primarily on basic metrics such as attendance, coupled with tenure-driven increases. Yes, a lot like civil service, but perhaps more appropriate for these positions.
The next level of the cake covers core professionals. For this group, the primary reward mechanism could be related not to attendance or tenure, but the demonstration of new competencies related to their job requirements. This group would benefit from clearly defined competency milestones and peer feedback, for example.
The next level (or two) would be reserved for managers and executives – the folks who are managing the business operationally and strategically. For this group of staff, some pay should be at risk, and rewards should be based on how well the company does in meeting it’s overall performance objectives. Primarily financial objectives, but also consideration of leadership strengths and other key decisions made by the management team need to be considered. Clearly, though, it is these groups that have the most direct influence over company results. In other words, perhaps when it comes to pay for performance, one size does not fit all.
All employees deserve regular, constructive feedback about their performance. This is not a function of the system you use or the form design; rather, it needs to be embedded into the culture of your organization, to encourage frank conversation, open and honest exchanges between managers and staff, with the aim to celebrate the good (as opposed to focusing exclusively on the best). Rethinking how performance ratings are used to administer pay and rewards is long overdue in most organizations.
What do you think? Please share your comments and thoughts!
More About Warren
Developing Markets Compensation and Benefits Group on LinkedIn
